RPLF

FUND PURPOSE

NCALL began lending close to two decades ago. This resource offers financial products not available by either private or public sector lenders to NCALL's customer base of non-profit organizations. NCALL's mission, as approved by the Board in 2003, is to "provide opportunities for safe, decent, affordable housing and to improve housing conditions of low and moderate income people primarily in the rural areas" by "providing training, technical assistance, and support, including financial, to organizations to enhance their capacity." It is through this element that NCALL and its Loan Fund continue to provide lending assistance to the smaller rural-based organizations.

NCALL has been lending since 1983, albeit very small loans for nonprofit development organizations and rural home purchasers. In the twenty years of lending it has originated 63 loans with total volume of $1,115,217. All of its loans have gone to create or preserve affordable rental or home ownership units in rural areas of Delaware and the Eastern Shores of Maryland and Virginia. In total, the organization financed the creation of 745 affordable homes.

NCALL's current products include predevelopment and working capital loans, site development and acquisition construction loans, gap and bridge financing on multifamily projects, loans for community facilities and loan guarantees. Each product was developed through decades of constant interaction - as technical assistance agent, advocate and more recently lender – with the borrowers. Each of these products fills a clear financing need and is not readily available from other sources. They also help to develop or preserve housing for low- and very low-income households. Finally, NCALL is also committed to linking improved financial condition of the organization with each loan.

The Loan Fund has been operated successfully by Joe Myer, NCALL's Executive Director for 25 years for predevelopment purposes. NCALL recently hired Karen Kollias, an experienced community development and affordable housing lender, as Loan Fund and Asset Management Coordinator. Karen has worked with NCALL's customer base and Loan Committee to define new loan products, create consistent underwriting standards, develop loan policies and create appropriate reporting methods, with the oversight of the Loan Fund Committee, so that the organization can be equipped to attract additional sources of capital. She has been helped by receipt of a CDFI Fund TA award and CDFI and CDE certification in 2004.

LOAN PRODUCTS

The NCALL Loan Fund is interested in filling the financial gaps for its nonprofit, affordable housing customers. The Loan Fund has developed a specific set of loan products to fill those gaps. It is also open to structuring loans outside of its current set of products to be responsive to creative projects or changing market conditions. Overall, the Loan Fund is a short-term lender, keeping its loans within tenures no greater than five years, although there could be exceptions.

NCALL's current products are predevelopment and working capital loans, site development and acquisition loans, gap and bridge financing on multifamily projects, loan guarantees and community-based facility loans. Each product was developed through decades of constant interaction – as technical assistance agent, advocate and more recently lender – with the borrowers. Each of these products fills a clear financing need that is not readily available from other sources. Each product helps to develop or preserve housing for low- and very low-income households.

Working Capital and Predevelopment loans provide the initial, high-risk, unsecured capital that permits a nonprofit to bring a project to the stage where other financing and funding sources can make a decision. If the organization does not have $50,000 to $100,000 needed for engineering and environmental studies, architectural drawings, legal opinions and so forth the project will languish. NCALL has been in the lending business for over 20 years. For most of its history, the primary loan product has been for predevelopment. This activity is rarely funded by traditional sources given its risks: it is difficult to secure with collateral and the likelihood of repayment is completely dependent on the success of a project. NCALL understands the development process and nonprofit capacities in its market, which have led to a very high success rate with these loans. This product has been expanded to include funding non-project organizational working capital and revolving lines of credit.

Amount: $50,000 to $400,000
Terms: Maximum 3 years
Rate: 5-7% (based on market and market acceptance)
Collateral: Where possible, an assignment of land or other assets; assignment of repayment sources (i.e. draws, contract reimbursements; fees)
LTV: Not applicable
DSCR: Not applicable

Community-Based Facility Loans allows customers to develop office buildings, health care facilities, community centers, and other non-housing projects. Many of NCALL's clients have successfully developed numerous housing projects and look to use their hard-earned development expertise to respond to community needs. This loan product is designed to work either as the initial source of first position bridge financing, to be repaid upon acquisition of other capital once the finished facility is sufficiently seasoned, or as a subordinate gap financing that funds the portion of the project not picked up by conventional or other sources, and repaid through project cash flow or refinancing.

Amount: $50,000 to $500,000 (subject to policies);
Term: Up to 5 years, option to renew for one year based on project performance and financial condition of borrower
Rate: 4 – 7%, interest only for the first year
Collateral: First lien on project or land being financed, if available, possibly additional
LTV: Maximum 90%
DSCR: Determined on a project by project basis

Loan guarantees allow nonprofits to have access to conventional lenders that otherwise would not finance the borrowers and projects within NCALL's niche. The guarantees give nonprofit borrowers exposure to the underwriting, documentation and performance requirements of conventional lenders, who themselves gain a better understanding of the commitment and capacity of nonprofit borrowers. Guarantees are appropriate when there is not adequate collateral for the transaction and the sources of repayment may be uncertain or risky.

Amount: $50,000-$200,000
Term: 3 years with release provisions where appropriate, with option for renewals based on performance (and reductions)
Rate: 5%-7%, if pulled
Collateral Assignment of property or other assets

Gap and bridge financing on multifamily projects permits nonprofits to preserve and create low-income rental housing, a task becoming more and more difficult. Recently the funding gaps are increasing which makes projects either not feasible, or the predevelopment stage takes even longer. This term loan will provide the non-profit "equity like" support, but it will be structured as a cash flow mortgage. Since this product will look different for different projects, it is important to have the ability to look for cash (after primary debt service) and to have a lien position (subordinate) in the project.

Amount: $25,000 to $500,000
Term: 5 years
Rate: 4% - 8%
Collateral: Assignments of fees or accounts receivable, guarantee, subordination on the real estate where possible

Site Development and Acquisition loans allow customers to respond to land and building purchases quickly. Given the market conditions in NCALL's target areas, it is difficult to tie up properties with options. Developers are regularly signing contracts at or above the asking rate. They do not request financing contingencies. The Loan Fund's acquisition and construction loan allows the non-profits to compete for the land. Underwriting for acquisition has a set of risk factors associated with it because borrowers may tie up properties before the complete financial packaging is done. Therefore, the Loan Fund considers this risk factor (for repayment) as a part of the Loan request's underwriting. Review of the borrower's financial condition is especially important with the acquisition (land banking) requests, with examples mentioned below:

Amount: $50,000 to $250,000 (subject to policies);
Term: 6 months to 2 years, option to renew for one year based on project performance and financial condition of borrower
Rate: 3 – 7%, interest only for the first year
Collateral: First lien on project or land being financed, possibly additional
LTV: Maximum 90%
DSCR: Determined on a project by project basis

The underwriting template used by staff and the risk rating assessment have been approved by the NCALL Loan Committee. The basic underwriting categories include:

Organizational capacity – technical and financial
Market impact
Project or programmatic feasibility
Community development impact

Recently the Loan Fund:

Received additional capital, including support from NeighborWorks America (formerly Neighborhood Reinvestment Corporation).
Was awarded a technical assistance and planning grant from the CDFI Fund and NCALL achieved its CDFI certification at the same time;
Became a member of National Community Capital Association (NCCA), Rural NeighborWorks Alliance (RNA) and National Association of Affordable Housing Lenders (NAAHL).
Continued to strengthen the infrastructure of the Loan Fund including the development of a capitalization strategy.
Was certified as a Community Development Entity (CDE) by CDFI Fund.
Established a strong Loan Fund Committee with full service experience.




	FUND PURPOSE NCALL began lending close to two decades ago. This resource offers financial products not available by either private or public sector lenders to NCALL's customer base of non-profit organizations. NCALL's mission, as approved by the Board in 2003, is to "provide opportunities for safe, decent, affordable housing and to improve housing conditions of low and moderate income people primarily in the rural areas" by "providing training, technical assistance, and support, including financial, to organizations to enhance their capacity." It is through this element that NCALL and its Loan Fund continue to provide lending assistance to the smaller rural-based organizations. NCALL has been lending since 1983, albeit very small loans for nonprofit development organizations and rural home purchasers. In the twenty years of lending it has originated 63 loans with total volume of $1,115,217. All of its loans have gone to create or preserve affordable rental or home ownership units in rural areas of Delaware and the Eastern Shores of Maryland and Virginia. In total, the organization financed the creation of 745 affordable homes. NCALL's current products include predevelopment and working capital loans, site development and acquisition construction loans, gap and bridge financing on multifamily projects, loans for community facilities and loan guarantees. Each product was developed through decades of constant interaction - as technical assistance agent, advocate and more recently lender – with the borrowers. Each of these products fills a clear financing need and is not readily available from other sources. They also help to develop or preserve housing for low- and very low-income households. Finally, NCALL is also committed to linking improved financial condition of the organization with each loan. The Loan Fund has been operated successfully by Joe Myer, NCALL's Executive Director for 25 years for predevelopment purposes. NCALL recently hired Karen Kollias, an experienced community development and affordable housing lender, as Loan Fund and Asset Management Coordinator. Karen has worked with NCALL's customer base and Loan Committee to define new loan products, create consistent underwriting standards, develop loan policies and create appropriate reporting methods, with the oversight of the Loan Fund Committee, so that the organization can be equipped to attract additional sources of capital. She has been helped by receipt of a CDFI Fund TA award and CDFI and CDE certification in 2004. LOAN PRODUCTS The NCALL Loan Fund is interested in filling the financial gaps for its nonprofit, affordable housing customers. The Loan Fund has developed a specific set of loan products to fill those gaps. It is also open to structuring loans outside of its current set of products to be responsive to creative projects or changing market conditions. Overall, the Loan Fund is a short-term lender, keeping its loans within tenures no greater than five years, although there could be exceptions. NCALL's current products are predevelopment and working capital loans, site development and acquisition loans, gap and bridge financing on multifamily projects, loan guarantees and community-based facility loans. Each product was developed through decades of constant interaction – as technical assistance agent, advocate and more recently lender – with the borrowers. Each of these products fills a clear financing need that is not readily available from other sources. Each product helps to develop or preserve housing for low- and very low-income households. Working Capital and Predevelopment loans provide the initial, high-risk, unsecured capital that permits a nonprofit to bring a project to the stage where other financing and funding sources can make a decision. If the organization does not have $50,000 to $100,000 needed for engineering and environmental studies, architectural drawings, legal opinions and so forth the project will languish. NCALL has been in the lending business for over 20 years. For most of its history, the primary loan product has been for predevelopment. This activity is rarely funded by traditional sources given its risks: it is difficult to secure with collateral and the likelihood of repayment is completely dependent on the success of a project. NCALL understands the development process and nonprofit capacities in its market, which have led to a very high success rate with these loans. This product has been expanded to include funding non-project organizational working capital and revolving lines of credit. Amount: $50,000 to $400,000 Terms: Maximum 3 years Rate: 5-7% (based on market and market acceptance) Collateral: Where possible, an assignment of land or other assets; assignment of repayment sources (i.e. draws, contract reimbursements; fees) LTV: Not applicable DSCR: Not applicable Community-Based Facility Loans allows customers to develop office buildings, health care facilities, community centers, and other non-housing projects. Many of NCALL's clients have successfully developed numerous housing projects and look to use their hard-earned development expertise to respond to community needs. This loan product is designed to work either as the initial source of first position bridge financing, to be repaid upon acquisition of other capital once the finished facility is sufficiently seasoned, or as a subordinate gap financing that funds the portion of the project not picked up by conventional or other sources, and repaid through project cash flow or refinancing. Amount: $50,000 to $500,000 (subject to policies); Term: Up to 5 years, option to renew for one year based on project performance and financial condition of borrower Rate: 4 – 7%, interest only for the first year Collateral: First lien on project or land being financed, if available, possibly additional LTV: Maximum 90% DSCR: Determined on a project by project basis Loan guarantees allow nonprofits to have access to conventional lenders that otherwise would not finance the borrowers and projects within NCALL's niche. The guarantees give nonprofit borrowers exposure to the underwriting, documentation and performance requirements of conventional lenders, who themselves gain a better understanding of the commitment and capacity of nonprofit borrowers. Guarantees are appropriate when there is not adequate collateral for the transaction and the sources of repayment may be uncertain or risky. Amount: $50,000-$200,000 Term: 3 years with release provisions where appropriate, with option for renewals based on performance (and reductions) Rate: 5%-7%, if pulled Collateral Assignment of property or other assets Gap and bridge financing on multifamily projects permits nonprofits to preserve and create low-income rental housing, a task becoming more and more difficult. Recently the funding gaps are increasing which makes projects either not feasible, or the predevelopment stage takes even longer. This term loan will provide the non-profit "equity like" support, but it will be structured as a cash flow mortgage. Since this product will look different for different projects, it is important to have the ability to look for cash (after primary debt service) and to have a lien position (subordinate) in the project. Amount: $25,000 to $500,000 Term: 5 years Rate: 4% - 8% Collateral: Assignments of fees or accounts receivable, guarantee, subordination on the real estate where possible Site Development and Acquisition loans allow customers to respond to land and building purchases quickly. Given the market conditions in NCALL's target areas, it is difficult to tie up properties with options. Developers are regularly signing contracts at or above the asking rate. They do not request financing contingencies. The Loan Fund's acquisition and construction loan allows the non-profits to compete for the land. Underwriting for acquisition has a set of risk factors associated with it because borrowers may tie up properties before the complete financial packaging is done. Therefore, the Loan Fund considers this risk factor (for repayment) as a part of the Loan request's underwriting. Review of the borrower's financial condition is especially important with the acquisition (land banking) requests, with examples mentioned below: Amount: $50,000 to $250,000 (subject to policies); Term: 6 months to 2 years, option to renew for one year based on project performance and financial condition of borrower Rate: 3 – 7%, interest only for the first year Collateral: First lien on project or land being financed, possibly additional LTV: Maximum 90% DSCR: Determined on a project by project basis The underwriting template used by staff and the risk rating assessment have been approved by the NCALL Loan Committee. The basic underwriting categories include: Organizational capacity – technical and financial Market impact Project or programmatic feasibility Community development impact Recently the Loan Fund: Received additional capital, including support from NeighborWorks America (formerly Neighborhood Reinvestment Corporation). Was awarded a technical assistance and planning grant from the CDFI Fund and NCALL achieved its CDFI certification at the same time; Became a member of National Community Capital Association (NCCA), Rural NeighborWorks Alliance (RNA) and National Association of Affordable Housing Lenders (NAAHL). Continued to strengthen the infrastructure of the Loan Fund including the development of a capitalization strategy. Was certified as a Community Development Entity (CDE) by CDFI Fund. Established a strong Loan Fund Committee with full service experience.

		Copyright ©2005 NCALL Research, Inc.