The Community Development Financial Institutions (CDFI) Fund has awarded $91.5 million in Capital Magnet Fund grants to 32 organizations for the development of affordable housing and other community service facilities, such as day-care centers and health-care clinics, in low-income neighborhoods.
Of the 32 organizations receiving fiscal year 2016 awards, 23 are CDFIs and nine are nonprofit housing organizations. They were selected out of 125 organizations requesting more than $609 million.
Each awardee must use at least 70% of the grant to finance affordable housing, and they may use up to 30% of the money to finance related economic development.
According to the CDFI Fund, awardees plan to develop 17,000 affordable housing units comprised of more than 15,000 rental units and nearly 2,000 homeownership units. The majority of housing units, 93%, will be developed for low-income households earning 80% or less of the area median income (AMI). Half of the rental units will be developed for very low-income and extremely low-income persons earning less than 50% of the AMI. The awardees will serve 37 states and the District of Columbia.
“The impact of this program will be tremendous. The program requires recipients to leverage $10 of housing and economic development investments for every $1 of federal funds, meaning today’s awards will support over $900 million of investment in low-income communities,” said Annie Donovan, director of the CDFI Fund, in a statement.
Capital Magnet Fund recipients include nonprofit developers Foundation Communities, Homes for America, Housing Vermont, Preservation of Affordable Housing, and Volunteers of America as well as CDFIs Local Initiatives Support Corp., Low Income Investment Fund, and Mercy Loan Fund. For a full list of award recipients, visit https://www.cdfifund.gov/Documents/FINAL%202016%20CMF%20Award%20Book%20091916.pdf.
This is the second funding round for the Capital Magnet Fund and the first with funding from Fannie Mae and Freddie Mac. The first round was held in fiscal year 2010 and awarded $80 million appropriated by Congress to 23 CDFIs and nonprofits. In that round, almost 10,000 affordable homes were created and 15 economic development projects were supported.