Jim Peffley, CEO of NeighborWorks Capital, Liz Hibbard and Matt Reilein from NEF at the NeighborWorks Executive Symposium.
They go by many different names, working in disadvantaged neighborhoods large and small, from Fairbanks, Alaska, to Brunswick, Maine, and Spencer, Iowa, to San Juan, Puerto Rico.
They work without fanfare, often with the cards stacked against them. Yet, despite the hurdles, these 247 nonprofit affordable housing organizations have over 8,000 units in production for 2024, dwarfing the biggest names in affordable housing development.
And their shared belief? You might describe it in four words: We are stronger together.
A Level Field
Meet the NeighborWorks network, the quiet giant of U.S. affordable housing. Just weeks ago, this community of high-performing nonprofits received news that promises to “… level the playing field with a new multi-investor LIHTC [low-income housing tax credit] fund,” according to James Peffley, CEO of NeighborWorks Capital, a community development loan fund serving NeighborWorks network affiliates nationwide.
The affordable housing veteran says the fund is a welcome disruption for the industry.
“A small nonprofit might do one tax credit development every other year,” Peffley explains. “They don’t have the leverage, market knowledge, or experience of large developers who know what to push for with syndicators. As a result, they often don’t get the same terms big players get.”
NeighborWorks Capital Equity Fund
The new fund, called the NeighborWorks Capital Equity Fund, represents a financing tool NeighborWorks affiliates can use to help advance deals faster with less cost. “It’s long overdue,” Peffley observes.
"This is incredible news for NeighborWorks network organizations that are often the unsung heroes of affordable housing and community development," says Marietta Rodriguez, president and CEO of NeighborWorks America.
Many in the affordable housing community may have worked with one or more NeighborWorks America affiliates, perhaps not realizing what the network means to thousands of families each year. The unmatched scale and mission-focus is expected to attract wide investor interest, especially from financial institutions seeking high impact ways to meet Community Reinvestment Act (CRA) compliance requirements.
Liz Hibbard sees the NeighborWorks Capital Equity Fund as a win-win for all affordable housing stakeholders.
Unique Perspective
Hibbard directs innovation and strategic growth for nonprofit LIHTC syndicator, National Equity Fund (NEF). Hibbard and the NEF team worked with NeighborWorks Capital to create the fund, both groups recognizing much more needs to be done to address affordable housing preservation and creation.
“We need innovative, creative ways to solve long-standing imbalances,” Hibbard says. “The NeighborWorks Capital Equity Fund is a tool community-based nonprofit network developers can use to help strengthen their community, taking advantage of their local insight and perspective.”
AHIC’s Expanded DEI Underwriting Guidelines
Hibbard cites the Affordable Housing Investors Council’s (AHIC’s) thoughtful and recent DEI (diversity, equity and inclusion) underwriting analysis and guidelines as being a catalyst for the fund. “AHIC acknowledges the need to think creativity in order to drive impact by reaching more communities and developers through a DEI lens. This is a great opportunity for investors to create a more equitable playing field for all.”
Peffley agrees and hopes the collaboration inspires others to think along similar lines. “I hope this makes others think about what they can do to push the envelope,” the CEO says.
For NEF and NeighborWorks Capital, this is just the beginning. “We see this fund as the first in a series,” Peffley says. “Each time we’ll build on what came before with new ideas. We want to show investors and syndicators what’s possible to help more people live in safe, clean affordable homes.”
Learn more about how NEF supports affordable housing preservation and creation through trusted, innovative solutions.
