Boston Community Capital Foreclosure Relief Initiative Awarded $100 Million in Federally Guaranteed Bond Funding
Treasury-Guaranteed Funding Provides Long-Term Fixed-Rate Capital to Help Homeowners Facing Foreclosure
First-of-its-Kind Program-Related Investment (PRI) Guarantee by Kresge Foundation Offers Model for Public-Private Impact Investment
BOSTON, MA—The Community Reinvestment Fund, USA, (CRF) has issued $100 million in federally guaranteed bond funding to Aura Mortgage Advisors, an affiliate of nonprofit Boston Community Capital (BCC), through the U.S. Department of the Treasury’s CDFI Bond Guarantee Program (BGP). As a financing tool that supports investment in distressed communities, the bond will be used to finance mortgage loans through Aura Mortgage Advisors’ SUN Initiative, which is an award-winning mortgage buyback program that helps families and individuals facing foreclosure remain in their homes with new mortgages they can afford.
“The housing foreclosure crisis disproportionately impacted low-income communities and communities of color, and many of these communities have yet to recover,” said Elyse D. Cherry, CEO of Boston Community Capital. “We are grateful to CDFI Fund Director Annie Donovan and Bond Guarantee Program Manager Lisa M. Jones and their team for their pioneering work and unwavering commitment to making the Bond Guarantee Program’s long-term, low cost capital accessible to provide these communities with lasting relief.”
For the first time in the CDFI Bond Guarantee Program’s history, a national foundation provided a guarantee in support of an Eligible CDFI’s Bond Loan application, demonstrating strong collaboration between the public and private sector. The Kresge Foundation’s limited payment guarantee to Aura Mortgage Advisors showcases how CDFIs and foundations can leverage social investments to extend their impact through the CDFI Bond Guarantee Program.
“Solving complex social programs, like the impact of foreclosure on communities, requires innovation and collaboration between public, private and community partners,” said Joe Evans, portfolio manager at The Kresge Foundation. “Our impact investment in Aura allows us to use the foundation’s non-grant resources – a guarantee, in this case – to support sustainable social outcomes that are core to expanding opportunity for low-income people.”
The Kresge Foundation has a $350 million commitment to social investing through 2020, including $150 million in guarantees.
Aura Mortgage Advisors will use the $100 million in bond proceeds to expand its SUN Initiative, which helps families and individuals facing foreclosure repurchase their homes with mortgages they can afford. To date, the program has helped stabilize nearly 900 households in Massachusetts, Rhode Island, New Jersey, Maryland and Illinois, reducing their average monthly mortgage payments and mortgage principal balance by 35%. Bond funds will support mortgage lending in these states, as well as expansion to Connecticut and Pennsylvania.
“CRF’s goal is to support mission-driven organizations to transform the flow of capital to communities and individuals across the country,” said Frank Altman, CRF’s President and Chief Executive Officer. “We are privileged to work with Boston Community Capital to help Aura Mortgage Advisors bring the benefits of the CDFI Bond Guarantee Program’s long-term, fixed-rate capital to homeowners and tenants facing foreclosure-related eviction.”
Enacted as part of the Small Business Jobs Act, the CDFI Bond Guarantee Program (BGP) is an innovative federal credit program designed to function at zero cost to taxpayers. It provides eligible CDFIs access to long-term capital to encourage economic growth and development. Since the inception of the CDFI Bond Guarantee Program, Treasury has guaranteed bonds for $1.36 million dollars for investment in the nation’s most underserved rural and urban areas.
About the Organizations
Boston Community Capital and Aura Mortgage Advisors: Boston Community Capital (BCC) is a non-profit community development financial institution (CDFI) dedicated to building healthy communities where low-income people live and work. Since 1985, BCC has invested close to $1.4 billion in projects that provide affordable housing, good jobs, and new opportunities in low-income communities, connecting these neighborhoods to the mainstream economy; its investments have leveraged over $7 billion in public and private investment in underserved communities nationwide. For more information about Boston Community Capital, visit www.bostoncommunitycapital.org.
Aura Mortgage Advisors, LLC (Aura) is licensed as a Mortgage Lender (NMLS #23467) dedicated to helping people understand the mortgage process and own a home they can afford. Aura is a certified community development financial institution (CDFI) and an affiliate of Boston Community Capital (BCC). For more information about Aura Mortgage Advisors and the SUN Initiative, visit http://bostoncommunitycapital.org/programs-services/sun-initiative or www.sunhomehelp.org.
Kresge Foundation: The Kresge Foundation is a $3.5 billion private, national foundation that works to expand opportunities in America’s cities through grantmaking and social investing in arts and culture, education, environment, health, human services, and community development in Detroit. In 2016, the Board of Trustees approved 474 grants totaling $141.5 million, and made 14 social investment commitments totaling $50.8 million. For more information, visit www.kresge.org.
Community Reinvestment Fund, USA (CRF): Founded in 1988, Community Reinvestment Fund, USA (CRF) is a national non-profit organization with a mission to empower people to improve their lives and strengthen their communities through innovative financial solutions. A leading Community Development Financial Institution (CDFI), CRF develops products and services aimed at increasing the flow of capital to historically underinvested communities across the country. CRF has injected more than $2.2 billion to help stimulate job creation and economic development, provide affordable housing, and support community facilities. For more information, visit www.crfusa.com.
CDFI Fund: Since its creation in 1994, the CDFI Fund has awarded more than $2.3 billion to CDFIs, community development organizations, and financial institutions through the Community Development Financial Institutions Program, the Native American CDFI Assistance Program, and the BEA Program. In addition, the CDFI Fund has allocated $50.5 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, guaranteed $1.36 billion in bonds through the CDFI Bond Guarantee Program, and awarded more than $171 million through the Capital Magnet Fund. To learn more about the CDFI Fund and its programs, please visit the CDFI Fund’s website at www.cdfifund.gov.