Community Economic Development: An Overview

Transcription

1 Community Economic Development: An Overview Office of Community Services Administration for Children & Families U.S. Department of Health & Human Services FOA HHS-2017-ACF-OCS-EE-1213 Rafael J. Elizalde, MPA Program Manager Division of Community Discretionary and Demonstration Programs Office of Community Services

2 Support projects that build/expand local enterprises, create career opportunities, facilitate economic growth in communities that need it most Mission & Objectives Strengthen families and communities by creating jobs that employ local individuals with low income and grow local revenue Allow communities to drive the type of investment and/or business to that which is most needed in the community Provide reliable financing that enables conventional lenders to have confidence to invest in projects in communities that have historically been avoided

3 How Does CED Achieve its Goals? Grants to private, non-profit CDCs to create or expand businesses, resulting in creation of new jobs CED funds can be used for: Hard or soft costs of a commercial development Equity investments or loans Capital for a new business or business expansion Allowable operating expenses All projects must create new, full-time permanent jobs for individuals with low income 3 Madison Park Development Corporation Roxbury, MA

4 Eligible Organizations Private, non-profit organization with principal purpose: Planning, developing, or managing low-income housing OR Community development activities Tri-Partite Board of Directors with representation from: Community Residents Business Civic Leaders Hacienda Community Development Corporation Portland, OR 4

5 Target Population Projects must create employment for individuals with low income Income does not exceed 125% Federal poverty level Target populations: TANF recipients Non-custodial parents Residents of public housing Formerly incarcerated individuals Homeless Other low-income individuals Personal and community barriers 5

6 Types of CED Projects Commercial Kitchens Shopping Centers & Grocery Stores Business Incubators/Social Enterprises Farmers Markets & Agricultural Initiatives More at: 6

7 Examples of CED & CDFI Collaboration Fresno CDFI Revolving Loan Fund The Fresno CDFI, d.b.a Access Plus Capital, has partnered with CED grantees on multiple projects to help grow its revolving loan fund and create more jobs for people with low incomes in Fresno, California. Fresno CDFI s full-time technical assistance staff work with businesses before and after loans are made and offer businesses a 16-week training course that focuses on budgeting, business financials, credit building, and lending principles. 7

8 Examples of CED & CDFI Collaboration EPDC Save-A-Lot Grocery Store Emerson Park Development Corporation (EPDC) partnered with the CDFI Illinois Facilities Fund, along with the Bonner Company, to create the Save-A-Lot Grocery store in East St. Louis, Illinois to provide local residents with healthy fresh fruits and vegetables, produce, fresh meat, poultry and other groceries. 8

9 CED Funding Announcement Grants awarded to applications received in response to two separate CED Funding Opportunity Announcements (FOAs): CED - for project that develop new products, services, and other commercial activities. CED Focus on Social Enterprises - for projects that will support social enterprises. New for FY 2019 FOA provides instructions for applicants on how to apply for a grant and what should be included in application Applications reviewed by panels comprised of outside experts in the community economic development field and by federal program staff Awards made by September 30,

10 CED Funding Summary for FY19 Support businesses that develop new products, services, and other commercial activities that result in the creation of new positions for individuals with low income Estimated Funding Available: $13,100,000 Expected Number of Awards: 17 Award Ceiling: $800,000 Award Floor: $100,000 Martin Luther King Economic Development Corporation Milwaukee, Wisconsin 10

11 CED Focus on Social Enterprise Funding Summary for FY19 Support projects sponsoring Social Enterprise incubators, which will develop new products, services, and commercial activities that result in new positions for individuals with low incomes, while also addressing a local unmet needs or solutions to social problems and barriers for the community. Expected Number of Awards: six (6) Five year project period with annual budgets: 1st through 3rd year - $400,000 per year 4th through 5th year - $250,000 per year Total five year funding of $1,700,000 Note, these annual budgets assume Congressional Appropriations continue through each of the five years. The Works Memphis, TN 11

12 All CED Projects Must Be ready to implemented at the time of award (Oct 1 st ) Lead to increased self-sufficiency for individuals with low incomes and their families Create businesses and jobs in low-income communities Attract additional public and private funds to increase investment 12

13 Resources Helpful Websites: ACF Website: OCS Website: CED Website: Funding Announcements: Questions: 13

14 Wrap-Up Jobs lead to increased self-sufficiency for individuals with low income and their families. Creating businesses and jobs in low-income communities improves the livelihood of those who obtain those jobs and the community itself. CDCs know their communities and are poised to efficiently and effectively create new community economic development projects in their communities CED funding attracts additional public and private funds to increase investment and quality of life in low-income communities In FY19, OCS will release two separate FOAs 14

15 Health Center Facility Loan Guarantee Program Update CDFI Coalition Institute March 13, 2019 Joe Fitzmaurice, Senior Advisor Office of Policy and Program Development/SIPD Bureau of Primary Health Care (BPHC) Health Resources and Services Administration (HRSA)

16 Health Center Program Background Federal support began in 1965 Authorized in 1975 under Section 330 of the Public Health Service Act (42 U.S.C. 254b) Contains separate legislative authority for: Community Health Center Program Migrant Health Center Program Health Care for the Homeless Program Public Housing Primary Care Program 16

17 Health Center Program Fundamentals Health centers Deliver high quality, culturally competent, comprehensive primary care and supportive services Provide services regardless of patients ability to pay Patient-majority governing boards of autonomous community-based organizations Respond to the unique and individual needs of the community Meet requirements regarding administrative, clinical, and financial operations 17

18 Health Center Program Fast Facts Nearly 1,400 health centers operate approximately 12,000 service delivery sites More than 27 million patients Health centers provide patient-centered, comprehensive, integrated care by offering a range of services: Primary medical, oral, and mental health services Substance use disorder and medication-assisted treatment (MAT) services Enabling services such as case management, health education, and transportation Source: Uniform Data System,

19 Health Center Program Highlights Source: Uniform Data System,

20 Health Center Loan Guarantee Program History Health Center LGP initiated through 1997 and 1998 appropriations. Provides guarantees for loans supporting facility financing for the construction, renovation and modernization of health center facilities. Has been used in conjunction with CDFI/CDE/New Markets Tax Credit financing. Through 2018: 25 facility loan guarantees, $136 million in lending authority. LGP analysis improve efficiency and increase utilization Congressional direction Discussion with LGP partners, Lenders Coalition Consult: USDA/Rural Development/Community Facilities Programs 7

21 Health Center Loan Guarantee Program Update 2018 Congressional action: Increased LGP lending authority to almost $900 million. Continue to implement LGP and consult with partners. Program revision ongoing Application and review process Documentation Loan closing process Guarantee Targeted roll out in FY

22 Health Center Loan Guarantee Program Resources Health Center Program Webpage LGP Webpage LGP Team Contacts: Vesnier Lugo Sadeeka Scott 22

23 Thank You! Joe Fitzmaurice Senior Advisor Strategic Initiatives and Planning Division Office of Policy and Program Development Bureau of Primary Health Care (BPHC) Health Resources and Services Administration (HRSA) Sign up for the Primary Health Care Digest 10

24 Office of Capital Access Associate Administrator William Manger SBA & CDFI s

25 Benefits to CDFI s of SBA Programs SBA Loan Programs add additional economic development incentives for your community Provide continuum of loan products to service small business life cycle from startup to mature business Leveraging SBA resources such as Preferred Lenders, Certified Development Companies & Small Business Development Centers Additional fee revenue from program income 504: Leveraging larger project sizes up $5.5 25

26 The state of American Small Business Executive Summary February Unemployment fell to 3.8% marking the 12th consecutive month where the unemployment rate has been at or below 4 percent Average hourly earnings rose by 3.4 percent over the past 12 months the fastest nominal hourly wage growth since 2009 SBA is committed to improving access to capital for all of America s small businesses that cannot obtain credit elsewhere The Office of Capital Access has many products and resources available to CDFIs SBA aims to increase loans to rural and HUBZones by 5% 26

27 Microloans Target: Lending to socially and economically disadvantaged Minority and Women-owned businesses Low/Mod. Income, HUBZone, Empowerment Zone Enterprise Communities and Promise Zone Veteran-owned businesses Startups Microloans flexible underwriting (parolees and probationers may be eligible) $500 to $50,000 Lenders must provide technical assistance 27

28 Veteran Women Minority YTD Activity 7(a)/504 Underserved Markets Fiscal Year Approved Loans % of # Approved Dollars % of $ , % $ 9,687,085, % , % $ 9,588,640, % , % $ 8,755,711, % , % $ 8,033,343, % , % $ 6,627,383, % , % $ 6,336,457, % Fiscal Year Approved Loans % of # Approved Dollars % of $ , % $ 3,885,648, % , % $ 4,112,875, % , % $ 3,968,023, % , % $ 3,670,248, % , % $ 3,071,808, % , % $ 2,977,832, % Fiscal Year Approved Loans % of # Approved Dollars % of $ , % $ 1,064,474, % , % $ 1,119,597, % , % $ 1,316,067, % , % $ 1,370,204, % , % $ 761,938, % , % $ 821,294, % Time Period Comparison (activity through 09/30 of each FY) **Information submitted on a voluntary basis and not verified by SBA for completeness or accuracy 28

29 Veteran Women Minority YTD Activity Microloans Underserved Markets Fiscal Year Approved Loans % of # Approved Dollars % of $ , % $ 29,941, % , % $ 29,053, % , % $ 26,546, % , % $ 21,361, % , % $ 22,465, % , % $ 24,962, % Fiscal Year Approved Loans % of # Approved Dollars % of $ , % $ 28,030, % , % $ 26,267, % , % $ 23,199, % , % $ 18,775, % , % $ 21,440, % , % $ 24,119, % Fiscal Year Approved Loans % of # Approved Dollars % of $ % $ 3,705, % % $ 3,392, % % $ 3,169, % % $ 2,504, % % $ 2,185, % % $ 2,083, % Time Period Comparison (activity through 09/30 of each FY) **Information submitted on a voluntary basis and not verified by SBA for completeness or accuracy 29

30 Top CDFIs by FY18 Approval Amount 30

31 SBA is Addressing the Challenge of Limited Access to Capital for U.S. Small Businesses Along with private lenders, SBA works to provide access to capital for small businesses that cannot get conventional financing: Designing simpler products to increase small dollar lending SBA provides an electronic application platform SBA One and E-Tran loan platforms reduce the time & cost associated with originating SBA loans Lender Match Using technology, borrowers can find online lenders interested in specific loan types 31

32 USDA Rural Development Your Partner in Community Development CDFI Coalition Institute March 13, 2019 Presented by Mark Brodziski Deputy Administrator Rural Business-Cooperative Service

33 USDA Rural Development Agencies Rural Utilities Service Electric Program Water & Environmental Programs Telecommunications and Broadband Programs Rural Housing & Community Facilities Homeownership Loans Home Repair Loans & Grants Mutual Self-Help Technical Assistance Grants Multi-Family Housing Loans Farm Labor Housing Loans & Grants Housing Preservation Grants Community Facilities Loans & Grants Rural Business & Cooperative Service Business and Industry Guaranteed Loans Intermediary Relending Program Rural Microentrepreneur Assistance Program Rural Business Development Grants Rural Energy for America Program Value Added Producer Grants Cooperative Development Assistance

34 ural Business-Cooperative Service Programs 1. Funding Available to CDFIs: Intermediary Relending Program Rural Microentrepreneur Assistance Program Rural Business Development Grants

35 Rural Business-Cooperative Service Programs 2. Loan Guarantees to Lenders: Business and Industry Guaranteed Loans Rural Energy for America Program

36 ural Business-Cooperative Service Programs 3. Co-funding, Technical Assistance, and other Resources: Rural Energy for America Program Rural Economic Development Loan and Grant Program Value Added Producer Grants Cooperative Development Assistance

37 Rural Business-Cooperative Service Programs Rural Areas Outside of cities and towns with populations of 50,000 and greater Urbanized areas contiguous to cities are also ineligible Program specific exceptions for agricultural producers and local foods projects

38 ntermediary Relending Program Loans from USDA to Intermediary Loans to Nonprofit Organizations, Cooperatives, Federally recognized Indian Tribes, and Public bodies Loan purpose to capitalize a revolving loan fund Maximum $2MM for first financing and maximum of $1MM subsequent Interest rate is 1% fixed up to 30-year terms

39 ntermediary Relending Program Loans from Intermediary to Ultimate Recipient Loans to rural business and rural community development projects Unable to access affordable commercial financing for the IRP financing Loan participations are eligible $250,000/$150,000 maximum loan amount NTE 75% of project cost Negotiated rates and terms

40 ural Microentrepreneur Assistance Program Loans and Grants from USDA to Microenterprise Development Organization Loans and Grants to Nonprofit Organizations, Federally recognized Indian Tribes, and Institutions of Higher Education Loan purpose to capitalize a revolving loan fund and grants for technical assistance Maximum $500,000 loan NTE aggregate of $2.5MM Interest rate is 2% fixed up to 20-year terms

41 ural Microentrepreneur Assistance Program Loans from Intermediary to Ultimate Recipient Loans and technical assistance to rural microentrepreneurs and microenterprises (Businesses with 10 or fewer full time employees.) $50,000 maximum loan amount NTE 75% of project cost Negotiated rates and terms

42 ural Business Development Grants Grants from USDA to Intermediaries Grants to Nonprofit Organizations, Federally recognized Indian Tribes, Cooperatives, Public Bodies, and Institutions of Higher Education Grant purposes include to capitalize a revolving loan fund, technical assistance, business incubator, community economic development, economic development planning, and training Maximum $500,000 grant

43 ural Business Development Grants Assistance from Intermediary to Ultimate Recipient Directly assist or project that ultimately assists rural small and emerging business (<50 FTEs and <$1MM gross revenue) $50,000 maximum loan amount NTE 75% of project cost Negotiated rates and terms

44 Rural Business-Cooperative Service Programs Loan Guarantees Lender Eligibility 1. A bank or credit union subject to credit examination and supervision by a Federal or State Agency, or 2. Other Lender: Rural Energy for America Program Three commercial loans annually for at least the most recent three years, Delinquent loans not exceeding 10 percent of loans outstanding, and Historic losses not exceeding 10 percent of dollars loaned, Business & Industry Program At least 10 commercial loans annually totaling at least $1 million for each of the last 5 years, delinquent commercial loan portfolio exceeding 6 percent of all commercial loans made, and Not exceeding 3 percent in commercial loan losses

45 ural Energy for America Program Renewable Energy Systems Energy Efficiency Improvements Minimum Grant Request $2,500 Total eligible project costs > $10,000 Minimum Grant Request $1,500 Total eligible project costs > $6,000 Maximum Grant Request $500,000 Total eligible project costs > $2 million Maximum Grant Request $250,000 Total eligible project costs > $1 million

46 Rural Energy for America Program

47 Business & Industry Loan Guarantees Loans to Rural Business and Rural Community Development Projects Loans up to $25MM Loan funds used to: o Develop and start up new business or expansion of existing o Purchase real estate or buildings, Equipment, supplies, or inventory o Refinancing o ESOP and Cooperative Ownership business conversions Negotiated rates and terms

48 ural Business-Cooperative Service Programs Co-funding, Technical Assistance, and other Resources: Rural Energy for America Program Rural Economic Development Loan and Grant Program Value Added Producer Grants Cooperative Development Assistance

49 Rural Business-Cooperative Service Program Access Points:

50 Mark Brodziski Deputy Administrator Rural Business-Cooperative Service Sami Zarour Director, Specialty Programs Rural Business-Cooperative Service

51 Division of Housing Mission and Goals Housing Goals and CDFI Participation CDFI Institute March 14, 2019 Contact: Ethan Handelman, OHCI

52 CDFIs in the FHLBank System CDFIs in the FHLBank System Access to stable, on-demand low-cost funding Advances must be backed by member s collateral Members have to make long-term mortgages representing 10% of their assets Community Investment Program (or CIP) finances eligible targeted affordable housing Community Investment Cash Advances (CICA) provide low-cost financing for community development and affordable housing H O U S I N G G O A L S A N D C D F I P A R T I C I P A T I O N 52

53 Duty to Serve Opportunities for CDFIs with the Enterprises Duty to Serve Underserved Markets Manufactured Housing Affordable Housing Preservation Rural Housing Learn more in: Snapshot summaries of the plans Data visualizations Full Underserve Markets plans Regulations Example activities Both Enterprises plan to purchase additional rural single-family loans from small institutions during Additional loans Above baseline Freddie Mac 4,550 to 6,000 ~3,900 Fannie Mae 4,873 to 6,623 ~14,000 Fannie Mae: bulk purchases of single-family mortgages from small institutions in rural areas Freddie Mac: securitizing small balance multifamily loans Visit H O U S I N G G O A L S A N D C D F I P A R T I C I P A T I O N 53

54 FHLBank Housing Goals for AMA Mortgage Purchases Current goals are retrospective market comparisons that only take effect if a Bank purchases more than the $2.5 billion volume threshold. Proposed rule would establish two goals for AMA purchases: 1. Prospective mortgage purchase housing goal: 20% of each FHLBank s AMA single-family mortgage purchases must be affordable by any of several criteria. 2. Small member participation housing goal: Small members (below $1.199B in assets) should be 50% of AMA users. Annual progress is sufficient if a Bank is below target level. FHLBanks could propose alternative target levels for FHFA approval. Proposed rule would eliminate the volume threshold. Freddie Mac 25% H O U S I N G G O A L S A N D C D F I P A R T I C I P A T I O N 54 Ginnie Mae 37% 2017 Secondary Mortgage Market Activity FHLB AMA 1% Fannie Mae 37% What loans count for the housing goal? Low-income borrowers Very low-income borrowers In low-income areas, including minority and designated disaster areas Learn more: