Brown Announces $4.8 Million Investment in Ohio Affordable Housing
Award will Help Create Approximately 1,400 Affordable Housing Units in Ohio
WASHINGTON, D.C. – (RealEstateRama) — U.S. Sen. Sherrod Brown (D-OH) today announced $4,800,000 in new federal funds for the Ohio Capital Finance Corporation (OCFC) to help finance affordable housing for low-income families across Ohio. The critical below-market-rate financing offered by OCFC as a result of this award will reduce overall development costs to help make this housing possible. OCFC will use these funds to leverage at least $10 in other investments for every $1 provided in the award.
“For too many Ohioans, cost is a major barrier to finding safe, stable housing,” said Brown. “This significant investment will help the Ohio Capital Finance Corporation offer financing to housing serving low-income families throughout the state. Financing developments like these not only increases access to housing for low-income families – it also boosts the local economy and supports jobs.”
“OCFC is honored to receive its second award of Capital Magnet Funds from the CDFI Fund,” said Jon Welty, President of Ohio Capital Finance Corporation. “This award creates an innovative opportunity for OCFC to provide and leverage additional dollars for affordable housing in Ohio and Kentucky.”
The U.S. Department of Treasury’s Community Development Financial Institutions (CDFI) Fund Capital Magnet Fund Program awarded the $4,800,000 grant to OCFC. OCFC will use the award to leverage an additional $185 million in lending and development capital from private sources such as community and regional banks; it is anticipated that this will result in the construction of more than 1,400 affordable housing units in Ohio. OCFC will award below-market rate construction and equity bridge loans to projects throughout the state to help reduce construction interest costs and increase equity. OCFC is one of 32 awardees that serve 37 states and the District of Columbia. OCFC also serves the state of Kentucky, but expects approximately 95 percent of the funding to be invested in Ohio.
The Capital Magnet Fund helps low-income families and economically distressed communities by attracting investment for affordable housing and related economic development. The Capital Magnet Fund provides competitively awarded grants to CDFIs and qualified non-profit housing organizations to develop, rehabilitate, preserve, and purchase affordable housing for Low-, Very Low-, and Extremely Low-Income families. Capital Magnet Fund awards can be used to finance affordable housing activities as well as related economic development and community service facilities such as day care centers, workforce development centers and health care clinics. Awardees utilize financing tools such as loan loss reserves, loan funds, risk-sharing loans, and loan guarantees to produce eligible activities within five years with aggregate costs that are at least 10 times the size of the award amount.
The Capital Magnet Fund, created in the Housing and Economic Recovery Act of 2008, is funded by contributions from Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. After its creation, the Fund was not consistently funded as intended but, in December 2014, following requests from Brown, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to begin regular contributions.
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Source: U.S. Sen. Sherrod Brown
