In Case You Missed It

Yesterday the White House released the President’s fiscal year (FY) 2019 budget request, which includes cuts to housing and community development programs as drastic as its FY 2018 request. It calls for slashing funding for HUD 18 percent from current funding levels to $39.2 billion.

 

It also proposes to eliminate funding for Section 4 Capacity Building for Affordable Housing and Community Development (Section 4), HOME Investment Partnerships (HOME), Community Development Block Grants (CDBG), the Community Development Financial Institutions (CDFI) Fund, Choice Neighborhoods Initiative, and the Public Housing Operating Fund.

 

A small bright spot in the request is a proposal to allocate $100 million to the Rental Assistance Demonstration (RAD) program, which converts public housing properties to project-based Section 8 contracts that can leverage private capital and financing. The proposal also eliminates the 225,000-unit cap on RAD conversions.

 

However, the $100 million would not address the nationwide public housing capital backlog of $27 billion. Last year Congress largely rejected the cuts proposed in the President’s budget request, housing and community development advocates continue defending these programs and ensure that lawmakers understand their value.

 

Urban Institute Looks at How Instituting Work Requirements and Raising Rents for Recipients of Federal Housing Assistance

A blog post by the Urban Institute looks at how instituting work requirements and raising rents for recipients of federal housing assistance, which the President’s fiscal year (FY) 2019 budget request proposes, would impact lower-income families.

 

According to the blog, amending the U.S. Housing Act to raise rents and institute work requirements for residents of public housing and HUD-subsidized properties would reduce their ability to pay for other essential costs that support employment, such as childcare and transportation. In addition, the post highlights that there is no evidence to support that increasing rent or/and instituting work requirements for HUD-assisted households would result in increases in employment or income for lower-income households. (Urban Institute, February 13)

Governor John Deal of Georgia Urged to Nominate Distressed Census Tracts

Governor John Deal of Georgia urged to strategically nominate 25 percent of the state’s distressed census tracts for this classification, as well as to request a 30-day extension to consult with local stakeholders, advocates and residents before making these important decisions. A mapping tool shows that Georgia has 1,037 qualified distressed census tracts overall, which means up to 260 will be designated as an Opportunity Zone. The op-ed notes that aligning the census tract nomination process with current place-based approaches and local initiatives, such as transit, housing, healthcare, education and employment opportunities, is necessary for collective impact, growth and economic prosperity.

 

Budget and Policy Priorities (CBPP) notes that the $1.5 trillion plan

A blog post by the Center on Budget and Policy Priorities (CBPP) notes that the $1.5 trillion plan assumes that states, localities and the private sector will contribute $1.3 trillion, without addressing the question of how they will raise these funds. The blog explains that the core element of the proposed plan, the $100 billion in grants that must account for no more than 20 percent of a project’s cost, would shift funding burden to financially-constrained states and local governments.

 

Governors must submit their recommendations for Opportunity Zone designations to the Treasury Department by March 21, unless they request a 30-day extension. Given that census tracts approved by the Treasury Department will retain an Opportunity Zones designation for 10 years.

 

President’s Trump Long-awaited Infrastructure Plan

White House released a proposal for President’s Trump long-awaited infrastructure plan, laying out a framework for lawmakers to craft legislation for a $1.5 trillion infrastructure package. According to the proposal, the federal government would contribute $200 billion – raised largely through spending cuts – to the infrastructure package, including $100 billion for an incentives program that would encourage increased state, local and private investment.

 

U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund)

Today the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) awarded 73 Community Development Entities (CDEs) $3.5 billion in New Markets Tax Credits (NMTCs). Over the years, the NMTC Program has generated $8 of private investment for every $1 invested by the federal government, and through the end of fiscal year 2016, grantees have deployed more than $44.4 billion in investments in low-income communities and businesses.

 

This year’s grantees were selected from a pool of 230 applicants that requested an aggregate total of $16.2 billion in tax credit allocation authority.  The work of 73 recipients is expected to include more than $685 million in NMTC investments in nonmetropolitan counties. (CDFI Fund, February 13) The President’s fiscal year (FY) 2019 budget request eliminates federal funding for CDFI Fund programs and proposes to lower funding for the CDFI Fund to $14 million solely for administrative funding to support the NMTC Program and the CDFI Bond Guarantee Program.

The Future Of American Malls: Recreation Over Retail

One of the most promising strategies that mall operators are developing to bring back shoppers calls for replacing anchor retail spaces with recreation. The digital age has presented mall operators with their greatest challenge in a generation. Major retail centers that once dominated the local market are now rethinking their long-term plans as so many consumers choose internet shopping over a trip to Macy’s, Sears or Kohl’s.

 

This is a nationwide issue that spans well beyond individual regions and represents a sea change across the industry. As e-commerce takes more customers away from traditional retail, malls face the prospect of losing the foot traffic they need to remain financially viable. Operators are already developing new strategies for capturing consumer interest with attractions that bring people back to the mall and keep them inside.

 

One of the most promising strategies calls for replacing anchor retail spaces with recreation, entertainment, and educational centers that give consumers unique, family-friendly experiences they simply can’t find or replicate on the internet. Data have shown that this approach is already emerging as a nationwide trend.

 

While overall shopping center space in America grew by 0.8% over the past four years, space filled by apparel stores fell by around 3%, according to an analysis by the CoStar Group. Over that same period, there has been a robust 6% increase in the amount of large shopping center spaces filled by recreation and entertainment tenants. Mall operators are starting to recognize that they can create a crucial opportunity for themselves and their investors by repurposing a vacant department store into something fresh and new for consumers.

 

For example, as part of pursuing a recreation-oriented strategy, General Growth Properties became the first American mall operator to sign a deal with KidZania, an experiential learning center for children that builds real-world skills in an engaging environment. This concept, which has 24 locations overseas, is a prime example of a business model poised to transform struggling anchor spaces into thriving hubs of activity that give millions of families a new and compelling reason to visit their local mall.

 

Where once stood racks of unsold merchandise, KidZania creates a mini-city—complete with its own roads, buildings and currency— where children can role-play more than 100 occupations. Corporate sponsorships create a more authentic experience for participants—with name brands on every mini-city establishment—while also generating a sustainable revenue stream that keeps the space profitable over the long term.

 

Less than two months after launching into the US market, KidZania has already signed two anchor space leases and is actively exploring deals with other mall operators across the nation. Other recreation and entertainment venues are generating similar results because experts know this trend will only continue to gain steam. The bottom line is that the new challenges facing retail do not need to mean the end of major malls nationwide. Like any other shift in the market, it is just an opportunity to find a new and better strategy for success.

 

Rural Towns Are Replacing Inner Cities As The Most Troubled Areas In America

When it comes to poverty, education and death rates from cancer and heart disease, rural America has replaced the inner city. A Wall Street Journal analysis found that rural counties rank the lowest among all four major U.S. population groupings when it comes to critical socioeconomic measures, putting them behind big cities, suburbs and medium or small metro areas, the Wall Street Journal reports.

 

Manufacturing and agriculture jobs have steadily disappeared in recent decades, and census figures show urban residents are nearly twice as likely to hold a college degree than rural residents. At the same time real estate appreciation in rural areas has lagged behind city growth, further impoverishing rural families.

 

Lending in Puerto Rico

We will be aligning our funding efforts with SCC the only licensed Claims Group working in Puerto Rico. We need other Lenders (Credit, Bridge, Short-Term, etc.)  to come alongside our efforts. If interested, please email contact person information.

 

We orchestrate to fit the “Box”

Real Estate Equity & Lending PlatformsBridgge

 

As a direct lender, we have the ability to analyze and fund loan requests very quickly in order to meet time-sensitive transactions. We finance commercial, industrial, and multi-family properties as well as entitled land, with a primary emphasis on Institutional quality properties. We do lend in all 50 states, but with a particular focus on California, Texas and Florida in addition to targeting experienced local investors and operators in their perspective markets.

 

We have interest in being available to provide Joint Venture Capital or any part of the Capital Stack. We are a Nationwide Direct Commercial Mortgage Correspondent Lender for all of the Freddie, Fannie, HUD, USDA and 15 Institutional Insurance Company programs.

 

We look to begin new partnerships for co-investment on a single project initially, but with a business plan set for more opportunities to work together on in the near future. Further, We can recapitalize equity in existing assets, portfolios, and developments. CFO Capital Partners can bring LP or GP equity.  Generally we look to bring 70-90% of required equity though this can be negotiable.  In addition, our terms bring favorable debt options which can be recourse or non-recourse.

 

We can also provide acquisition, refinancing, and bridge financing.  Mezzanine financing and preferred equity capital options are also available. Please email (contact & project information) to Paul Sheldon: PSheldon@CFOCapitalPartners.com.

 

Currently equity investments are constrained to the US Virgin Islands, Puerto Rico and the USA

Keep it simple and start with a strong EXE Summary that will allow us to understand quickly and give a quick yes or no.

www.CFOCapitalPartners.com * Carl@CFOCapitalPartners.com * 646.719.9246 x102

 

We consider the total picture of the transaction and offer a diverse array of loan products and terms along with an efficient process with quick closings.

 

CFO Capital Partners also has a real estate development division which provides Investor Equity, which focuses on Joint Venture and Capital Raises for building multifamily and commercial properties. CFOCP deploys numerous strategies to capitalize on off-market opportunities, including through joint-ventures, trust sales, bankruptcy sales, tax defaults, and purchasing distressed properties and defaulted notes.

 

BALANCE SHEET FINANCING SOLUTIONS FOR COLLEGES AND UNIVERSITIES

Focused exclusively on opportunities to invest $10+ million

100% of the required capital to purchase, renovate or build-to-suit

 

GOVERNMENT SPONSORED ENTITIES – We are licensed

Fannie Mae Delegated Underwriting & Servicing (DUS®)

Fannie Mae Multifamily Affordable Housing Lender

Fannie Mae Small Balance Lender

Freddie Mac Multifamily Licensed Seller/Servicer for Conventional Loans

Freddie Mac Multifamily Licensed Seller/Servicer for Targeted Affordable Housing Loans

Freddie Mac Multifamily Designated Seller/Servicer for Manufactured Housing Loans

 

GOVERNMENT AGENCIES – We are licensed

FHA / GNMA (HUD) Multifamily & Healthcare

USDA Section 538 Rural Development Lender

 

LIFE COMPANIES

 

AEGON, AIG Global Investment Corp., Allstate Investments, American Equity, American Fidelity, American National, AUL/OneAmerica, Cuna Mutual Group, Eagle Realty Group, Equitrust, Farm Bureau Life Insurance Company of Michigan, FBL Financial Group (Farm Bureau of Iowa), Genworth Financial, Great-West Life, John Hancock, Innovative Capital, Lincoln Financial Group, MetLife, ​Morgan Stanley, Mutual of Omaha, National Life of Vermont (Sentinel Asset Management), Nationwide Life Insurance Company, New York Life Insurance Company, Northwestern Mutual, Ohio National, PPM Finance, Inc., Principal Real Estate Investments, Protective Life Insurance Company, Prudential, RGA (Reinsurance Group of America), Royal Neighbors of America, StanCorp Mortgage Investors, LLC, State Farm Insurance Companies, Sun Life Assurance Company of Canada

Symetra Financial, Thrivent Financial for Lutherans, TIAA-CREF, Ullico, Unum, Voya Investment Management

 

 

CMBS

 

Bank of America, Barclays, CCRE, CIBC, CitiGroup, Credit Suisse, Deutsche Bank, Goldman Sachs

​Guggenheim Real Estate, JP Morgan, Ladder Capital, Morgan Stanley, Rialto, UBS, Wells Fargo

 

 

 

NON-PROFIT PROGRAMS INCLUDE

A wide range of transactions, from traditional deals to specialized capital solutions. Together with our corporate partner, we are making a difference.  We are the country’s largest LIHTC syndicators and one of the largest New Markets Tax Credit allocates and own in excess of 300,000 affordable rental units.

  • Low-Income Housing Tax Credits
  • New Markets Tax Credits
  • Community Loan Funds
  • Development & Consulting
  • Grants
  • Equity
  • Bridge Loans

 

 

 

Bellwether Closes Over $430 Million in Affordable Housing Loans in Q4, 2017

(Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary announced the projected closing of over $430 million in loans for over 24 affordable housing properties across the country in Q4, 2017. In the month of October alone, the Affordable Housing team closed more than $160 million of this total number. Building on Bellwether Enterprise’s long-standing expertise in the affordable lending space, this high volume of deals further demonstrates the company’s deep commitment to preserving and rehabilitating affordable housing properties for families in need across the nation.

 

Highlights include:

  • Aeon Towers Portfolio, a fixed-rate preservation acquisition loan for 10 affordable housing properties located in the Minneapolis–Saint Paul metropolitan region in Minnesota. Combined, the properties feature 768 units and are located across four cities—Bloomington, New Hope, St. Paul, and Brooklyn Center.
  • Appling Lakes at Cordova Club, a Fannie Mae MBS acquisition loan for a workforce housing property in Cordova, Tennessee. Located outside Memphis, the 312-unit property is situated across 26 acres and includes 17 two- and three-story residential buildings and a clubhouse. The property also features top-notch amenities including a fitness center, lighted tennis court, sand volleyball court, pool, business center, and clubhouse with a full kitchen.
  • Building 9 South (Mercy Magnuson Place), a Freddie Mac Forward Tax Exempt Loan (TEL) for the gut renovation of an affordable housing property in Seattle, Washington. The project entails the adaptive re-use and rehabilitation of a historically-significant naval barracks into a 148-unit affordable apartment building. The project will include amenities such as a health center, daycare center, and computer lab. The building’s exterior and key historic interior elements will be preserved, and energy efficiency will be prioritized during reconstruction.
  • The Savannah at Gateway, a Fannie Mae MBS 15-year fixed-rate loan for an affordable housing property in Plano, Texas. The senior community is a LIHTC property that features 292 units reserved for tenants aged 55 or older. Located near the intersection of Shiloh and Renner roads, the property includes a clubhouse, fitness center, community kitchen, and recreation room. Individual apartments also feature balconies, high ceilings, and efficient appliances.