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The California Department of Housing and Community Development Announces $23.2 Million award for Development and Preservation of Affordable Housing

January 4, 2012

FOR IMMEDIATE RELEASE
Date: January 4, 2011
Contact: Colin Parent
Director of External Affairs
916/445-4775
cparent@hcd.ca.gov

The California Department of Housing and Community Development Announces $23.2 Million award for Development and Preservation of Affordable Housing

Sacramento – Today the Department of Housing and Community Development (HCD) awarded a $23,250,000 loan as seed capital to form the Golden State Acquisition Fund to finance affordable housing.

The loan was awarded to a consortium of four non-profit community development financial institutions. The Golden State Acquisition Fund (GSAF) will be a property acquisition bank, managed by the nonprofit consortium. The GSAF will make loans to housing developers to acquire real property for the development and preservation of affordable housing.
The consortium has committed to operating the GSAF with capital totaling $93,000,000. $23,500,000 represent state funds from HCD and the remainder will be provided by the consortium and private investors.

“This award will provide many Californian’s with affordable housing and the opportunity for homeownership,” said Acting HCD Director, Cathy E. Creswell.

Loans from the GSAF will be made at favorable, below-market-rate terms, providing access to much-needed acquisition capital for affordable housing developers. The project loans will be available statewide, and will serve urban and rural communities. Loans will lead to the development of both rental housing and homeownership opportunities for low-income California households.
The GSAF will serve as a revolving loan fund – the $93 million will be loaned out, repaid, and loaned out again. Loan terms for affordable housing developers will average about 3 years, and when repaid, the funds will be available for new projects.
The consortium members include four community development financial institutions:

• Low Income Investment Fund
• Rural Communities Assistance Corporation
• Enterprise Community Loan Fund
• Century Housing

The $23,000,000 award is a loan from HCD at 0% interest, with a 5-year term. The loan to the nonprofit consortium is renewable in 5 year increments.

The consortium has committed to providing leveraged capital to the GSAF in excess of the 3:1 ratio that was required in the request for proposals. To be awarded the loan, the applicants had to demonstrate local government support, organizational ability, and a track record of developing affordable housing.

Funds provided by HCD are from Proposition 1C, the $2.85 billion Housing and Emergency Shelter Trust Fund Act passed by California voters in 2006. Prop. 1C created a $100 million Affordable Housing Innovation Fund, from which HCD is now awarding funds to create the Golden State Acquisition Fund.

HCD provides leadership, policies, and programs to preserve and expand safe and affordable housing opportunities and promote strong communities for all Californians. The Department also supports increasing the supply of housing, especially affordable housing and works to improve the state’s housing conditions and the health and safety of its residents. HCD is California’s lead housing department, and is part of the state Business, Transportation and Housing Agency.

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