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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 17, 2012

Sacramento – On January 9, 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, including homeownership,” said Acting HCD Director, Cathy E. Creswell. “The need for homes affordable to lower income families and workers remains high and the GSAF provides much needed capital to a consortium of some of California’s most experienced community development organizations”.

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 to the consortium at 0% interest, with a 5-year term. The loan to the nonprofit consortium is renewable in 5 year increments. The consortium will loan these funds to finance affordable housing at below-market-rates.

Nancy O. Andrews, President and CEO of the Low Income Investment Fund (LIIF), said: "The announcement of the $23.2 million award from the Department of Housing and Community Development (HCD) is welcome news for the affordable housing industry at a difficult time. Our consortium of leading nonprofit community development financial institutions (CDFIs), comprised of Century Housing, Enterprise Community Loan Fund, Low Income Investment Fund and Rural Communities Assistance Corporation, is looking forward to working together to create the Golden State Acquisition Fund (GSAF). We believe the GSAF will help to fill a gap in financing for the development of affordable housing in California."

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 financing 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.

For further information, please contact Colin Parent, Department of Housing and Community Development, Director of External Affairs, (916) 445-4775, cparent@hcd.ca.gov

To access Golden State Acquisition Fund –Fact Sheet >> 

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