The U.S. Department of Treasury’s Community Development Financial Institutions (CDFI) Fund announced that the Ohio Capital Finance Corporation (OCFC), the lending affiliate of Ohio Capital Corporation for Housing, was awarded $4,900,000 from the Capital Magnet Fund to assist in leveraging private capital for use in affordable housing throughout Ohio and Kentucky. The critical below-market-rate financing offered by OCFC because of this award will reduce overall development costs to help make this housing possible. OCFC anticipates its financing will assist in the development of 1,500 affordable housing units.
“OCFC is honored to receive its third consecutive award of Capital Magnet Funds from the CDFI Fund,” said Jon Welty, Executive Directive 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.”
OCFC will leverage the $4.9 million CMF Award with private investor capital from community and regional financial institutions to create a $25M funding pool for affordable housing.
“By increasing access to affordable housing, we can give low-income families the opportunity to work toward financial security and help give all Ohio families a safe, stable place to call home,” said U.S. Senator Sherrod Brown (D-OH).
Over a 5-year period, OCFC expects to provide a total of over $200 million in total project cost financing for affordable rental housing. OCFC will provide below-market rate construction and equity bridge loans to Low Income Housing tax Credit projects, allowing for increased project equity and reduced debt allowing for lower tenant rents, which are needed in underserved markets. OCFC intends to lend a majority of these funds to projects in Areas of Economic Distress and provide funding for approximately 250 units in Non-Metro Counties.
The Ohio Capital Finance Corporation was created in 2002 to provide a flexible source of capital through predevelopment, acquisition and bridge financing to developers of affordable housing. To date, the OCFC and its sponsored loan funds have lent over $450 million through 575 loans utilized to develop and preserve more than 22,000 units of affordable housing across Ohio.
OCFC was one of 23 awardees to receive a $5M CMF award in the 2010 inaugural year funding cycle. Affordable housing production from the prior CMF award has assisted in the production of 1,001 units, 19 loans and successfully leveraged the award into $158M of total project costs.
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 and is overseen by the CDFI Fund.