What is a Neighborhood Finance Corporation (NFC)?
A Neighborhood Finance Corporation helps to revitalize neighborhoods through unique lending programs for home repair and neighborhood upkeep.
Why is Cedar Rapids Considering a Neighborhood Finance Corporation?
The City of Cedar Rapids has used disaster recovery funds since the Flood of 2008 for replacement housing and neighborhood revitalization. However, these funds have now been exhausted. To continue these efforts, Cedar Rapids is fundraising for a Neighborhood Finance Corporation.
For residents, a Neighborhood Finance Corporation provides opportunities for:
- Purchase, refinance, and home improvement loans.
- Every loan has a repayable portion and a portion that is forgiven over 5 years.
- The forgivable loan is secured with a 5-year lien against the property. Rehab loans can be up to $10,000 per property every 10 years to complete improvements.
Targets specific neighborhoods for community benefit
- Housing inventory maintained at more economical repair costs.
- Neighborhood improvements have a positive “spill-over” effect.
- As home values increase, the City’s property tax base will increase.
Increases Quality Workforce Housing
- Quality housing is key factor in attracting and retaining skilled employees.
- Investing in housing before more extensive rehabilitation is necessary.
Program builds on flood recovery
- Much of the disaster recovery funding we received in 2008 has now been exhausted.
- Program will help replace the funding streams that have expired.
Operates as a separate 501(c)3, and will be self-sufficient
Does not duplicate other nonprofit efforts
- This initiative answers an unmet need and does not duplicate the efforts of local agencies.
- There is no other program currently offered in Cedar Rapids that provides targeted neighborhood revitalization through home purchase and home improvement loans.
Modeled after an already successful Des Moines program
- Financial expertise: Neighborhood Finance Corporation is a Community Development Financial Institution.
- 20+ years’ experience, more than 5,500 households impacted, over $300M in lending.
- Different than any other loan program, focusing on neighborhood reinvestment
Financial Partners and Goals
The City of Cedar Rapids has committed $1 million for FY2018, and is committed to an additional $1 million for each of the next five years.
We have already received commitments of $5M from local lenders for this unique loan pool
(as of October 2017).
We are asking the private sector for help supporting the program's operational start-up costs.
We estimate that the first three years of this program will require $1 million in start-up costs.
"The NFC program within Des Moines has been one of the most successful programs in our history. The City has invested $25 million in 25 years with over $300 million in mortgages. It has clearly provided the leverage of additional funds being invested in our City.”
~ DES MOINES CITY COUNCIL MEMBER CHRISTINE HENSLEY