Housing GSO: HRA Greensboro Affordable Housing Plan

PRESERVATION FUND CASE STUDIES

NOAH Impact Fund Minneapolis, MN Established 2017

The NOAH Impact Fund is comprised of $32.5 million raised from public, bank, and philanthropic sources. This $32.5 million is separated into a project investment fund and a credit enhancement tranche. Only the project fund, representing 70% of the total fund, may be used to invest in projects. The remaining credit enhancement is not invested in projects and is meant to be a back stop to losses incurred from fund investments. an investment loses money or underperforms, the credit enhancement is used by the Fund to make senior lenders in the project fund whole. By having a fund with a 30% credit enhancement or “top loss” that guarantees repayment, the funders of the project fund feel comfortable lending money at competitive interest rates. The fund’s investment hold in a project is ten years, with a two-year initial investment period. Capitalizing the fund requires each funder to offer long-term loans of up to twelve years. As of 2019, the Fund is fully deployed and raising capital for a second round. If

Loan Terms/Requirements $2.5M typical loan

Fund Capital Stack $32.5M Fund

Credit enhancement “top loss”

• Affordability covenant: 15 year deed restriction on property • Fund equity partnership: 10-year equity investment • 10% equity required from developers, 90% from fund • Take-out financing: market-rate financing

$2.5M GMHF

$5M Foundation

$3M County

Project fund

$5M MN HFA

Bank/CDFI Capital

$17M Community Banks

Public Capital

Philanthropic Capital

HR&A Advisors, Inc.

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