Extends Benefits of New Markets Tax Credit Financing to Smaller Projects
ST. LOUIS, March 14, 2011 /PRNewswire-USNewswire/ -- IFF, the nonprofit lender and real estate consultant, today announced the establishment of an $8-million loan pool to make low-cost financing available to nonprofits located in Missouri census tracts that are eligible for the New Markets Tax Credit (NMTC) Program, including the Kansas City and St. Louis metropolitan areas. The loan pool is a collaboration between Central Bank of Kansas City Community Development Entity (which provided the NMTCs), U.S. Bancorp Community Development Corporation (USBCDC, which purchased the NMTCs, providing capital for the loan pool), and IFF (which provided additional capital and will underwrite and manage all loans funded through the pool).
IFF's loan pool is particularly innovative in that it brings the benefits of NMTC financing— low-rates, 7-year terms and interest-only payments—to community development projects that are typically too small to take advantage of the NMTC Program. The NMTC Program permits taxpayers a credit against their federal income taxes for making equity investments in qualified entities that target specific low-income areas for investment. Nationwide, more than $20 billion in private capital has been invested through the NMTC Program.
"This loan pool is an example of how IFF is constantly seeking new sources of affordable capital and developing innovative products to meet the financing needs of nonprofits," said Joe Neri, CEO of IFF. "It's our mission to provide this type of financing, and we appreciate Central Bank of Kansas City and USBCDC working with us to make this possible."
"Central Bank of Kansas City is proud to be a partner to this project along with IFF and U.S. Bancorp," said Bill Dana, President and CEO of Central Bank of Kansas City. "We are mission driven to help our low income communities and this program helps deliver real value to entities that typically would not be able to reach the typical threshold size for an NMTC transaction."
Eligible borrowers for the loan pool include nonprofits considering capital improvement projects of up to $1.5 million, located in census tracts designated as "distressed" or "highly distressed" under the NMTC Program and meeting IFF's underwriting criteria. Potential projects to be financed include the renovation or construction of buildings that would serve as charter schools, community health clinics, early child care centers, or facilities to provide a range of human services.
Nonprofits interested in learning more about IFF's loan pool and other financial products should contact IFF's St. Louis office at 314-588-8840.
Founded in 1988, IFF is the largest nonprofit Community Development Financial Institution (CDFI) lending exclusively to nonprofits in the Midwest. It has total assets of nearly $200 million and offers below-market loans, real estate consulting and research services to nonprofits serving low-income areas and special-needs populations in Illinois, Indiana, Iowa, Missouri and Wisconsin. To learn more about IFF, visit www.iff.org.
Central Bank of Kansas City (CBKC) was chartered in August 1950 as a state banking corporation but has been a family owned bank since the 1960's. CBKC has 5 locations across the Kansas City area and recently acquired Gateway Bank in St. Louis which it renamed Central Bank of St. Louis. The bank has been designated as a minority owned financial institution and a CDFI by the U.S. Treasury Department. Since 2007, CBKC has received three NMTC allocations totaling $123 million dollars. These funds have been used to revitalize the distressed areas in Kansas City, and now will be expanded into St. Louis. This year, CBKC is celebrating 60 years of serving the urban core of Kansas City.
U.S. Bancorp Community Development Corporation (USBCDC) finances community development and affordable housing projects through the use of New Markets Tax Credits, Historic Tax Credits, Low-Income Housing Tax Credits, and Investment Tax Credits in Renewable Energy. USBCDC is a subsidiary of U.S. Bank, the 5th largest commercial bank in the United States, whose parent company is U.S. Bancorp (NYSE: USB). With $308 billion in assets, the company operates more than 3,000 banking offices and over 5,300 ATMs in 24 states, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.