The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) announced last week the recipients of the Capital Magnet Fund’s fiscal year (FY) 2017 round of funding. Forty Community Development Financial Institutions (CDFIs) and other non-profit housing organizations, including five state HFAs, will receive funding to support the development of affordable housing and related economic development activities in low-income communities.
The Capital Magnet Fund (CMF) provides competitive grants to CDFIs, HFAs, and other eligible nonprofit organizations to support the development, rehabilitation, purchase, and preservation of affordable housing. Recipients may also use CMF awards to finance related economic development and community service facilities, including day care centers and health clinics, but grantees must spend at least 70 percent of their award on affordable housing activities.
CMF funding comes from assessments on Fannie Mae and Freddie Mac using a formula based on the total principal of new loans they insure each year. The money from these assessments is split between the CMF and the Housing Trust Fund. The FY 2017 CMF awards, the third in program history, were financed by Fannie Mae’s and Freddie Mac’s allocations from calendar year 2016.
In total, 40 recipients will receive $120 million in funding for FY 2017, including five state HFAs who combined were awarded just over $24.6 million. The HFA grantees include:
- Colorado Housing and Finance Authority, $7.1 million: to be combined with tax-exempt private activity Housing Bonds to create an affordable housing fund dedicated to financing 4 percent state Housing Credit preservation deals and new affordable housing construction projects throughout the state.
- New Mexico Mortgage Finance Authority, $3.6 million: to capitalize an affordable housing fund that provides down payment or other purchase assistance to low-income homebuyers in New Mexico.
- Pennsylvania Housing Finance Agency, $4 million: to help preserve existing affordable housing and increase the amount of affordable homes for households with incomes below 50 percent of the area median income.
- Rhode Island Housing, $4.7 million: to capitalize an affordable housing fund that will provide gap financing for 4 percent Housing Credit projects.
- Wisconsin Housing and Economic Development Authority, $5.2 million: to provide affordable rental housing and single-family homeownership opportunities to Wisconsin’s underserved, low-income communities.
More information on each grant awarded through the Capital Magnet Fund is available in a searchable database on the CDFI Fund’s website. Information on the Capital Magnet Fund application process is available here.