Community Assets for People LLC (CAfP) is a US Treasury-certified Community Development Financial Institution and a wholly-owned affiliate of CAP Services. Community Assets for People provides loans for downpayment and closing cost assistance to low- and moderate-income households seeking to purchase or rehabilitate their home. Business loans are made to start or expand a business benefiting low-income people or bringing new wealth into the community.
Housing loans are made at 2.25% simple annual interest. Principal and interest payments are deferred until the resale of the home, until it is no longer the primary residence of the original qualifying household, or for 30 years. All houses purchased with a loan from CAfP must meet HUD housing quality standards and DoE Weatherization standards. CAP Services began offering housing assistance loans in 1991 and then established CAfP to serve as its lending arm in 1999. Since 1991 more than 800 households have been helped to purchase their first home. The default rate for all homebuyer assistance loans during this period has been less than 15%.
Business loans are made at 4-8% interest, usually for a seven year term, although longer terms and amortization periods can be negotiated. Lower interest rates are available based on job creation on a case-by-case basis.
WHO DO WE SERVE?
CAfP provides homebuyers assistance to low- and moderate-income households living in Marquette, Outagamie, Portage, Waupaca, Waushara and Wood Counties. Low- and moderate-income (LMI) households are defined as those with household incomes under 80% of the county median income. The service area is a largely rural. Two of the counties (Marquette and Waushara) are among the poorest in Wisconsin (their median income is less than 75% of the state median income) and the City of Stevens Point in Portage County has a 21% poverty rate.
Businesses loans are made to low- and moderate-income households and to businesses creating living wage jobs (above $9 an hour with employer sponsored health insurance) that will be filled by individuals living in LMI households. The primary purpose of Community Assets’ business loans is to provide “gap” financing using higher than normal loan-to-value ratios. For example, while traditional lenders only finance 50% of the value of equipment, CAfP will loan up to 75%. For finished inventory, CAfP will loan up to 50% and for unfinished inventory 25%. In 2006, CAfP established a new loan fund, the Gazelle Fund. This fund makes loans to value-added businesses experiencing rapid growth that need help with either space costs, equipment or working capital. An innovative component of the Gazelle Fund is CAP’s Lease-Purchase Program.
LMI households often need budgeting assistance to prepare for homeownership or business start-up. CAfP requires all homeownership participants to complete an individualized housing counseling course offered by CAP Services’ certified Housing Counselors. All business borrowers are required to complete an acceptable business plan through assistance offered by CAP Services’ Business Development Coordinators. If the household needs credit repair or financial counseling services, members are referred to other local groups for a credit counseling course.
WHERE DO WE GET OUR FUNDS?
CAfP’s homebuyer and rehabilitation loan funds are recapitalized through funding provided by the federal HOME and state HCRI programs and small number of investments from faith-based groups resulting in a cost of funds of .2%. When CAP Services obtains new state and federal grants to provide homebuyers assistance, it loans those funds to qualified LMI households. When repaid, they are transferred to Community Assets for People and relent either as part of a larger loan package or as stand-alone loans. As of 12/31/08 Community Assets for People had just over $9.67 million in housing loans receivable. Loan repayments have averaged $350,000 a year and new capital infusions from state and federal grants average $300,000 a year. The demand for loans has been approximately $700,000 a year for the last five years.
CAfP’s business loan fund is capitalized through a combination of federal grants, donations, and loans from the public, private for-profit and private non-profit groups with a cost of funds of 1.33%. As of 12/31/09 Community Assets for People had just over $3.9 million in business loans receivable.
Staffing costs for the loan funds are approximately $150,000 annually, paid through donations, government grants, fees and interest income. Downpayment and rehabilitation loans average $7,283. Business loans average $36,448.
For additional information contact:
President & CEO
VP and Business Development Director