CHN HOUSING CAPITAL RECEIVES GOLD STANDARD DESIGNATION AS A COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION
CDFI designation will allow CHN Housing Capital to expand its lending to homebuyers of color, homebuyers with imperfect credit and low-to-moderate income homebuyers
Cleveland, Feb. 3, 2022 – CHN Housing Partners (CHN) announced today that its lending arm, CHN Housing Capital, has been certified as a Community Development Financial Institution (CDFI) by the U.S. Department of the Treasury. The Treasury’s CDFI Fund provides federal dollars for economic relief to communities that have been historically underserved by the financial sector.
CHN Housing Capital was created to address the lack of traditional home financing available to homebuyers of color, homebuyers with imperfect credit and low to moderate income homebuyers in Cleveland and Cuyahoga County. The lending arm aims to serve a target market that has faced barriers to lending, such as expensive down payments and difficulty securing low-interest loans, by providing access to capital through home mortgage loans, down payment assistance and home repair loans.
“The CDFI designation is the gold standard for nonprofit lenders, and we look forward to taking our lending activities to the next level in Cleveland and Cuyahoga County,” said Kevin J. Nowak, executive director of CHN Housing Partners. “At CHN we’re committed to the power of a permanent address. We want people to see and believe that homeownership – a cornerstone of generational wealth – is attainable, and that we are here to help.”
In 2010, CHN began lending to residents enrolled in its Lease Purchase Program, a 15-year path to homeownership. Since then, CHN has made over 800 loans worth $7 million and has built expertise in originating and servicing loans to people who do not meet traditional bank underwriting criteria. CHN’s loan portfolio has outperformed the industry standard.
In addition to originating mortgage loans to CHN’s own Lease Purchase residents, CHN Housing Capital offers the following lending products:
- The Believe Mortgage: The Believe Mortgage provides first mortgages to homebuyers plus up to $8,000 in second mortgages to finance health and safety repairs as needed. Lower credit scores and lower down payments are allowed, and private mortgage insurance is not required. Participants do not need to be first-time homebuyers (although buyers cannot currently own a home) and there are no income limits. CHN Housing Capital originated 30 Believe Mortgages in 2021.
- Down Payment Assistance:
- Cuyahoga County Down Payment Assistance provides borrowers who are at or below 80% of the area median income (AMI) in Cuyahoga County with up to 10% of the purchase price, up to $14,900. Homebuyers must complete homeownership classes as a condition of closing their loan and must not have owned a home in the past three years.
- The Mayor’s Neighborhood Transformation Initiative provides up to $20,000 for any interested buyer in the Glenville-Circle North neighborhood. Buyers earning up to 120% AMI must provide 3% of the purchase price for the down payment, while those earning over 120% AMI must provide 5%. The loan is a deferred second mortgage that is forgiven once the buyer lives in the home for five years.
- Home Repair Loans: CHN offers home repair loans up to $20,000 to help homeowners complete health and safety repairs. These loans have no loan-to-value requirement and are available to those earning up to 120% AMI. They are forgiven after five years if the owner lives in the home for that period. Funds are commonly used for roofs, driveways, basements, and heating and plumbing systems. In 2021, CHN was able to help 84 families with this program While oversubscribed for the moment, CHN is currently working to expand the program’s capacity.
- Lead Safe Home Fund: CHN manages a Lead Safe Home Fund on behalf of the Lead Safe Cleveland Coalition. As administrator of the fund, CHN distributes loans, grants and incentives to landlords alongside construction management services. The goal of the fund is to help property owners comply with the Lead Safe Cleveland ordinance and help make Cleveland neighborhoods lead safe for children and families. In 2021, CHN helped 55 landlords receive lead clearance through this program.
- Middle neighborhoods: In 2021, CHN was selected to administer the City of Cleveland’s Middle Neighborhoods Initiative loan pool, which will help residents buy and renovate homes in neighborhoods like Lee-Harvard, Collinwood and Old Brooklyn. This influx of resources will help preemptively stabilize neighborhoods at risk of disinvestment. Lending is expected to begin in Fall 2022.
Beyond lending products, CHN Housing Capital provides homebuyer and financial education to CHN’s Lease Purchase families through the Family Success Program. Family Success is a complete, coordinated continuum of counseling and engagement that helps families achieve and maintain housing stability, accumulate wealth and build assets for themselves and future generations. Since its inception in 2014, 696 families have reduced over $1.6 million in derogatory debt, improved credit by an average of 51 points and accessed 1,016 mainstream financial products and services.