Several local nonprofits will receive a loan to help increase affordable housing options in northwestern Connecticut.
The Litchfield County Center for Housing Opportunity (LCCHO) and the Foundation for Community Health (FCH) are offering a revolving loan program to help housing nonprofits improve or construct affordable housing.
One of the hopes is that the program encourages nonprofits to view the affordable housing crisis as manageable, according to Natashea Winters, Foundation for Community Health’s director of Programs and Learning.
“It can feel really big and daunting and feel like, as small communities, that it's not something that we can fix,” Winters said. “My hope is that this program provides an example of something that we can do and how it is something that is in our control.”
The loans, which have a 3% interest rate, will be used toward the purchase of property to create affordable housing. As a revolving loan program, loan payments will flow back into the program and be available to loan again, Winters said.
“Reasonable properties do come to market, and we hope that the housing nonprofits can feel empowered, that they can be competitive in the marketplace, when those opportunities do arise, and this loan program is a small part of that,” Winters said.
Local housing nonprofits are eligible for the loans, of up to $1 million, to go toward developing or improving affordable housing. Cost is often a burden to constructing new affordable housing, according to housing advocates.
There are 10 eligible nonprofits in the region that can apply, all of which are volunteer-run, Winters said.
FCH offered to provide $2 million for the revolving loan for a period of six years, LCCHO Director Jocelyn Ayer said. Since FCH only works with nine of Litchfield County’s communities, other community groups are sought.
“We would love to expand with another funder, the service area of this kind of acquisition loan fund,” Ayer said. “For now it will certainly be open and available for the time period Foundation for Community Health is willing to provide this funding.”
Ayer hopes the program will be able to provide funding for nonprofits within 45 days, allowing them to be competitive in the open market.
One of those nonprofits, Kent Affordable Housing, recently encountered a situation in which the revolving loan program would’ve helped pave the way for more affordable housing, according to Kent Affordable Housing President Justin Potter.
“A property came onto the market and it was a multifamily property that would have been a good fit for affordable housing,” Potter said. “We put in an offer for it. But our financing required 90 days for us before closing. There was a competing offer that could get the commitment much quicker, so we lost that property.”
The revolving loan will enable the organizations to be more competitive in property purchasing. Kent Affordable Housing plans to take advantage of the loan program and eventually apply, Potter said.
“We’d get the funding so we could close more quickly and sort of compete with folks in the private market, so I'm thrilled that this got set up,” Potter said.
