In 2024, NeighborWorks Capital launched a new lending program to deploy low-cost, long-term capital to NeighborWorks organizations (NWOs) to empower them to expand their homeownership initiatives in communities of color. Wells Fargo provided $8.5MM for the launch of this program, and NWOs were selected for funding through a competitive invitation-only application process.
We received 18 applications from NWOs in 15 states, totaling over $17.5MM in funding requests and far exceeding the $8.5MM available. Ten NWOs were selected based on several factors, including their historical single-family production levels in communities of color, their demonstrated commitment to reducing the racial homeownership gap, the expected impact of the proposed activities, and the organization’s financial strength.
We are excited to share the stories of the first two loan recipients in this program, Atlanta Neighborhood Development Partnership and Affordable Homes of South Texas.
Atlanta Neighborhood Development Partnership (ANDP)
ANDP will use the $1,000,000 loan to expand its efforts to acquire, rehab and/or build new single-family homes for sale to low-to-moderate income buyers in communities of color. The funds will expand their capital pool used for home production in place of construction debt and will save the organization an average of $14,000 per home in borrowing and other costs. They also plan to use the funds to acquire homes from a large investor owner of single-family rental properties to create new affordable homeownership opportunities.
The organization plans to build and rehab 428 homes over the seven-year loan term, with 84% of homeowners from communities of color.Â
Their target geography is home to 600,000 households and 1.7 million residents, of whom 65% are Black, and one in three have an annual income of less than $35,000. Within the Atlanta Metro region, they primarily focus on Fulton, Cobb, Gwinnett, Clayton, and DeKalb Counties. Data indicates that 93% of their prior homebuyers are still in their homes today and those that have lived in their homes for five or more years have seen $135,000 in average wealth creation.
ANDP’s mission is to develop, finance, and advocate for affordable housing at scale that promotes racial equity and healthy communities where families thrive. From 2021 to 2023, they built and/or rehabbed an average of 46 homes annually and are one of the highest producers of single-family homes in the NeighborWorks network.
Affordable Homes of South Texas, Inc. (AHSTI)
AHSTI will use the $500,000 loan to support its homeownership production and preservation efforts. The funds will be used to acquire a parcel of land in Harlingen, TX from the local housing authority to develop 105 single-family homes. ASHTI will provide homeownership courses, first mortgages, and second mortgages that will be proportionally forgiven over a 15-year period.
AHSTI develops, finances, and advocates for affordable housing opportunities for low-income, working families who would otherwise not qualify for conventional home financing. They have a 48-year history of creating safe, affordable housing, providing affordable homes to over 4,600 families, with 242 units of housing built, rehabbed, and/or replaced from 2021 to 2023.
The Rio Grande Valley is AHSTI’s primary service area. Located just north of the U.S.–Mexico border and comprising predominantly Latino/Hispanic populations, the region faces significant challenges accessing affordable housing and achieving homeownership. With poverty rates well above the national average, traditional homeownership is inaccessible for many, particularly within communities of color and underserved regions.
There is a high demand for affordable and safe housing in the Rio Grande Valley area as many residents lack credit histories and face difficulties obtaining traditional mortgages. This limited access to financing is a major barrier to homeownership. The organization uses a unique system that includes homeownership classes and opportunities to repair credit. Their mortgage loan underwriting process focuses less on credit score, and more on other indicators such as rent, car loan, phone, and other bill payment history, as well as length of employment.
Affordable Homes of South Texas was previously awarded a loan from NeighborWorks Capital through a competitive application process for the Strategic Growth Fund loan program in 2016. We are proud to continue to partner with them in their mission to enhance the quality of life by providing affordable housing and related services to eligible families.Â
NeighborWorks Capital is pleased to support these organizations through our Homeownership for Communities of Color lending program and will continue to share the stories of loan recipients and their impactful work. We are grateful to be able to provide low-cost capital to leverage the outstanding work that the selected NeighborWorks organizations are doing to increase homeownership and build generational wealth in communities of color. Â
Thank you to Wells Fargo for their support in making this program possible. Due to the high volume of applications and strong demand for this program, we are currently working to secure additional capital to support even more NWOs in their work and look forward to sharing more news about those efforts soon!
