Strategic Growth Fund Loan Helps HPI Preserve Single-Family Availability in Louisville

This loan will help HPI have an immediate impact in stabilizing homes and preparing them for affordable homeownership opportunities while rental income will cover the carrying costs of holding the property throughout the term of the loan. 
HPI

We worked with long-term partner The Housing Partnership, Inc. (HPI) on a $1.5 million Strategic Growth Fund Enterprise loan to provide acquisition funding and working capital for 81 single-family homes up to 60% AMI ($42,900 for a family of four), predominantly on census blocks with 40% or higher home ownership rates, as part of the Beyond Ninth Initiative in Louisville, KY.

West Louisville has been hurt by disinvestment, redlining and poverty. As a result, West Louisville is now home to some of the city’s poorest neighborhoods.

This loan will help HPI have an immediate impact in stabilizing homes and preparing them for affordable homeownership opportunities while rental income will cover the carrying costs of holding the property throughout the term of the loan. 

“Taking homes out of investor’s hands and turning them into homeownership units at scale using a strategic data driven plan will increase homeownership rates and create neighborhood stability,” said Andrew Hawes, HPI’s President and CEO. “The residents in the community will be able to achieve immediate savings in their monthly housing costs and obtain a wealth-building asset. Over years of sustained homeownership conversions, the neighborhoods will begin to heal.”

We worked closely with HPI, traveling to visit them in Louisville twice, touring the site, and staying in contact over the phone often. This is our second loan to them.

“As the project morphed over time, we stayed in contact often to work with them on creating a loan that would fit their needs,” said Emily Dorfman, Senior Loan Officer. “This project was unique because it was for for-sale homes, which we’d like to invest in more.”  

“HPI has great appreciation for NeighborWorks Capital and its staff. It is rare to work with lenders that look beyond the loan and to the organization’s mission. NC has been supportive of our plan and has been patient with us as we worked through our acquisition. HPI looks forward to reporting its outcomes in the years ahead,” Hawes said.  

The homes will be renovated and leased or sold to low-income families. HPI plans to invest $20,000 - $50,000 in renovations per home, to ensure future buyers will not be faced with expensive capital repairs early in their homeownership experience. The revenue generated from this program will be reinvested to support the acquisition and renovation of additional properties in the Beyond Ninth neighborhood through the 5-year term of NC’s loan. HPI is leading the Beyond Ninth Initiative, which focuses on the revitalization of three neighborhoods—Russell, Shawnee, and Portland—in west Louisville to reduce blight and increase homeownership. In 2007, HPI’s board wanted to address the growing number of vacant and abandoned properties in Louisville’s west end. Due to the market down turn in 2008, HPI had to delay the launch of this important initiative until 2016.  The Beyond Ninth Initiative seeks to expand redevelopment beyond Ninth Street, the historic dividing line separating the City's central business district from its historically African American "West End" neighborhoods.

HPI has also developed an innovative partnership with HUD to provide low-cost financing (FHA 203(b) and 203(k) programs) for the renovation of the properties which will increase the number of homes available to low-income families.

 

About HPI

HPI is a non-profit real estate development organization based in Louisville, KY, that creates affordable housing opportunities to encourage family stability and support and empower its community. HPI provides a wide range of services, from consulting with developers on new developments to helping residents working toward financial stability. HPI offers a number of community services, including Home Buyer Education, Foreclosure Intervention, Housing Programs, Real Estate Development, Resident Programs and Property Management. They have invested in nearly 9,400 affordable homes and apartments, including building some of the first EnergyStar-rated multifamily buildings in Kentucky. HPI has helped over 1,200 families avoid foreclosure and keep their homes. They have and have created more than 5,800 local jobs, including construction.