F.R. Bigelow and the Saint Paul Foundation Partnership Invests $2 Million and Creates New Opportunities for Affordable Homes in the East Metro

F.R. Bigelow and the Saint Paul Foundation Partnership Invests $2 Million and Creates New Opportunities for Affordable Homes in the East Metro

Group News posted in on 1 December 2017| comments
audience: The Saint Paul Foundation, Minnesota Community Foundation | last updated: 1 December 2017
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Summary

Renters and homebuyers benefit from new funding models

F. R. Bigelow Foundation and The Saint Paul Foundation today announced a major partnership to address the rapidly growing affordable housing challenge in the East Metro. The Foundations have funded CommonBond Communities and Twin Cities Habitat for Humanity with program related investments of $1 million each to ensure that all East Metro residents are on equal footing in their search for a place to call home. F. R. Bigelow Foundation will also make additional grants to each organization to support program expansion and organizational capacity.

F. R. Bigelow Foundation will take advantage of Program-Related Investments (PRIs) to support rental equity and home ownership in the East Metro. PRIs allow foundations to move beyond traditional grantmaking and can take the form of loans, equity investments, guarantees and other fiscal resources. PRIs are advantageous for foundations and nonprofits. Foundations have the ability to advance their program goals while leveraging modest financial gains to reinvest into the community, while nonprofits receive an influx of funding with interest rates well below market rate.

With demands for affordable housing increasing and the supply decreasing, innovative funding methods to support housing access are critical. “The need to preserve low-to-moderate income housing is increasingly urgent in the Twin Cities metropolitan region,” says Ann Mulholland, vice president of Community Impact for The Saint Paul & Minnesota Community Foundations. “PRIs are an effective tool to help preserve and expand affordability. Access to affordable housing is critical to individual and family economic well-being, and helps stabilize communities.”

F. R. Bigelow Foundation, in partnership with The Saint Paul Foundation, will loan $1 million to CommonBond to support its CommonBond Housing Opportunity Fund. The fund is used to purchase existing, unsubsidized affordable rental properties to market to families and individuals whose earnings exceed government subsidy housing qualifications, but who are often priced out of many markets due to increasing rental costs. This fund specifically targets rental access for the currently underserved families and individuals earning $33,000 to $48,000 per year. The F. R. Bigelow Foundation will provide additional grant support for program expansion.

The Foundations will also loan $1 million to Twin Cities Habitat for Humanity’s affordable homeownership program and Home Loan Impact Fund – programs that allow Habitat to redevelop homes as well as purchase homes from the open market for rehabilitation. Habitat can then make these homes available to low-income homebuyers. This new funding will allow Habitat to increase the number of prospective homeowners they serve from 180 to 500 by the year 2020. As derived from current applications, 90 percent of these homebuyers will be from communities of color. F. R. Bigelow Foundation will also make a grant to support the organizational capacity of the nonprofit related to this significant expansion.

Private foundations are required by law to disperse five percent of their assets into the community annually. Using PRIs to distribute a portion of those funds uniquely positions F. R. Bigelow Foundation to provide the capital for CommonBond and Twin Cities Habitat for Humanity to address a pressing community need while making modest financial gains on the principal. Those gains are set to be reinvested into the community.

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Contact

The Saint Paul Foundation
101 Fifth Street East Suite 2400
Saint Paul, MN 55101
United States
Phone: 1 651-224-5463
Fax: 1 651-224-9502

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