Investors & Funders: Regional Investor Consortium

IFF recently celebrated the expansion of its Investor Consortium from Illinois to its entire five-state region with the sale of $10 million in collateral trust notes.

The Investor Consortium is an attractive option for banks that want to expand or diversify their Community Reinvestment Act (CRA) eligible activities.  It allows them to invest in and own a diverse portfolio of loans to low-income communities; to benefit from IFF’s expertise and track record in underwriting and managing such loans; and the flexibility to count these loans as either CRA-eligible investment or lending. 

“The regional expansion of IFF’s Investor Consortium confirms that it offers financial institutions a high-quality, high-impact investment opportunity,” said IFF CEO Joe Neri.  “And we thank our partner banks who have helped to make it such a success.”

Since 2004, the Investor Consortium has generated $113 million in total capital to support IFF’s lending. 

Energy Efficiency: E2P

IFF recently completed the audit phase of E2P, its energy efficiency program for nonprofit facilities.  E2P is designed to identify facilities in need of energy efficiency upgrades, perform audits on those facilities, and recommend improvements that will reduce energy use by up to 25 percent, with a payback period of less than 10 years.  An important feature of E2P is the bundling of multiple, smaller facilities into a single project that is large enough to maximize the benefits of Energy Performance Contracting.

IFF offers nonprofits a complete package of energy efficiency services, including the provision of below-market rate loans to make suggested upgrades. IFF's loan program allows E2P participants to use the projected energy savings to pay back the loan. In many cases, participants will realize immediate savings that they will use to pay off their loans.

IFF selected 14 projects in the Chicago area for E2P's first round: 11 schools and three community service centers, for a total of approximately 560,000 square feet. These projects will now move into implementation phase. Projects within Chicagoland are being sought for a second round of the program, which may expand geographically over the next couple of years. For more information on E2P, contact IFF at 866 629 0060.

Illinois: Heartland Housing Inc.

IFF customer Heartland Housing, Inc. was recently honored with the Polk Bros. Foundation Affordable Rental Housing Preservation Award at the Chicago Neighborhood Development Awards for their work in preserving Hollywood House Apartments in the Edgewater neighborhood of Chicago. When Heartland Housing sought to purchase the affordable senior housing complex in 2008, IFF provided a $350,000 predevelopment loan to help make the project a reality.

We are pleased to have been part of this successful preservation transaction, which also helped contribute to the broader efforts of The Preservation Compact, an initiative to preserve affordable rental housing throughout Cook County, Illinois.

Missouri: TouchPoint Autism, Inc.

TouchPoint Autism, Inc. serves people with autism and their families, including the independent residential services offered through its 31 group homes throughout Missouri. Last year, due to a drop in the appraised value of a commercial building that TouchPoint used for its programs, the agency had to restructure longstanding debt with its local bank. TouchPoint reached out to IFF for help. Using two group homes that were not sufficient collateral for other lenders, IFF was able to make a $300,000 loan to help TouchPoint reduce the balances on its existing loans, come into compliance with its bank’s loan-to-value requirements, and ultimately preserve its long-term banking relationship.

“IFF stepped in and provided us with financing for two properties in our Residential Program at a time when traditional lenders were reluctant to help.  As a result, we have been able to secure a more certain future for six of the people we serve with respect to their long-term housing needs.  [IFF] did a wonderful job of walking us through the application, approval and funding processes and made sure we received the funding we needed in a way that worked for us,” says Mike Abfall, CFO of TouchPoint Autism Services.

Public Policy: Surplus Milwaukee Public Schools Buildings

IFF staff members Heather Heaviland and Jose Cerda recently testified before the Wisconsin state legislature regarding Senate Bill 20 and Assembly Bill 37, companion bills to allow the City of Milwaukee to sell or lease surplus Milwaukee Public Schools (MPS) buildings.  If passed, this legislation would open the door for independent charter schools and private schools participating in the Milwaukee Parental Choice Program to be able to use these facilities.

Both Heaviland and Cerda referenced IFF's 2010 study, Choosing Performance: An Analysis of School Location and Performance in Milwaukee, in their testimony noting that at the time up to 79,000 more seats were needed to provide all of the city’s children with a seat in a performing school, and that two-thirds of that need was concentrated in just eight Milwaukee zip codes.

One IFF client, Lighthouse Academies of Wisconsin, decided to pull away from chartering with MPS in large part because they could not negotiate agreeable lease terms with the district.  With IFF’s help, they are now looking to purchase and renovate a private market facility, but their timeframe for opening a school was delayed a full year by the inability to secure an MPS facility.

As noted in IFF’s testimony, "Over one and a half million square feet of school space is currently sitting empty…for every square foot we can reuse, we can put money back in the classrooms."