The Austin Community Foundation has recently taken a bold step toward tackling the city's affordable housing crisis. To expedite the development of housing solutions for the homeless population, the foundation has boosted a new $15 million loan fund. The Housing Accelerator Loan Fund, as it's named, aims to provide low-interest loans to developers working on affordable and permanent supportive housing projects. Last week, the foundation confirmed that it has already allocated funds to two projects – handing out $2 million for the Cady Lofts development and $2.5 million for a Foundation Communities project on South Lamar Boulevard, according to Austin Monitor.
Seeking to address some of the challenges developers face, such as the slow disbursement of funds and the high costs of private financing, Mike Nellis, the foundation's CEO, highlighted the imperative need for flexible and affordable financing. "The idea was really to understand the landscape of affordable housing, in particular affordable housing financing, and understand where the gaps are," Nellis told the Austin Monitor.
Under the fund's terms, loans are projected to be repaid within a five-year window, though some may settle in as little as two years. This rapid recirculation of capital is expected to facilitate the construction of 850 housing units over the next five years, with the possibility of leveraging $280 million in construction if combined with other city funds. Moreover, the Austin Community Foundation has a strategy to swell the fund by an additional $10 million from philanthropic donors committed to the cause of improving the city's affordable housing landscape.
Sally Gaskin, president of SGI Ventures and the developer behind the Cady Lofts effort, acknowledged the profound impact of the fund's low-interest rate scheme. By sparing her company a hefty sum in borrowing expenses, the development of Cady Lofts is set to proceed unhampered. "Having that low-barrier loan coming from a mission-driven impact fund is just huge," Gaskin extolled in a statement to the Austin Monitor. With fewer financial hurdles, Gaskin anticipates that the lofts will reach completion at an accelerated pace compared to the longer timelines usually associated with securing municipal funding.
