IFF BelowMarket Rate Financing and Facility Planning Services

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IFF Below-Market Rate Financing and Facility
Planning ServicesState of Illinois
Neighborhood Stabilization Program

• April 1, 2009

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Welcome to IFF
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What We Do
Real Estate Services
Loan Program

• Affordable facilities planning and project
  management
• Effective community development
• Available in Chicago metro area

• Accessible capital for nonprofits
• Tailored solutions for community facilities
• 5-year to 15-year loans
• Financing from 10,000 to 1.5 million

Research

• Community investment analysis
• Nonprofit financial health studies

Well placed, well planned, well designed, well
financed. Its not an ideal. Its what should
be. - Trinita Logue, President, IFF
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Who We Are

• Founded in 1988, 501(c)(3)
• Community development financial institution
  (CDFI) with over 145 million in assets
• Operates in Illinois, Indiana, Iowa, Missouri and
  Wisconsin
• Nonprofits serving low-income or special-needs
  communities
• Lending impact
• 665 loans
• 350 borrowers
• 210M loan principle
• Real estate services impact
• 260 consulting and development projects for
  nonprofits
• 1.2 million s.f. real estate developed
• 139M project development costs

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Our Nonprofit Customers

• Affordable and supportive housing
• Early childhood care and education
• Multi-service agencies
• Education (charter, choice and private schools)
• Health care (FQHCs and CHCs)
• Special needs providers
• Youth, adult, senior services
• Homeless services
• Community development
• Faith-based (projects targeting above sectors)

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IFF Loan Program

• Land and building acquisition
• Renovation and new construction
• Facility maintenance and repairs
• Equipment and furnishings
• Service-oriented vehicles
• Plus
• Replace adjustable rate mortgages with IFF fully
  amortized loans
• Refinance long-term debt in certain circumstances
• Finance leasehold improvements (max. termlength
  of lease)

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Typical Borrower

• 501(c)(3)
• At least five years of operating history
• At least three years of audited financial history
• Budget at least 250,000

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Program Objectives for Borrowers

• No fees, reduced closing costs, and below-market
  rates save agencies money.
• Long term loans allow agencies to carry
  affordable monthly debt without worry of
  refinancing or balloon payments.
• Cash is preserved through a minimal equity
  contribution to project costs.
• Equity is built more quickly leading to stronger
  balance sheets.

Interest rate calculation for IFF loan
Comparable tenor Treasury rate 175 bps Interest
rate calculation for Balloons 5-yr Treasury rate
300 bps
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Loan Rates

• Rates
• Fixed in five-year increments
• Priced to remaining term
• Priced at 1.75 over same-term U.S. Treasury
  note, with a floor
• 5-year floor 5.0
• 10-year floor 5.5
• 15-year floor 5.875

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Loan Terms

• Terms
• 10,000 to 1.5 million per project
• Finance up to 95 percent of project costs
• No appraisal required
• Terms from five (5) to fifteen (15) years
• No points and no fees
• No prepayment penalties
• IFF pays first 1,500 of its legal fees

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Other Loan Features

• Other Features
• Second position financing available
• Construction-to-permanent loans in a single
  transaction
• No personal guarantees or credit scores required
• Loan approval meetings 3x/month

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ARC of Illinois IFF Borrowers

• Organization Project Type Loan Amount
• Aspire of Illinois Equipment 123,000
• Community Support Services Equipment 71,250
• DayOneNetwork, Inc. Acquisition and New
  Construction 310,000
• Garden Center Services Rehab of Owned Property
  142,500
• Garden Center Services Equipment 47,500
• Glenkirk Rehab of Owned Property 156,175
• Oak Leyden Developmental Services,
  Inc Equipment 100,000
• Options and Advocacy of McHenry
  County Acquisition Only 775,000
• Pathway Services Unlimited, Inc. Acquisition and
  New Construction 340,000
• Seguin Services, Inc. Refinancing 100,000
• South Chicago Parents Friends of Retarded
  Children Rehab of Owned Property 343,000
• Streator Unlimited, Incorporated Refinancing
  522,700
• Streator Unlimited, Incorporated Refinancing
  566,000
• 3,597,125

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Real Estate Consulting Services

• Evaluate and identify space needs
• Lease versus buy analysis
• Project budgeting
• Project feasibility studies
• Facilities master plans
• Preparation of development budgets and other
  materials needed to secure stimulus funds
• Manage facility construction or renovation
• Site evaluation (vs. site search with broker)
• Financing scenarios
• Development team selection
• Oversee design and construction

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Why Our Work is Different

• Lead time for projects
• Lack of knowledge of real estate issues among
  nonprofits
• Governance structure of nonprofits
• Size of projects
• Financial constraints among nonprofits
• Government funding and timing

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Benefits of Real Estate Consulting

• Affordable
• Below-market fees
• Not to exceed pricing
• Flexible
• Understand agencys space needs first, then
  identify best approach
• Tailor services directly to agencys needs
• Responsive
• Phased contracts
• We focus on real estate,
• so nonprofit agencies can focus on their mission.

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Research and Evaluation Program

• Provide hard data and expert analysis needed to
  make informed public policy and resource
  allocation decisions that affect the nonprofit
  sector.
• Qualitative or quantitative
• Local, regional or statewide
• Specific to a nonprofit sector or
  all-encompassing

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Resources on www.iff.org

• Technical assistance worksheets
• Assessing Your Organization's Program and
  Facilities Needs
• Projecting New Operations and Monthly Cash Flow
• Paying for a Real Estate Project
• Selecting a Capital Campaign Consultant
• Determining How Much Your Organization Can Borrow
  
• Making a Facility Decision
• Approaching a Real Estate Project
• Creating a Project Development Budget
• Selecting a Project Manager
• Selecting an Architect
• Selecting a General Contractor
• Fundamentals of Purchasing Real Estate
• Projecting Your New Occupancy Budget
• Applying for Property Tax Exemption
• Publications and research reports
• Child care facility design guidelines,
• Studies on nonprofit financial health,

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Illinois NSP Allocation

• Housing and Economic Recovery Act of 2008 (HERA)
  provides 3.92 billion of funds nationally for
  this one-time Neighborhood Stabilization Program
  (NSP). Illinois has a statewide foreclosure rate
  of 5.1 based on HUD's calculations, and is a
  high risk foreclosure state overall.

Source Illinois Department of Human
Services www.dhs.state.il.us
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Illinois NSP Program Guidelines

• Illinois Department of Human Services (IDHS)
  seeks to fund proposals that will help
  neighborhoods and communities across the state
  retain property value and prevent further
  degeneration.
• Funds will be used to bring relief to
  neighborhoods devastated by the foreclosure
  crisis, provide affordable housing to homeowners
  and renters, and provide community-based
  supportive housing options for persons with
  disabilities.
• Proposals should include plans to provide
  affordable rental housing or homeownership
  opportunities for households earning up to 120
  of area median income.
• Proposal due date Monday, May 4, 2009

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Illinois NSP Program Guidelines

• Proposals will include one or more of the
  Eligible Activities
• NSP Home Buyer Program to purchase and
  rehabilitate foreclosed or abandoned homes and
  residential properties for sale
• NSP Rental Program to purchase and rehabilitate
  foreclosed or abandoned homes and residential
  properties for rent
• NSP Residential Financing Program to establish
  financing mechanisms to help low and moderate
  income households purchase foreclosed property or
  homes
• NSP Demolition Program to demolish blighted
  structures
• NSP Land Bank Program to establish land banks
  of foreclosed homes
• NSP Redevelopment of Demolished or Vacant
  Property Program to redevelop demolished or
  vacant property

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Illinois NSP IFFs Joint Approach

• Apply on behalf of nonprofit corporations seeking
  increased residential capacity to serve their
  clients, such as
• Persons with disabilities
• Children and youth in foster care
• Children and youth wards of state
• IFF would purchase and rehab foreclosed
  properties on behalf of nonprofits
• Economies of scale for more cost-effective rehab
• Less burdensome for nonprofits

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Illinois NSP IFFs 1-on-1 Approach

• Provide 1-on-1 assistance to nonprofits
• For organizations that wish to apply for their
  own allocation
• IFF can help organizations apply to one or
  various pools of funding
• IFF can help you make your case
• Feasibility analysis,
• Project scope,
• Project development budgets,
• and more

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Contact Information
IFF Main Office One North LaSalle Suite
700 Chicago, IL 60602 www.iff.org Toll free
[phone] Robin Toewe Assistant Director
of Business Development [phone] rtoewe_at_if
f.org Jacques Sandberg Director of IFF
Housing [phone] jsandberg_at_iff.org
IFF Central Region Office 100 SW Water
Street Peoria, IL 61602 Craig
Staley Director of Central Region
Lending [phone] CStaley_at_iff.org