Financing opportunities and federal funds are available to multifamily if you just know where to look
Illinois Sen. Everett Dirksen, perhaps the last great Congressional orator, didn’t like spending the peoples’ money. To make his point he once said: “A billion here, a billion there, pretty soon it begins to add up to real money.”
That quip has become synonymous with government overspending. When it comes to multifamily housing, though, most providers don’t think Uncle Sam spends enough. But it turns out there is an appreciable amount of federal money going into apartment development that people just don’t know about.
Indeed, you can stick a shovel in the ground just about anywhere and you’ll find the federal government involved in multifamily and home lending. What we’re talking about here is the Community Development Financial Institutions Fund, a program better known for incentivizing business lending.
But the main CDFI fund operates several smaller, targeted programs, including a Capital Magnets Fund that financed almost a quarter of a billion dollars worth of multifamily housing during the six-year period from 2016 to 2021.
According to the Fund’s website, recipients used $246.6 million in CMF funds to finance or support 37,650 rental units. Indeed, the multifamily sector handily outpaced the fund’s home ownership component, which came to just 5,500 units and $37.2 million in disbursements.
The Opportunity Finance Network, a financial intermediary that has a coalition of 400 CDFI’s throughout the country, has reported significant real estate activity along with business lending by its members. The OFN touts its own intermediary multi-family and home mortgage programs in addition to aiding business lending.
OFN lending
The Opportunity Finance Network, a coalition of more than 1,400 CDFIs throughout the country, has reported significant real estate activity along with business lending. The OFN touts its own multifamily and home mortgage programs in addition to its business lending.
“Through 2022, OFN member CDFIs have helped support the development or rehabilitation of nearly 2.4 million affordable housing units nationwide. And CDFIs nationwide have financed $2 billion annually in mortgages,” the Network claims. The investments help develop affordable and desirable rental homes throughout the nation as well as in Puerto Rico and the U.S. Virgin Islands.
Here are a few examples of apartment deals using OFN money:
- The Florida Community Loan Fund provided financing for the Fort Lauderdale Community Development Corp. in both 2015 and 2020 to sustain and rehabilitate 37 multifamily affordable rentals and a single-family affordable home.
- CDFI Pathway Lending of Nashville helped Catfish Moving Co. to find office and multifamily space in the Music City.
- In Maine, the Caleb Group turned to the Genesis Community Loan Fund, a local CDFI, for a $1 million construction loan in January 2019 to purchase and preserve multifamily units. In this case, the deal involved Norway Savings and was supported by a Federal Home Loan Bank of Boston grant and an investment from Bath Savings Institution.
Looking for more information or a support network on the investing side of rental properties?
Check out BiggerPockets! They provide resources and tools to help people learn about real estate investing and build wealth through rental properties. Their website offers a community of over 2 million members, educational content, networking capabilities, and software tools. BiggerPockets also publishes books and podcasts about real estate investing.
Looking to the future
The Citizen Potawatomi Community Development Corp. in Shawnee, Okla., hasn’t done any CDFI multifamily transactions just yet. But Executive Director Cindy Logsdon says that “doesn’t mean we couldn’t in the future.”
Her fund has looked into one deal that had retail on the first floor and rental housing on the upper floors before ultimately passing on it.
But Citizens Potawatomi has used CDFI Bond Guaranty money to build an industrial park. According to Logsdon: “if several large manufacturers came into the industrial park, they could create 1,000 jobs,” creating an opportunity for multifamily. After all, business lending is the CDFI’s forte and in recent years it has expanded into residential mortgages.
Similarly, Uncle Sam’s New Markets Tax Credit Program was designed to emulate, on the business side, the Low Income Housing Tax Credit, which has financed multifamily housing for more than 30 years and is earmarked in the current budget for a significant increase in funding.
Even with its business orientation, the NMTC has still managed to fund more than $28 billion of real estate since its inception in 2000. And while rental housing doesn’t qualify directly for an NMTC award, savvy developers and lawyers have found a workaround that makes it an essential tool for mixed-use multifamily. They do so by using the tax credit to finance the retail component on the lower levels and build apartments above, utilizing separate financing structures to do so.
One such development, the Sibley Building in Rochester, N.Y., has 10 different condominium-style regimes, including three housing-related ones for senior, market rate and workforce/affordable housing. While this particular deal didn’t use the NMTC to develop the retail in the million square feet of space in the building, there are plenty that have.
For example, the Corporation for Supportive Housing of New York City received a $50 million allocation in a NMTC round a couple of years back. Its plans were to invest in homes that served low-income, high-health-need people who were homeless or at risk of homelessness or who resided in supportive housing.
Tapping the NMTC
CSH has received a number of NMTC allocations over the years. One transaction actually tapped funds from both the NMTC and the low-income housing tax credit for its Blackburn Building in Portland, Ore.
The project had a $15 NMTC million allocation to Central City Concern for a 51,000-square-foot health facility. The LIHTC component went towards 124 units of single-room occupancy and studio units.
On the Native American multifamily side, Native CDFIs are starting to tap both federal programs. The Native American Bank of Denver (which is also a Native CDFI) received a $50 NMTC million allocation in 2023 and McKinley Asset Growth Management of Alaska, also a Native CDFI, has received more than $100 million in several allocations.
While neither of the NMTC and LIHTC tax credits are in the billion dollar range, taken collectively, they have a lot of heft. And a billion here and a billion there… well, you know the rest.
Source: Multi-Housing News
Did you enjoy this article?
This is an example of what is included on our FREE weekly newsletter, Landlord Weekly.
Subscribers get access to our free forms, email templates, and guides! As well as…
▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links
To check out a sample of our newsletter, click one of the links below👇
By Tom Scalisi
Wildfires are dangerous and destructive. Following these tactics and tips can help safeguard your home—and your family.
The damage caused by wildfires can be absolutely devastating. According to a 2020 study by the nonprofit research group Headwater Economics, wildfires destroyed nearly 89,000 structures between 2005 to 2020. Worse yet, 62 percent of the losses occurred in 2017, 2018, and 2020 alone.
While wildfires might seem unstoppable (and in many ways, they are), there are ways to protect your property from fire damage. With the right information and a proactive approach, anyone can take steps toward safeguarding their homes.
Clear Brush and Dead Vegetation
In some parts of the world, wildfires also are known as brush fires because they feed on the dead brush, vegetation, and trees in drier regions. One way to slow a wildfire’s approach is to keep the property clear of those combustible materials. Cutting down dead trees as well as removing dead brush, grass, leaves, and other debris will provide less fuel for a wildfire, slowing its approach across the property.
Create a Defensible Zone
Creating a defensible zone around your property is one of the best strategies to lessen a home’s risk during a wildfire. This zone includes everything within a 100-foot radius of the house, and it’s best to break the property into smaller, manageable zones:
- Zone 1 includes 0 to 5 feet from the house. Remove combustible outdoor furniture, fences, and storage under decks from this area. Also, use hardscape and concrete to create fuel breaks. Be sure to remove any dead plants and keep the plants in this zone irrigated.
- Zone 2 covers the area 5 to 30 feet from the house. Remove dead brush, maintain 18 feet of space between tree crowns, and plant trees and vegetation in small clusters.
- Zone 3 includes 30 to 100 feet out, and it’s important to keep these trees trimmed and the zone free of brush as well. Also, remove any small evergreen trees growing between mature trees, as they’re full of combustible pitch.
The National Fire Protection Association (NFPA) publishes a guide to defensible zones that contains additional useful information on the topic.
Protect Your Roof
Since flying embers from wildfires are often the causes of structure fires, protecting the roof is key. Using Class A-rated shingles will help to lessen the chances that an ember landing on the roof causes a fire.
The good news is that your roof might already be Class A-rated; most asphalt shingles are Class A-rated, and all metal roofing is Class A-rated. While these shingles won’t fireproof the home, they offer protection for its most vulnerable surface.
Your Landlord Resource has teamed up with Toggle, a division of Farmers Insurance that offers competitive pricing of renters insurance for tenants.
Policies can start as low as $5 a month!
Copy and share our link with your tenants to get them started: http://go.gettoggle.com/SH1E
Download this PDF to present to your tenants with your renters insurance request! Toggle Renters Insurance Flier.pdf
Keep Embers Out of Vents and Windows
Flying embers are just as likely to float into open windows, cracks in vents, and open eaves. If the threat of a wildfire approaches, it’s important to safeguard these areas from danger. Sealing off attic vents and windows with ⅛-inch metal screening will prevent embers from floating in while still allowing airflow. As for exposed rafter tails and open eaves, it’s best to box them in even though it will affect the aesthetics of the home.
If a fire approaches and you are told to leave or feel threatened, be sure to close all windows and doors and leave them unlocked. If you have time, remove flammable window coverings and move flammable furniture away from windows and doors.
Work With Your Neighbors
You can take all the precautions in the world to protect your property from wildfires, but if you live in a densely populated area, your home is only as safe as your neighbors’ homes. Work with your neighbors to create safer yards and ultimately a safer neighborhood by following these protocols on their properties as well.
Prepare Your Escape Route
If you’re told to evacuate, ignoring the evacuation order and staying at home puts you, your family, and the crews responding to the fire at unnecessary risk. Instead, prepare an escape route. Keep your vehicle full of fuel and prepare a bag with some necessities. Also, know a few different ways out of your neighborhood to ensure you can escape regardless of the fire’s direction.
The smoke from nearby wildfires can reach across several states and affect air quality. Consider purchasing an air purifier before a local or regional wildfire starts to ensure your breathing air is safe while at home and when you return after evacuating.
Did you enjoy this article?
This is an example of what is included on our FREE weekly newsletter, Landlord Weekly.
Subscribers get access to our free forms, email templates, and guides! As well as…
▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links
To check out a sample of our newsletter, click one of the links below👇
Many single-family rental investors look beyond their local market to diversify their portfolios and benefit from market variety. When these out-of-state investors start, the first thing they do is research the market. They look at financing, data on home sales, rental demand, price points, local industry, job market health, etc.
Up to a certain point, the properties themselves don’t matter. After all, it’s not a personal residence. You don’t need it to suit your tastes.
At the same time, certain things about the investment properties you buy matter—a lot. As you navigate the world of single-family investing, focus on these five essential elements of due diligence.
1. An Excellent Turnkey Provider
If you’re buying remotely, you’ll need a turnkey partner. The definition of “turnkey” varies, so you’ll want to thoroughly investigate exactly what’s being offered versus not. Ideally, you’re looking for a company that owns and invests in the properties they’re selling. They’re not middlemen. They are just there to broker a deal. They should have experience, well-developed operations, and in-house or highly trusted partners for property management and renovations.
Ask hard questions. Do your homework. Know their mindset and philosophy. And most importantly, know what you want and need so that you can choose a partner that aligns with your vision.
2. A Clean Inspection
We can’t stress this enough: No matter what property you buy or who you buy it from, get your own inspection. Remember, turnkey might mean something different to everyone. Problems you consider big might not be significant to the seller or turnkey provider.
It’s worth repeating: Get your own inspections done. Never waive them. You may want to go above and beyond for peace of mind—get the crawl space looked at and ensure your pain points are addressed.
Remember, you’re not likely going to be there for any final walk-throughs or see things for yourself in person. You need trusted eyes and ears on the ground.
We have been partners with TurboTenant for a while now. We love them for newer rental property owners because many of their services are FREE. These would be expenses that a lot of landlords do not include in their budget, like some of the costs associated with finding a new tenant.
Advertising your rental property is completely free and goes out to dozens of rental sites like Rent.com, Apartments.com, Redfin, Craigslist, and many more! So, create one ad and TurboTenant gets it out to all those sites…for FREE.
They handle tenant applications and screening, also no cost to the landlord. They have an option where you can have the tenant pay for this service, so you never have to handle reporting or recording the receipt of these fees.
Collecting rent is always FREE for landlords! Only tenants will pay if they choose to use a credit card for payment. Otherwise, ACH (our recommended method) is no charge.
Upgrade to a premium account and they provide unlimited personalized leases for less than $10 per month ($8.25). This is HUGE for DIY rental property owners! Regardless of the state where your property is located, you are covered by state specific leases and addendums. Rather use them on an as needed basis? Custom leases are $29 each.
Manage your rentals and organize your documents all in one place. Efficiency is key and you will be able to streamline your rental property business with features such as in app messaging with tenants, handle maintenance requests, plus upload and store their rental insurance information. Available for the premium upgrade noted above ($8.25 per month).
If you are looking for a straightforward, easy to navigate, and low-cost option to help you manage your rental properties, look no farther. TurboTenant is our go to recommendation of property management software for newer landlords or for ones that presently only own a few doors.
3. Minimized Inconvenience
In addition to considering what your ideal residents want, consider what they don’t want. We’ve all seen properties that are just…off. Weird layouts, outdated design choices, quirky features—while these might be things someone likes, most people won’t.
You want to focus on ergonomic, appealing, and convenient properties. If they aren’t presently like this, what renovations would it take to get it there?
Sometimes it’s hard to see how inconvenient or frustrating a property can be until you’ve lived there for a while. That isn’t an option in this case, so anticipate needs and pain points. Listen to feedback as you go and seek out solutions. The more user-friendly a property, the less likely residents will have a reason to leave at the end of their lease.
4. Key Location
Location matters in both a broad and a specific sense. It’s the one thing you can’t change about a property. Be strategic. An imperfect house can be improved over time if the location is ideal.
At the same time, a perfect property in a poor location may have trouble staying occupied. Be mindful of the specifics.
5. Attention to Detail
You’re investing from a distance. Sometimes, it’s hard to know all the details, let alone focus on them. This is where your turnkey partner and property management team come into play. From the very beginning, you should only be with partners you trust to uphold a standard of excellence you can sign off on. They’re the ones who will see things and fix things—or not.
Sloppy renovations and corner-cutting maintenance efforts aren’t good enough. Leave your property in the hands of people who value quality from every angle. No investment property will be perfect—but they can get close! Choose stewards who show pride in their work and value your investment.
Provided by REI Nation
Did you enjoy this article?
This is an example of what is included on our FREE weekly newsletter, Landlord Weekly.
Subscribers get access to our free forms, email templates, and guides! As well as…
▪️Landlord Tips ▪️ Early Access to Our Blogs ▪️ Landlord Specific Articles by Other Industry Pro’s ▪️ Podcast Links
To check out a sample of our newsletter, click one of the links below👇