Under an innovative partnership, CBC Mortgage Agency (CBCMA) is using its web-based marketplace for second mortgage loans to help Habitat for Humanity affiliates generate funds to build homes for families in need.
The unique collaboration involves the sale of loans held by Habitat on the mortgage agency's CRA Note Exchange. The online exchange facilitates the sale of first and second mortgage loans to lenders and banks seeking to meet their Community Reinvestment Act goals.
Launched as a portal for CBCMA to sell its own down payment assistance loans, the exchange now offers purpose-driven entities the chance to gain liquidity for their paper as well, and has recorded more than 4,000 sales to date. By the first week of August, roughly $2 million in home loans formerly held by eight Habitat affiliates had been sold, and additional loans valued at more than $2 million were listed for sale on the exchange.
"We're delighted to help advance Habitat for Humanity's success because we share the organization's mission of enabling people to achieve homeownership and enjoy its powerful benefits," said Richard Ferguson, CBCMA's president. "The CRA Note Exchange is the ideal vehicle for helping affiliates gain the liquidity they need to do more of what they do best – build and renovate homes for families."
Under the partnership, CBCMA officials act as facilitators for the sale of loans by Habitat affiliates by preparing loan files for compliance; loan pricing; listing loans on the exchange; identifying potential buyers; and helping with documents and other requirements related to the loan sale.
Leaders at Habitat for Humanity affiliates called the opportunity to resell the loans they carry for homeowners a godsend. Tracyann Reynolds, chief executive officer at the Habitat for Humanity affiliate in rural Stephenson County, IL, said her affiliate has struggled to raise funds and faced the prospect of closing.
"We are in a rural area, and we've lost a lot of businesses in recent years. So it's very difficult to get materials and even labor donated to complete our projects," Reynolds said. "This opportunity [with CBCMA] has been our saving grace, because it creates the cash we need to move forward."
Typically, Habitat affiliates provide loans to the families it serves, and then collects payments on the mortgages, with no interest. Reynolds said that by selling four of those loans on the CRA Note Exchange, her affiliate now has enough funds to begin its next project.
"To put a family into a home – to give them that hand up and provide them with that stability and peace of mind that go along with homeownership – it's an amazing thing," Reynolds said. "Now we can do that for more families."
CBCMA provides down payment assistance to creditworthy buyers through its Chenoa Fund program, and has helped more than 15,000 people achieve the dream of homeownership. In addition to the Habitat for Humanity project, the agency recently invested $1 million in the Workforce Housing Opportunity Fund, which rehabilitates and develops affordable and workforce housing in communities where gentrification and soaring rents have priced out many lower-income families.
Under another collaboration, CBCMA provided $3 million in financing for CityVision Homes, an urban renewal effort that renovates blighted houses and sells them to veterans, law enforcement personnel, and people with low and moderate incomes.