Neighborhood Housing Services of Chicago announced the launch of its Participation, Sale and Servicing Agreement (PSSA) capital raise of $50 million.
The PSSA, also known as the Loan Pool, provides an innovative structure to help financial institutions meet Community Reinvestment Act (CRA) requirements in communities where the demand for credit cannot be met.
“NHS has developed a leadership position in directly and effectively helping those who want to buy, fix and keep their homes,” said Kristin Faust, NHS President. “We are proud of our work in building stable and healthy neighborhoods, and with the cooperation of financial institutions, we can do even more to counter rampant disinvestment,” she added.
Established in 1987, Neighborhood Lending Services (NLS), the lending affiliate of Neighborhood Housing Services of Chicago (NHS), provides mortgage lending to new and existing homeowners in low-to moderate-income communities throughout the greater Chicagoland area, with a particular focus on economically distressed neighborhoods on the south and west sides of the city, where capital is severely lacking.
The average loan size in NHS target communities is typically under $185,000, resulting in NLS being one of the primary lenders available to homebuyers in these communities. NLS is able to finance both the purchase and rehabilitation of these properties, allowing borrowers to build wealth, enhance the physical condition of the neighborhood, and ultimately help to attract additional private investment to these areas.
“Adjacent communities also benefit from their proximity to strong anchor communities and this is how we work as catalysts for community revitalization and renewal,” Faust noted.
The shared-risk investment offers a reasonable return for investing financial institutions while expanding lending in communities that continue to experience low property values, which limits mortgage lending and often keeps conventional lenders on the sidelines.
This year, 2019, marks the seventh time in 17 years that NHS has embarked on the Loan Pool capital raise resulting in more than $244 million in residential mortgages loaned. NHS is committed to this capital raise as part of our strategic goal of becoming the country’s largest single-family CDFI lender.
About Post Author
