Apr 08Mercy Housing Launches Innovative Funding Program to Multiply Impact
For Immediate Release: April 8, 2021
With the goal to develop and preserve 9,000 affordable homes by 2024, the nation’s leading affordable housing nonprofit creates an innovative funding tool to build more housing with services across America.
DENVER—Mercy Housing created the Gap Note Program to help meet the historic need for affordable housing that our country faces. The Covid-19 pandemic has taken a devastating toll on health and welfare in communities around the country, disproportionately impacting communities of color. The Gap Note Program will multiply Mercy Housing’s impact by providing critically needed low-cost, subordinate debt that will fill a financial gap in affordable housing developments. This program will magnify Mercy Housing’s work to provide stable affordable housing to households as they cope with the pandemic and economic fallout.
Mercy Housing recently reached its goal of creating a $45 million pool that will be used to accelerate its affordable housing production. To date, five investors have committed over $35 million dollars. PNC Bank and Truist Bank have made the largest commitments, with $15 million and $10 million respectively. Additional investors include CommonSpirit Health, Mercy Investment Services, and the Opus Foundation. Mercy Housing has also committed $10 million of its own capital over five years.
Even before the pandemic, the affordable housing supply for low-income renters was desperately inadequate. The National Low Income Housing Coalition (NLIHC) estimates that there’s an unmet need for over seven million affordable homes in the U.S. Between March and April of last year alone, more than 20 million workers lost their jobs, according to the Joint Center for Housing Studies of Harvard University, with BIPOC communities disproportionately affected.
“Mercy Housing is grateful for the support of these key partners. Their investments will leverage millions of dollars to build affordable homes for people who struggle to afford the high cost of housing, including those who have been affected by COVID and the economic downturn. We’re excited about our ability to better respond to this urgent need.” — Dee Walsh, Executive Vice President at Mercy Housing Inc.
The creation and financing of affordable housing is complex and requires capital from multiple sources, both public and private. Funding is competitive and there are far more worthy developments than resources, often leaving projects with a financial gap that can be a major barrier to the development of more quality affordable housing. Mercy Housing created the Gap Note Program in an effort to fill this gap, resulting in more housing for families, seniors, veterans, the formerly homeless, and people with special needs.
What’s extraordinary about the Gap Note Program is that it will provide low-cost, patient capital that will leverage private and public resources. The goal is to invest in approximately 25 projects over the next four years. The leverage of these dollars is approximately 25 to 1, with every $1 million investment making a $25 million project possible.
Mercy Housing’s underwriting, design standards, exceptional balance sheets, and strength of current deals inspired confidence with investors. Mercy Housing has nearly 40 years of experience funding, building, and managing affordable housing.
“At Truist our Purpose is to inspire and build better lives and communities, and helping to bridge our nation’s affordable housing supply gap – particularly during the pandemic – will help improve the lives of many hardworking families,” said Keitt King, head of Truist Community Capital. “We are grateful for this partnership, and I look forward to continuing our support across Truist’s footprint and beyond.”
“Housing security is table stakes for everyone regardless of status. Having a decent, safe and affordable place to call home is absolutely fundamental to families across the country dealing with the ramifications of the pandemic, as well as the everyday challenges they incur in life,” said Cathy A. Niederberger, Executive Vice President for Community Development Banking at PNC Financial Services Group, Inc. “Through our work with Mercy Housing we hope to make more affordable housing options available to the communities that we serve.”
The Gap Note Program will have significant social impact, helping low- and moderate-income households attain safe, affordable housing at a time when it’s needed most. By investing in the Gap Note Program, investors are choosing to put affordable housing projects across the finish line that would not otherwise be completed.
Contact: Kate Peterson | 303.830.3443 | firstname.lastname@example.org
About Mercy Housing, Inc. (MHI): Mercy Housing is a leading national affordable housing nonprofit headquartered in Denver, CO. Established by the Sisters of Mercy in 1981, and in operation in 41 states, MHI has more than 38 years’ experience developing, preserving, managing, and financing affordable housing. MHI supplements much of its housing with Resident Services, programs that help residents build stable lives. MHI’s subsidiaries further the organization’s mission: Mercy Housing Management Group (MHMG) offers professional property management and Mercy Community Capital (MCC) finances projects for socially-responsible developers.
MHI serves tens of thousands of people with low incomes, including families, seniors, veterans, people who have experienced homelessness, and people with disabilities. To learn more about MHI and the services it provides, visit mercyhousing.org.
About PNC Bank: The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit pnc.com.
About Truist: Truist Financial Corporation is a purpose-driven financial services company committed to inspiring and building better lives and communities. Formed by the historic merger of equals of BB&T and SunTrust, Truist has leading market share in many high-growth markets in the country. The company offers a wide range of services including retail, small business and commercial banking; asset management; capital markets; commercial real estate; corporate and institutional banking; insurance; mortgage; payments; specialized lending; and wealth management. Headquartered in Charlotte, North Carolina, Truist is the sixth-largest commercial bank in the U.S. with total assets of $518 billion as of March 31, 2021. Truist Bank, Member FDIC. Learn more at Truist.com.
About CommonSpirit Health: CommonSpirit Health is a nonprofit, Catholic health system dedicated to advancing health for all people. It was created in February 2019 through the combination of Catholic Health Initiatives and Dignity Health. With a team of approximately 150,000 employees and 25,000 physicians and advanced practice clinicians, CommonSpirit Health operates 139 hospitals and more than 1,000 care sites across 21 states. In FY 2020, CommonSpirit had revenues of nearly $29.6 billion and provided $4.6 billion in charity care, community benefit, and unreimbursed government programs. Learn more at commonspirit.org.
About Mercy Investment Services: Mercy Investment Services, the asset management program for the Sisters of Mercy and its ministries, works for systemic change in the areas of non-violence, racism, environment, concern for women, and immigration through socially responsible investing. Guided by the mission and Critical Concerns of the Sisters of Mercy, Mercy Investment Services’ multifaceted approach includes corporate engagement, proxy voting, portfolio screening, and impact and community investments, maximizing our effect on our community, nation and world. Learn more about Mercy Investment Services at mercyinvestmentservices.org.
About the Opus Foundation: Incorporated in 2000, the Opus Foundation® awards more than $3 million annually to projects and programs that build Opus communities and make them better places to live, work and raise families. The Foundation supports nonprofit organizations that foster human and community development with an emphasis on early childhood education, youth development, workforce development, community revitalization and pressing and emerging needs. Learn more at Opus-Group.com/Company/Giving.
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