NMTC Funding for Habitat Homes Build in Iowa

October 2, 2012 --ST. LOUIS, MO:  New Markets Tax Credits (NMTCs) are playing an increasingly important role in helping Habitat for Humanity affiliates provide homeownership opportunities for families in low income communities. In August, Greater Des Moines Habitat for Humanity (GDM Habitat) and four other Iowa Habitat affiliates including Cedar Valley, Iowa Heartland, Iowa Valley, and Siouxland shared $12 million of NMTC financing to build 94 Habitat homes across the state. Financing includes more than $3.6 million of NMTC equity from U.S. Bank in partnership with Iowa Community Development LC (ICD) and Smith NMTC Associates, LLC (Smith NMTC) and sponsorship dollars provided by the Habitat affiliates and various corporate and faith-based organizations and individuals.

Iowa Heartland Habitat for Humanity received a $2.2 million NMTC investment to build 27 (1100 -1200 sq. ft.) homes in Waterloo, Waverly and Cedar Falls, IA. Construction will be completed over a nine year period with 17 of the homes completed by December 2013, three additional homes by August 2014, and the remaining seven homes by August 1, 2021.

The NMTC program is administered by the U.S. Treasury and is designed to spur new or increased investment in operating businesses and real estate developments located in low-income communities. The program provides tax credits as an incentive for private investment and leverages public and private funding to provide borrowers like these Iowa Habitat affiliates with financing in the form of very favorable below market rates and flexible terms.

Partnerships like this one orchestrated by Smith NMTC Associates, LLC (Smith NMTC) with ICD,  and the Iowa Habitat affiliates and invested in by U.S. Bank help stretch fundraising and development dollars, increasing the nonprofit’s ability to meet its mission of building decent, affordable housing for hardworking families in need.

The idea of applying NMTC financing to “for-sale” affordable housing as a funding vehicle for Habitat for Humanity affiliates was the primary goal and focus of Smith NMTC co-founders Howard Smith, JD, Principal and Donna Smith, JD, Executive Vice President.  Having served as president, general counsel and a member of the Habitat for Humanity St. Louis board of directors for over 20 years, Howard knew the revitalizing impact home ownership has on low income communities.  After discussing the idea with NMTC officials at U.S. Bank and putting together a working model, the Smiths saw their idea build – literally. The Smith NMTC Model now makes NMTC dollars available to help Habitat affiliates build more homes and make more homes available to industrious Habitat family partner buyers across the U.S.

Additional benefits of the Habitat home builds receiving NMTC funding are the number of local businesses and volunteers involved in the build furthering their businesses and the local economy.  In Iowa, 73 full-time Habitat affiliate jobs will be retained, one full-time affiliate job will be created, 16 part-time affiliate jobs will be retained and 125 construction or pre-development jobs will be created.

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