REO Capital Fund
Providing specially-tailored loan products to local neighborhood stabilization programs
As the financing arm of the Stabilization Trust, the REO Capital Fund helps community-based organizations finance the acquisition, rehabilitation and interim holding of distressed properties to maximize community revitalization efforts in neighborhoods hard hit by the foreclosure crisis.
By attracting new sources of capital and serving as a financial partner for community-based Community Development Financial Institutions (CDFIs), the REO Capital Fund permits CDFIs to significantly expand lending activities in support of neighborhood stabilization. This provides local community based borrowers with limited public funds access to financing to increase the scale and volume of neighborhood stabilization activities.
How the REO Capital Fund Works
Access More Financing, Acquire More Homes, Achieve Greater Neighborhood Impact
To increase access to capital for community based borrowers, the REO Capital Fund leverages public and philanthropic dollars with senior debt provided by private lenders. Through a program related investment from the Ford Foundation, the REO Capital Fund is able to achieve a credit enhancement structure that enables it's participating CDFIs to offer more flexible loan parameters to community based borrowers than otherwise available in today’s market.
Many municipalities and community-based organizations rely on Neighborhood Stabilization Program funds (NSP) for their stabilization efforts. The REO Capital Fund is designed to maximize the impact of the limited public resources and has been specifically structured to complement the needs of local housing providers using these federal funds. Community based borrowers can use the REO Capital Fund to leverage NSP or other existing funding and dramatically increase the number of properties acquired and renovated in target neighborhoods without sole reliance on the recycling of program income.
Becoming a REO Capital Fund Borrower
If your organization is engaged in a coordinated local effort to stabilize neighborhoods and you are interested in additional information on how the REO Capital Fund can enhance neighborhood stabilization activities in your community or need assistance finding a CDFI program originator, please contact the Stabilization Trust.
If you represent a community-based organization that is interested in obtaining financing through the REO Capital Fund and your organization maintains an existing relationship with participating CDFI, please use your existing contact at that organization.
