“Without Impact Capital we could not have made our project a reality. The challenge facing FareStart was how to secure a site for our new facility prior to having all the pledges and money necessary in our bank account.  Impact Capital funded the financial gap between what a commercial bank would loan us (60% of value) and what we could afford to put as a down payment (7%). Because of Impact Capital, FareStart was able to purchase our building and move our fundraising campaign forward at a critical time.”  
                                                 -Megan Karch, Executive Director, FareStart
                                                                                                                
LOAN APPLICATION GUIDELINES

Impact Capital is a Community Development Financial Institution (CDFI) providing real estate based financing products and organizational support to non-profit community based organizations throughout the Pacific Northwest.  Impact Capital provides a range of flexible financial tools not otherwise available from traditional lending institutions that facilitate the development of affordable housing and community development projects.  Our products and programs provide value added assistance all along the development continuum and support non-profits at every stage of organizational capacity.

Impact Capital provides loans from two distinct pools of funds: the Community Development Lending Fund (“CDLF”) and the Community Investment Fund (“CIF”).  Both funds provide short-term bridge loans.   The CDLF was created to assist non-profit organizations with higher risk, very preliminary site investigation costs associated with preparing initial applications for grants and project financing. Loans made from the CDLF loan pool are called Phase I Pre-Development Loans.  The CIF loan pool was created to assist non-profit organizations take the next steps in project development.  Impact Capital makes secured, interest-bearing bridge loans from the CIF pool, and can be used to bridge capital campaigns and tax credit equity payments.  Specifically, the four main types of loans made from the CIF pool are: 1) Phase II Predevelopment; 2) Acquisition; 3) Construction; and 4) Lines of Credit.  In addition, Impact Capital offers Commercial Tenant Improvement loans on a very limited basis.

Impact Capital is the Northwest affiliate of the Local Initiative Support Corporation (LISC), which provides financing and support to community development organizations nation-wide.  Impact Capital accesses LISC resources for financing needs outside of the state of Washington.  For projects located in the Northwest but outside of Washington, please contact Tess Colby, at (206) 658-2603 or tess@impactcapital.org.

Please contact Impact staff as early in the process as possible in order to discuss the timing of the loan application and funding decisions.

Eligibility Requirements

To be eligible for a loan from Impact Capital, projects must:

• Be located in Washington State for loans from the Impact Capital loan pools.
• Demonstrate acceptable site control (see also CDLF Phase 1 Loans below).
• Be unable to secure sufficient conventional financing to meet project needs.
• Be owned by a nonprofit organization OR Public or Tribal Housing Authority OR a partnership or joint venture between profit and nonprofit organizations in which the property will be under the long-term control of the nonprofit partner AND the nonprofit partner has a significant role during development.
• Be single-or multi-family rental or ownership, community land trust, mixed use (residential plus commercial and/or industrial), commercial/retail, or community facility.
• Provide housing for low-income households (defined as 80% of the area median income or below) for as long a term as possible OR provide non-residential uses that contribute to an articulated economic development strategy.
• Demonstrate evidence of fiscal soundness, managerial competence, and ability to meet the terms of the proposed loan.

To be eligible for CDLF Phase I Predevelopment loan funds, projects must meet the above criteria AND:

• Have NOT applied for state or local funds, such as the State Housing Trust Fund, Low-Income Housing Tax Credits, City or County allocated funds (eg, CDBG, HOME, 2060, 2163, etc.).  Projects that have applied for certain Federal Funds (e.g., Section 811 and Section 202) may be considered for Phase 1 loans.  Contact an Impact Capital Program Officer to discuss prior to submitting an application.
• On a case by case basis Impact Capital will consider applications for Phase 1 loans when a site has been identified but prior to site control.  Contact an Impact Capital Program Officer to discuss prior to submitting an application.

General Loan Terms

• Impact Capital provides short-term predevelopment and bridge financing for acquisition, new construction, rehabilitation, or tenant improvements.  Loan terms typically do not exceed three years, and in no case will exceed five years.
• Interest rates are fixed at time of origination.  Loan payment schedules are structured to match the needs of the project.  Loans may be fully amortized or may be interest-only with principle due at maturity.
• The borrower is expected to pay all fees associated with the origination of the loan, including third party expenses such as legal, appraisal and title.  Impact Capital loan fees vary by loan product.
• Loan to value ratio (total mortgages/appraised value) can be up to 100% of property value where there is adequate security.  Loans in excess of 100% may be considered on an exception basis.
• All loans (except the Phase I Predevelopment Loan) are recourse and secured.  Acceptable security includes: best available deed of trust, guarantee, or other collateral acceptable to Impact Capital.  For Phase 1 Predevelopment Loans, Impact Capital.may secure the Phase 1 loan if the Borrower already owns the subject property.
• Once originated, periodic monitoring will be required on all loans, including the submittal of quarterly and annual financial statements.

Application Process

• Applicants should first contact Impact Capital to discuss the project.  This allows the applicant and Impact Capital staff to review the current status and timing of the project, discuss eligible activities, and determine which loan is appropriate and available for your project. 
• For CDLF Phase 1 Predevelopment loans, the Applicant may only submit the Impact Capital loan application. 
• For CIF loans, the applicant may submit either the Impact Capital loan application or the most recent public funder’s application (e.g., State Housing Trust Fund, City or County application). If submitting an application other than that of Impact Capital, please contact a Program Officer in advance.
• Staff are generally assigned to handle a particular region. However, this arrangement can change from time to time to accommodate high volume, client needs, or scheduling. Please contact the following underwriters, according to region, to discuss your project and lending needs.

If your regional contact person is not available, or for general information about Impact Capital loan products, please contact Tess Colby, at (206) 658-2603 or tess@impactcapital.org.

Applications are accepted at any time. Funding decisions are typically made within four to eight weeks following receipt of a complete application.  This may vary depending on loan type and loan committee meeting schedule.

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