The National Community Reinvestment Coalition, a nonprofit affordable housing organization, announced Tuesday the launch of GROWTH, an initiative designed to create new pathways to homeownership for low- and moderate-income families.
GROWTH purchases, renovates and sells homes in low- and moderate-income neighborhoods through its impact investment-driven NCRC Housing Rehab Fund. The program, uniquely designed by NCRC, in partnership with banks and other investors, will initially launch in Wilmington, Delaware, and then expand to a total of 10 to 15 markets.
“GROWTH represents the perfect example of how community leaders, government and financial institutions can come together around a common agenda to have a positive impact in low- and moderate-income neighborhoods,” said NCRC President and CEO John Taylor. “GROWTH will increase the opportunity for working-class Americans to have access to affordable housing. Without the commitment of the financial institutions that have invested in GROWTH, this would not have been possible.”
The Fund has an initial offering size of $80 million with the GROWTH initiative purchasing and renovating up to four thousand single-family homes. All of the homes will be sold at affordable prices to LMI families or in LMI census tracts to others and approximately 30% are being made available as “lease-to-own” properties for families desiring to become homeowners but who may not currently have the high credit scores demanded by many mortgage companies.
GROWTH will provide housing and financial capability counseling through the NCRC’s Housing Counseling Network and other HUD-certified agencies. Local construction jobs and pre- apprenticeship opportunities will be made available for local LMI residents to work on the crews that renovate homes purchased by GROWTH.
“This announcement represents another important investment in the quality affordable housing opportunities that are vital to revitalizing neighborhoods and creating economic opportunity for Delawareans,” said Delaware Governor Jack Markell. “I'm pleased to see the program will begin in Wilmington, where, through initiatives like the Downtown Development District and Neighborhood Building Blocks programs, we are focused on encouraging a wave of economic development. I thank everyone involved with NCRC for their tremendous commitment to affordable housing.”
LMI families, defined as those with income below 80% of an area’s median income, are in desperate need of affordable and secure housing options. Recent data indicates that rental housing is escalating in costs at 4% annually and is currently 38% more expensive than homeownership for comparable housing.
“With homeownership at a 20-year low, the time is right to find new ways to reinvigorate the American Dream of homeownership and wealth building opportunities for families by providing sustainable, affordable mortgages,” said Ed Gorman, NCRC chief community development officer and managing director of GROWTH.
GROWTH offers investors Community Reinvestment Act credit opportunities, a return on investment and mission-focused fund management that invests with greater frequency in LMI communities than traditional equity funds.
Discover Bank, one of the first investors in GROWTH, has played a significant role in helping to bring the initiative to Delaware.
“It’s important that we invest in programs like the GROWTH initiative as it will provide Delaware LMI families with new homeownership opportunities and provide Delaware’s victims of the foreclosure crisis with the opportunity of homeownership once again,” said Jim Roszkowski, president of Discover Bank. "Helping Delaware families get back on the path to a brighter financial future has been Discover Bank's mission since our founding.”