Financing from a Boston-based CDFI will result in 18 new affordable housing units
Bloomington, Ind. – Boston-based Local Enterprise Assistance Fund (LEAF) will invest $425,000 to help Bloomington Cooperative Living (BCL) construct 18 new affordable housing units at 921 West 9th Street. CDFI Friendly Bloomington joins LEAF and the City of Bloomington’s Housing Development Fund in funding BCL’s renovation of a long-vacant single family home into a housing cooperative with 18 new affordable units. The 921 Project is the first major construction project for BCL, expanding their impact and providing more permanent affordability.
To finance this project, CFB engaged LEAF, a nonprofit Massachusetts CDFI specializing in cooperative organizations, to be the majority co-lender and provide expertise in funding housing cooperative development projects. LEAF and CFB will provide construction and permanent financing, including the first-ever loan from CFB’s capital enhancement fund, to ensure affordability for BCL. The City of Bloomington Housing Development Fund also provided a critical deferred loan, which will serve as equity as long as the property remains affordable housing.
CFB will invest $408,000 in the project, at a below-market interest rate. CFB’s loan is essential to attract LEAF to the project and guarantee affordability for BCL. This project marks CDFI Friendly Bloomington’s first deployment of loan capital from CFB Capital, its enhancement fund. The enhancement fund is a revolving loan pool originally capitalized by the Bloomington Urban Enterprise Association, Bloomington Redevelopment Commission, and low-interest debt from German-American Bank, First Financial Bank, and Old National Bank. The enhancement fund improves loan terms for local borrowers and facilitates investments from CDFIs from other places to finance vital developments in Bloomington.
The 921 Project requires a full interior renovation of 921 W. 9th St, which sits in the Near West Side neighborhood. Planned for a 7500 ft² footprint, the property overlooks Reverend Butler Park and Community Garden. Prior to BCL’s acquisition, it had been unoccupied for at least five years, largely due to the significant repairs required. This initiative will create 18 newly renovated bedrooms, with 6 of them in 2-bedroom suite formats, two shared kitchens, and a host of new amenities. The units will be affordable to individuals and families earning under 50% of area median income, which is exceptionally rare for non-voucher facilities. BCL intends for the suites and location to appeal to young families, continuing its efforts to meet Bloomington’s diverse housing needs.
BCL was founded in 2007 in Bloomington, IN, with the goal of providing affordable housing and intentional community. It has since grown to operate three properties – one of which it owns, and two of which it leases – with 48 total bedrooms in single-room occupancy format. BCL was initially founded with support from North American Students of Cooperation (NASCO), regarded as a national leader in the student cooperative movement. BCL aims to establish a sense of permanent identity and intentional community that persists through the turnover of individual members.
Several organizations collaborated to make financing this project viable. CDFI Friendly Bloomington engaged LEAF, a nonprofit Massachusetts CDFI specializing in cooperative organizations, to be the majority co-lender and provide expertise in funding housing cooperative development projects. LEAF and CFB will provide construction and permanent financing, including the first-ever loan from CFB’s capital enhancement fund, to ensure affordability for BCL. The City of Bloomington Housing Development Fund also provided a critical deferred loan of $120,000, which will serve as equity as long as the property remains affordable housing. Notably, the Inter-Cooperative Council at Ann Arbor (ICC), a Michigan cooperative housing nonprofit, generously pledged one of its properties as collateral for the project. Said ICC President Julian Tabron, “ICC believes in BCL’s potential to create a positive impact in their local community, and we see this partnership as an opportunity to start a regional connection among housing co-ops in the midwest.”
With the critical support of each partner, BCL will transform a vacant, deteriorating property into newly renovated, denser, highly affordable housing close to downtown, while integrating with the Near West Side neighborhood’s community and aesthetic. In addition to providing affordable housing in Bloomington, BCL seeks to foster positive community growth through community meals, events, and a number of interactive outreach initiatives with the goal of increasing affordable housing opportunities in the community.
“BCL is tremendously pleased with the cooperative spirit that has driven the project, from financing to community and municipal engagement,” BCL President Zackary Dunivin said. “The 921 house is a leap forward for our organization and the continued expansion of affordable, community-oriented housing in Bloomington.” BCL Treasurer Evelyn Smith added: “The work that so many folks have put into making this a reality is probably the best example I can imagine for the co-op ethos: together we can build incredible things.”
“The Local Enterprise Assistance Fund is pleased to support the redevelopment of 921 W 9th St in Bloomington,” said LEAF’s Director of Lending Josh Glickenhaus. “This project will create much-needed affordable housing, and uphold BCL’s commitment to the principles of cooperation and democratic self-governance. LEAF appreciates the vision and hard work that BCL has put into this project, and the support of the many partners who have helped make it a reality.”
“This is a great addition to affordable housing close to downtown. And I’m very pleased to see how CDFI Friendly Bloomington is hitting its stride and helping bring partners from across the country together to make good things happen here at home,” said Bloomington Mayor John Hamilton. “None of this happens without strong and innovative local partners who can overcome challenges to make lives better for more of our residents. Thanks as well go to the City’s Housing Development Fund which provided a critical piece to bring it all together.”
“CFB is proving that the CDFI Friendly approach works,” according to Mark Pinsky, founder of CDFI Friendly America and leading industry expert. “A Boston-based CDFI is able to lend in Bloomington for an important community project because CFB is involved as a technical advisor and has a financial stake in the project.”
“This unique collaboration enables a small nonprofit to undertake an unprecedented mission-based project without jeopardizing their financial solvency,” said Brian Payne, executive director of CDFI Friendly Bloomington. “This is a tremendous achievement for BCL, and a genuine proof of concept for CDFI Friendly Bloomington.”
Bloomington Cooperative Living was founded in 2007 to foster vibrant, affordable housing opportunities in Bloomington that contribute to the establishment of local neighborhoods with a strengthened sense of community. Despite the undeniably transitory nature of rental housing, BCL endeavors to establish a sense of permanent identity and community that persists through the turnover of renter populations. Since its founding, BCL has grown to operate three properties with 48 total bedrooms in SRO format, with each property maintaining the level of accessibility and affordability promised in the organization’s mission. https://www.bloomingtoncooperative.org/
About CDFI Friendly Bloomington
CDFI Friendly Bloomington is an innovative new organization working to increase access to flexible, affordable financing for community development. Formed in 2018, CDFI Friendly Bloomington is a nonprofit focused on connecting local investment opportunities with regional and national community development financial institutions (CDFIs). CDFIs are private financing entities that specialize in markets and populations that often cannot qualify for traditional financing. CDFI Friendly Bloomington will promote local projects, facilitate deals, and offer financing alongside CDFIs to incent their participation or bridge an asset gap in the project. More information can be found at https://www.cdfifriendlybtown.org.
Based in Boston, MA, Local Enterprise Assistance Fund (LEAF) has operated since 1982 with the continued goal of promoting human and economic development by providing financing and development assistance to cooperatives and social purpose ventures. LEAF lends nationally with a focus on worker-owned firms, community-owned food cooperatives, and housing cooperatives and land trusts that provide affordable housing options for low-income families and individuals. Since its founding, LEAF has invested and leveraged over $122 million in community-owned cooperatives. https://leaffund.org/
About the City of Bloomington HDF
The City of Bloomington’s Housing Development Fund was established by city ordinance in 2016. The purpose of the fund is to provide funding to developers to increase the amount of affordable housing available within the Bloomington community. Since its inception, the fund has invested $1,035,421 in the development of 262 affordable housing units for low/moderate income families.