HAC is proud to present our 2023 Loan Fund Impact Report. In fiscal year 2023 (October 2022-September 2023), our Loan Fund provided $31.4 million in financing through 34 loans—including 13 (37%) made to minority-led borrowers—to build, rehabilitate, or preserve 900 affordable homes.
Leonel Parra, CFO
The Housing Assistance Council (HAC) is excited to welcome Leonel Parra as our new Chief Financial Officer (CFO). With extensive expertise in the non-profit, financial, and professional services, technology, and manufacturing sectors, Leonel brings a wealth of knowledge that will help HAC sustain our unprecedented growth and deepen our impact.
Leonel joins HAC from his most recent role as CFO at United Way Worldwide. Before that, Leonel was at mortgage giant Freddie Mac as a Head of Business Management and Chief of Staff charged with integrating Risk and Finance operations. Much of Leonel’s early career was with General Electric where he held various CFO and financial leadership positions across five business units, three industry sectors, and four countries. Notably, he was CFO for GE Capital Commercial Lending with their $5.5B loan portfolio.
“HAC has been building momentum and expanding our work. As we forge ahead, the demand for HAC to be a more sophisticated organization increases. We aim to meet the needs of small-town housing organizations across the country that rely on HAC for support and guidance.,” said HAC CEO David Lipsetz. “We are incredibly excited to have Leonel join the HAC team and help us build the systems to sustain and supercharge that progress.”
Leonel is a licensed CPA, with a degree in Accounting from Universidad Autonoma de Chihuahua, Mexico. He volunteers for organizations that promote financial literacy and has a passion to leverage his extensive experience to help communities in need. Leonel lives in North Potomac, MD, with his wife and three children.
HAC would like to present its Annual Report for the year 2022.
The Housing Assistance Council (HAC) is soaring to new heights. For our 50th anniversary last year, we turned our attention to building a launch pad for rural prosperity over the next 50 years. We are proud to report that in 2022 HAC blasted off from that launch pad, broadening the ways we help rural communities build a better future.
In 2022, HAC lending and technical assistance built the capacity of 166 rural housing organizations across 43 states. We published 24 editions of HAC News and 13 new research products, including 3 guides to resources needed to recover from a natural disasters. We invested more than we ever have before: $22.2 million to finance the construction, preservation, or rehab of 787 affordable homes. Plus, more than 37% of our loans were made in counties that have had a poverty rate of at least 20% for the last three decades. At the same time, we increased our staff by 21%, expanding the footprint of our work.
Last year, HAC enhanced our position as the Nation’s source for independent, non-partisan policy solutions for rural housing and community development. With the help of our first-ever Director of Policy, HAC led the effort to secure historic federal investment in manufactured housing communities. We met with House and Senate leadership, testified before Committees, worked with the White House and continued to be the go-to source for research and analysis on rural housing markets and living conditions in small towns.
2022 was also a big year for HAC’s “housing-adjacent” work on community facilities and placemaking. We’ve always known that community is more than a collection of houses. By finding new ways to engage small towns as they develop community facilities—such as parks, libraries, and childcare centers—HAC has helped them cultivate a feeling of belonging while providing tangible benefits for every resident. Also in 2022, we more than doubled our work in placemaking, which uses design and the arts to bring communities together, as a catalyst toward sustained community betterment and economic growth.
Additionally, we spent 2022 deepening our impact on affordable housing development. Combining both financing and technical assistance, HAC opened new avenues of work supporting rural rental preservation, ensuring that more existing affordable homes remain high-quality and rent assisted for years to come. Plus, we redoubled our efforts to better understand our impact and identify areas of growth through data and metrics.
HAC has been hard at work increasing the depth and breadth of our impact across rural America. As we reach greater heights and do more, we thank you for boosting our work. We’re excited to show you what this momentum will help all of us achieve.
The Carnation Milk plant in Tupelo, Mississippi, has sat vacant since 1972. In about a year, that will change when 33 low-income senior households move into new affordable homes in this old factory. This May, Old Historic Carnation, LP broke ground on Carnation Village, a $16.8 million adaptive reuse project to convert the abandoned factory into 33 units of affordable senior housing. These units are sorely needed in Tupelo, a high-poverty community which needs over 1,500 additional senior affordable housing units. With a $325,000 loan from The Housing Assistance Council (HAC)—and two sixth-month extensions to that loan—the developer successfully navigated a predevelopment process mired in construction cost increases and unexpected funding gaps. Here’s how:
The original project scope called for 50 units: 25 from an adaptive re-use of the plant itself and another 25 in a second building to be constructed next door. When our loan closed in July 2021, the project budget totaled about $12.7 million, to be funded by Low Income Housing Tax Credits, Historic Tax Credits, and a $1.6 million equity investment. Our financing covered the predevelopment costs of the work required to get to construction financing closing including environmental testing, historic preservation approvals, tax credit application and reservation fees, a market study, and an appraisal.
In the fall of 2021, increases in construction costs left Old Historic Carnation with a $3.8 million funding gap. By the time they applied for and received more tax credits from the Mississippi Housing Corporation (MHC), added a $1 million mortgage, received approval from the National Park Service, and updated the construction bids, costs had increased by a further $4.5 million. In the space of less than a year, the construction cost for the project nearly doubled.
Because HAC can be a patient lender, we extended our loan by six months to give the developer time to solve the problem. Old Historic Carnation applied for and received another tax credit increase from the state, reduced costs with value engineering measures, and increased the deferred developer fee by almost $2 million.
Construction costs increased again in the summer of 2022, causing the equity investor to back out of the project. The developer went back to the drawing board once again and reduced the project’s scope to 33 units, all affordable to households making less than 80% of the area median income (AMI). Plus, 26 would also be affordable to households under 60% AMI. With an additional loan extension from HAC, Old Historic Carnation secured approval of the new scope by MHC, obtained the necessary building permits, and have now begun demolition.
HAC Loan Office Alison Duncan (center) breaks ground for Carnation Village. Photo by Adam Robison, the Daily Journal.
On March 21st, Old Historic Carnation, LP closed on construction financing and repaid our predevelopment loan in full. And on May 31st, the project broke ground. Old Historic Carnation’s persistence and creativity made this project a success. But it was HAC’s flexibility that supported them as they went through the process of raising additional funds three times to make the project work. The Carnation Village project showcases how the ingenuity of a local housing developer, solid working relationships with private, state and federal funders, and flexible and patient HAC financing all add up to bring difficult and important projects to fruition. Fifty-one years ago, Carnation Milk closed its factory in Tupelo, Mississippi. Soon, thirty-three low-income, senior households will be able to call it home.
HAC is proud to be a critical part of this project and we look forward to watching it develop.
Rural communities need—and deserve—a coherent, national policy strategy that promotes prosperity. For such a strategy to move the needle, it must end the housing affordability crisis and build the capacity of rural communities to make the most of every opportunity.
Our homes are part of the foundation of thriving families and communities—they are pathways to realizing America’s full potential. With decent, healthy, and affordable homes, kids can succeed at school, seniors can age in place, and families can build wealth. Economics, health, education, and many more components of prosperous communities are all intimately tied to our homes.
The capital needed for a housing market to function is a lot like water: it flows down the path of least resistance, and it pools. For over 50 years—whether intentionally or not—public policy has channeled capital’s flow into sprawling metropolitan regions and allowed it to pool in suburbs and downtown commercial centers. This has deepened inequality and stifled opportunity in the communities that have been left out.
Building rural prosperity will happen one nail and one funding application at a time. Turning those into a national renaissance for rural America will take strategy. If we want investment to flow to a broader set of places and especially to the people and places which need it most, then we need public policy specifically designed to drive resources in their direction. To make the most of that capital, we must also build the capacity of those communities.
HAC builds the capacity of small towns and rural places to create thriving, prosperous communities. If you share our mission, please advocate on behalf of public funds for capacity building programs. We also hope you will consider making a gift to HAC to help us do more in rural America.
Are you an emerging consulting firm passionate about working with CDFIs, Non-Profits, and/or Rural Communities? We invite you to submit a proposal for HAC’s strategic planning process!
The Housing Assistance Council (HAC) seeks a consultant to support the organization and our stakeholders in the creation of a three-to-five-year strategic plan. Through the strategic planning process, we hope to:
If you are interested, please review the attached RFP for greater detail on aims, scopes, deliverables, and proposal layout.
HAC reviews proposals, hires consultants, and employs staff with a deep commitment to diversity, equity, and providing the opportunity for those of us from communities that have been underserved based on race, color, ethnicity, gender, national origin, age, religion, sexual orientation, disability, marital or familial status, ancestry, or status as a veteran. Businesses owned and run by people of those communities are strongly encouraged to apply.
For any questions about this RFP, contact strategic@ruralhome.org.
All Applications are Due by Thursday, 1/18/2023 *DEADLINE EXTENDED*
In the summer of 2022, the New Mexico Mortgage Finance Authority (MFA) faced a difficult challenge. Several state legislators and farmworker groups asked the organization to help meet the housing needs of migrant and seasonal farmworkers. Since farms employ farmworkers with the shifting seasons, many farmworkers only stay in a community for a few months before needing to move elsewhere in search of work. Affordable housing development is complex in the best of cases. Underwriting a project that would have a near complete turnover of residents every four or five months seemed almost impossible.
So, MFA called the Housing Assistance Council (HAC). This wasn’t the first or second time that HAC helped MFA address challenges in its programs. In fact, HAC and MFA have a working relationship well over two decades old. Because of this extensive engagement, MFA Executive Director and CEO Izzy Hernandez knew he could rely on HAC Housing Consultant Eugene (Gene) Gonzalez to help find a solution to this challenge.
Gene connected MFA with groups across the southwest working on similar projects housing migrant farmworkers. With HAC’s help and advice from peers, MFA was able to identify a developer and line up alternate financing options for a project that meets this critical housing need. The development is in its initial phase, but for Hernandez, this is just the latest example of HAC’s reliable, ongoing partnership.
HAC began working with MFA in the early 2000s. A few years earlier, MFA was selected to administer all of New Mexico’s housing programs. Many of the on-the-ground housing organizations who needed MFA funding the most were struggling to obtain designation as community housing development organizations (CHDOs). CHDO designation is a prerequisite to accessing the federal and state programs MFA administered. So, HAC helped eight organizations identify their capacity needs, provided technical assistance to meet those needs, and guided them through the process to obtain CHDO designation. As a result, each of the eight organizations was able to access MFA funds, which allowed MFA to turn those program dollars into homes in communities that desperately needed them.
While the specifics of HAC and MFA’s collaboration has evolved over time to meet the unique needs of each project, the core challenge HAC helps MFA address remains the same. Like all state housing authorities, MFA relies on the success of its client housing organizations. If they do not succeed, MFA cannot make the most of federal and state programs and cannot meet, as Hernandez puts it, “the extraordinary need for affordable housing.” HAC has long helped and continues to help build the capacity of MFA clients. This not only helps to build more affordable homes in rural New Mexico; according to Hernandez, HAC’s work helps MFA “reach communities we couldn’t reach before.”
When HAC began working with Tierra Del Sol Housing Corporation, one of MFA’s clients, the organization was rehabbing nearly 100 homes per year and building only about nine units per year. HAC provided training and technical assistance to help Tierra Del Sol with land acquisition, green building, energy efficiency, and more. With HAC’s help, the nonprofit expanded its self-help program, began building entire neighborhoods of farmworker housing, and grew to become the largest housing rehabber in the state of New Mexico. In addition, TDS accomplished all this development while focusing work in colonias, communities near the U.S.-Mexico border characterized by high poverty rates and substandard living conditions. Looking back on this incredible success, Hernandez is quick to say that “HAC has played a big role in that.”
Nowadays, MFA frequently refers struggling clients to HAC. Once referred, HAC often includes these organizations in our capacity building and technical assistance cohorts, where they receive one-on-one technical guidance and capacity building assistance. According to Hernandez, whenever HAC receives a new round of funding for technical assistance, he receives a call from Gene asking which groups in New Mexico need help. “We have some groups that were on the bubble of surviving or not,” says Hernandez, “but we have never had one group go out of business. HAC kept them in the game.”
The three hundred plus housing organizations in New Mexico all play an important role in meeting the state’s housing needs. In 2021, they collectively assisted more than 25,000 families in finding quality affordable housing. HAC capacity building assistance helps to ensure that these groups can build homes, effectively implement housing assistance programs, and remain in compliance.
Click here to learn more about HAC’s training and technical assistance.
Almost every local housing nonprofit begins with a vision: meeting the housing needs of their community. Unfortunately, the path from recognizing that need to meeting it can be difficult. Labor shortages, increasing construction costs, and the complexity of financial transactions and government programs can all make it challenging for housing non-profits to succeed.
That’s why the Housing Assistance Council (HAC) works with housing organizations across rural America to help them overcome both financial and technical challenges. HAC’s goal, as Director of Training and Technical Assistance Shonterria Charleston puts it, is to “create a pipeline for capacity building that allows our partners to get many of their needs met by one organization.”
For thirty years, Adults and Youth United Development Association (AYUDA) has worked to improve housing conditions and increase access to public services in the colonias in and around San Elizario, Texas. According to AYUDA’s Housing and Community Services Director Miguel Chacon, the group was established to advocate for running water and septic tanks in colonias but has grown to providing home repair, rental assistance, vaccine outreach, food distribution, and more.
As AYUDA has grown, it’s turned to HAC for support. For twelve years, HAC Housing Specialist Anselmo Telles and Housing Development Consultant Eugene Gonzales have provided technical assistance to help AYUDA navigate the hurdles of managing new and expanded housing programs. “I didn’t know anything about housing back then,” remembers Miguel. But, with HAC’s help, AYUDA has developed deeply impactful housing programs. Between 2016 and 2021, AYUDA built or rehabbed over 200 homes. Despite this track record, AYUDA ran into a problem in early 2021.
“We were having trouble with our cash flow,” Miguel explains. AYUDA’s home repair and construction programs are financed by the Texas Department of Housing and Community Affairs (TDHCA). Still reeling from the COVID pandemic, the Department was taking months to reimburse AYUDA for the costs of rehab and construction. This put AYUDA in a difficult position. They could stop work while waiting for payments from TDHCA or they could keep their projects moving forward while struggling to pay their contractors on time.
“As I do the organizational assessment, I look to see if they need money for construction, staffing, or anything like that,” Eugene explains. It was during an organizational assessment of AYUDA that he saw that cash flow was the largest bottleneck in AYUDA’s construction process. So, Eugene reached out to Kristin Blum, HAC’s Senior Loan Officer, to see if our Loan Fund could help. Kristin notes that we wanted to be creative and find a solution that worked for AYUDA. As HAC’s Director of Lending Eileen Neely points out, HAC doesn’t try to fit organizations into boxes. Instead, we focus on understanding each group’s unique needs and tailoring financing to help them achieve their goals.
After meeting with both AYUDA and HAC’s technical assistance team, the Loan Fund came up with a creative financing option. The plan was to establish a $367,000 revolving line of credit. When AYUDA would complete a new home or rehab project, it could draw on this line of credit to bridge the funding gap until TDHCA issued grant reimbursements.
In July 2021, the loan was approved, and AYUDA began to draw on its new line of credit just two months later. According to Miguel, this capital ensured that AYUDA was able to keep building and keep moving forward. Pointing to the 25 homes AYUDA has built or rehabbed in the last year, Miguel explains that “we were able to accomplish that because of the line of credit.”
The upshot of HAC’s holistic approach to capacity building is, according to Eugene, “that groups get the money they need, and then TA comes in to make sure they’re on track.” Ultimately, this means groups can build more affordable homes. Miguel shared that when AYUDA was weighing whether to halt construction at the beginning of the pandemic, his clients urged AYUDA to find a way to keep going. With HAC’s help, AYUDA kept building throughout 2020 and 2021. “That gave our community hope,” says Miguel.
The collaboration between HAC’s lending and technical assistance made both more effective. Our Loan Fund would have never known about AYUDA’s challenges without Eugene. As Kristin notes, collaboration is what made this loan possible in the first place. Plus, as Eugene explains, the on-going technical assistance relationship gave the Loan Fund a sense of confidence that this financing solution would work.
By pairing technical assistance and lending, HAC also helped AYUDA expand its capacity as an affordable housing non-profit. Miguel says that AYUDA never had a line of credit before. Now, his staff have experience as borrowers, with more knowledge about how to navigate the financing process and manage tasks like fulfilling reporting requirements. The financial stability afforded by this line of credit and the support of technical assistance make it easier for the organization to expand the programs it offers. In fact, the State of Texas has tapped AYUDA to manage American Rescue Plan rental assistance across a four-county service area. His organization’s growing capacity gives Miguel the confidence to say that there’s nothing they can’t learn.
The story of HAC’s work with AYUDA isn’t an isolated example—it’s how HAC operates. HAC regularly includes borrowers in our technical assistance rounds and makes loans to current TA recipients. As Shonterria notes, “the Loan Fund is our first stop when we work with a group that needs capital.” The years-long relationships built by HAC housing specialists make it easier to craft lending products to fit each group’s needs. “The more we know about a potential borrower and their mission, the better we are at what we do,” explains Eileen.
HAC is committed to building the capacity of our local partners, expanding their ability to meet their neighbors’ housing needs. No organization faces only technical challenges or financial hurdles—every organization grapples with both, at one point or another. By working with groups holistically, we help them overcome whatever challenges come their way.
Click here to learn more about HAC’s lending products, and click here to learn more about HAC’s training and technical assistance.
