CONCORD, N.H. – Nine organizations have come together to create a financing vehicle that positions homeowners in Colorado manufactured home communities to successfully purchase their neighborhoods when they come up for sale.
ROC USA® Capital and Thistle Community Housing collaborated with banks and nonprofits to secure a $55 million capital pool last month. State law gives Colorado homeowners a short window to organize and secure financing to match a competing offer when their community is for sale.
“ROC USA Capital is very pleased to have partnered with Colorado Housing and Finance Authority (CHFA), Colorado Health Foundation, Colorado Trust, Ally Bank, KeyBank, Mercy Community Capital, JPMorgan Chase and Thistle Community Housing to assemble this critical Pool of capital to empower lower-income homeowners in Colorado to buy, preserve and improve the manufactured home communities in which they live,” said Michael Sloss, Managing Director of ROC USA Capital. “This below-market-rate pool of community acquisition capital is critical to long-term affordability for lower-income homeowners in Colorado.”
The $55 million was secured in September 2022.
In a typical manufactured home community (still often outdatedly called “mobile home parks”), residents own their home but rent the land on which it sits from a landlord who sets the rent and rules, and is responsible for maintaining the infrastructure, plowing roads, performing tree work and more. In a resident-owned community (ROC), homeowners purchase the land as a limited-equity cooperative. Each Member household owns an equal share of the land, elects a Board of Directors, and votes on important issues such as community rules, site fees, etc.
Since 2017, Thistle and ROC USA® have been partnering to deliver expert technical assistance and financing to lower-income homeowners to buy and improve their MHCs. Through 2021, six ROCs have been assisted and financed through this partnership, delivering long-term housing security for more than 300 homeowners in Boulder County as well as Cañon City, Durango and Leadville.
“We are so excited about the support from the banks and foundations who are part of this loan Pool, and we hope this attracts even more people to come to the table,” said Paul D’Angelo, CEO of Thistle. “We couldn’t do this without the support of our state, which values manufactured home communities and their owners. Colorado recognizes the importance of manufactured home communities in the affordable housing solution.”
In 2020, the Colorado Legislature passed an Opportunity to Purchase law, which allows homeowner groups there to match third-party offers from private investor-developers when their manufactured home communities go up for sale. However, the initial legislation required homeowner groups to secure financing commitments within 90 days of the required notice of sale. Thistle and ROC USA Capital worked with two homeowner groups in Boulder County and Durango during the first half of 2021 to buy their MHCs using this law. At that time, $21 million was assembled from seven different sources of private, public and philanthropic capital, but it took more than 90 days to do so, leaving the homeowners, Thistle and ROC USA Capital with all the risk on the 90th day.
In Fall 2021, Thistle and ROC USA Capital invited the investors from these two ROCs, and others, to form a Steering Committee to assemble a pool of up-front and below-market-rate capital for this purpose. Throughout 2022, members from the Steering Committee met, and on Sept. 15, the $55 Million Master Loan Participation Agreement was executed.
This pool of money empowers future homeowner groups using the Colorado OTP law to take on the resident-ownership process with confidence that a below-market, fixed-rate, 10-year acquisition/permanent loan product is available to them within the financing contingency period required by law.
The 40 low-income and largely Latino homeowners at Paradise Village Cooperative in Johnstown, Colo., have already taken advantage of this Pool. The homeowners closed on the acquisition of their community in early October with a $3 million first mortgage/permanent loan at 4.77 percent fixed interest rate for 10 years, a rate well below current market rates for 10-year loans. Paradise Village Cooperative serves an entirely low-income population, with 70% of homeowners earning below 50% AMI and all earning below 80% AMI.
Michael Sloss, Managing Director, ROC USA Capital: (603) 724-8370
Paul D’Angelo, CEO, Thistle Community Housing: (303) 590-3280
Mike Bullard, Vice President, Communications, ROC USA: (603) 513-2827
About the Partners
ROC USA (rocusa.org) is a non-profit social venture with a national network of affiliates and a national financing source for resident corporations. ROC USA® is sponsored by the Ford Foundation, NeighborWorks® America, Capital Impact Partners, Prosperity Now, and the New Hampshire Community Loan Fund. The Community Loan Fund, a non-profit community development financial institution in New Hampshire, leveraged its experience with 90 resident-owned communities at the time to launch ROC USA with national partners in May 2008. All told, ROC USA Network has helped 303 communities preserve more than 21,000 homes in 20 states.
Thistle (https://thistle.us/) is a private, nonprofit organization that develops manages and preserves quality, permanently affordable rental and ownership homes in Boulder County. Since 1985, Thistle has created more than 1,000 affordable homes and worked with valued partners, invested in properties to preserve and enhance more than $45 million in community assets.
Ally Financial Inc. contributed $11 million. “Ally is proud to join ROC USA, the Colorado Health Foundation and others to support this innovative affordable housing solution that helps these residents avoid potential displacement,” said Jan Bergeson, Ally’s Community Reinvestment Act Officer. “Increasing and retaining home ownership is a key focus for Ally because it leads to healthier communities, drives greater job security, makes families and communities stronger and helps build generational wealth.”
NYSE: ALLY https://www.ally.com is a digital financial services company committed to its promise to “Do It Right” for its consumer, commercial and corporate customers. Ally is composed of an industry-leading independent auto finance and insurance operation, an award-winning digital direct bank (Ally Bank, Member FDIC and Equal Housing Lender, which offers mortgage lending, point-of-sale personal lending, and a variety of deposit and other banking products), a consumer credit card business, a corporate finance business for equity sponsors and middle-market companies, and securities brokerage and investment advisory services. Our brand conviction is that we are all better off with an ally, and our focus is on helping our customers achieve their strongest financial well-being, a notion personalized to what is important to them. For more information, follow @allyfinancial. For more information and disclosures about Ally, visit https://www.ally.com/#disclosures. For further images and news on Ally, please visit http://media.ally.com.
KeyBank contributed $11 million. “KeyBank is proud to help expand access for affordable housing for residents in Colorado,” said Brian Maddox, national leader of KeyBank’s Community Development Financial Institutions (CDFI) team. “Our $11 million investment is a part of our commitment to the communities we serve and builds on the success of our National Community Benefits Plan.”
CHFA contributed $10 million. “Because manufactured home communities are an important, naturally occurring affordable housing option for Coloradans, it is important to CHFA to invest in their preservation,” said Cris White, CEO and executive director of CHFA. “The loan pool is a vital tool to assist in this effort and empowers homeowners to ensure their long-term housing stability. CHFA applauds all of the partners involved in creating this innovative resource.”
CHFA (https://www.chfainfo.com/) strengthens Colorado by investing in affordable housing and community development. Created in 1973, CHFA invests in affordable homeownership, the development and preservation of affordable rental housing, helps small- and medium-sized businesses access capital, offers technical assistance and financial support to strengthen local communities, and supports mission-aligned nonprofits through philanthropic investment. CHFA is a self-sustaining public enterprise. CHFA issued debt is not the obligation of the state. For more information about CHFA, please call 1.800.877.chfa (2432).
Mercy Community Capital contributed $4 million. “The critical component of housing is often overlooked as developers and financial institutions focus on more traditional sources, such as apartments, townhomes and single-family homes,” said Jason Battista, president of Mercy Community Capital. “To address the deepening affordable housing shortage, Mercy Community Capital is excited to partner with ROC USA and this consortium of mission-driven capital providers to make a real impact in Colorado by targeting resident-owned communities.”
ROC USA Capital contributed the remaining $19 million which was made possible by contributions from JPMorgan Chase, The Colorado Health Foundation, The Colorado Trust, and others.
The Colorado Health Foundation contributed $5 million. “The affordable housing crisis is keeping health and mental wellness out of reach for far too many – especially people of color while limiting folks’ opportunity to build wealth through homeownership,” said Ben L. Bynum M.D., Senior Director, Impact Investing at The Colorado Health Foundation. “Supporting mobile home communities offers CHF the ability to impact homeowners living on low incomes. This Fund is an innovative and collaborative partnership to allow mobile homeowners to purchase the land underneath their homes, improve community infrastructure and drive overall economic stabilizations for homeowners living in mobile home communities in Colorado.”
The Colorado Health Foundation (https://coloradohealth.org/) is bringing health in reach for all Coloradans by engaging closely with communities across the state through investing, policy advocacy, learning and capacity building. For more information, please visit www.coloradohealth.org.
The Colorado Trust contributed $5 million. “Colorado is experiencing a significant shortage of affordable housing statewide,” said Donald J. Mares, President and CEO of The Colorado Trust. “With housing stability being one of the leading social determinants of health, it was crucial for our foundation to support this important effort to empower residents of manufactured home communities to determine their own futures.”
The Colorado Trust (www.coloradotrust.org) is a foundation dedicated to ensuring all Coloradans have the opportunity to thrive. The Colorado Trust partners with people and organizations working to make positive changes in communities across Colorado. The foundation provides funding and other resources so that all people have the power to make decisions that improve their lives and the lives of their neighbors. The Colorado Trust also believes local and statewide policies should have a positive impact on people’s well-being. It provides grants and support to organizations that advocate for policies that ensure all Coloradans live healthier lives.
In 2021, JPMorgan Chase supported ROC USA Capital with a $10 million loan to catalyze the launch of place-based funds in different states, of which up to $6 million will support the Colorado Fund. “JPMorgan Chase is pleased to support this effort and help more homeowners in Colorado preserve their homes” said Erin Robert, Head of Impact Finance at JPMorgan Chase. “Working with innovative partners like ROC USA enables JPMorgan Chase to diversify its tools to drive economic opportunity. Housing stability and affordability disproportionately affects households of color, and we are committed to finding ways to providing people with access to safe and affordable homes.”