Financing
Financing
Native Home Capital works with and seeks out partnerships to leverage funds and technical assistance for the sake of innovative financing alternatives for tribal projects. Although we also provide pre-development and gap financing on more conventional lending terms, the following case study illustrates how more complex transactions may be structured.
AFFORDABLE HOUSING MODERNIZATION & SOLAR ROOF PROJECT
Financial Summary
|
Money In |
$250K from utility settlement fund, $300K from Native Home Capital |
|
Repayment |
Payments come from monthly rents established under an expiring state Low Income Housing Tax Credit program. |
|
Risk Mitigation |
By saving on the electric bill, residents can more easily make the monthly payment. The loan from Native Home Capital is made to the housing authority that secures the loan by a pledge of investment assets. The housing authority then makes loans to residents as the housing authority is in a better position to service loans by virtue of having collecting lease payments for 15 years from the same residents. Homes have been conveyed to the residents through a long-term lease-to-own program and the equity established secures the loan made by the housing authority to residents. |
5 Year Loan Details
|
Interest Rate |
1% |
|
Loan Amount |
$300,000 |
|
Duration |
60 Months |
|
Monthly Payment |
$5,800 |
Energy Savings
|
Assumptions |
9 Watt generated per ft2 of solar panel |
|
5 the average solar energy system provided output in hrs/day |
|
|
0.66 average kW used per ft2 |
|
|
$0.09 per kW |
Financing: $300,000 loan at 6% for 5 years. Repaid by monthly rent payments.
Community Value: Setting a positive example in the community, PR attention, and rapidly gaining an asset with long-term life value. Reduced Environmental Footprint: solar panels generate enough energy per year to cover all electricity for the installation.
Economic Value: Residents are currently using old, inefficient electric base-board heaters and in some cases wood-burning stoves. The modernization of the home that includes weatherization retrofits as well as the solar roof upgrade reduces the operating cost of the home, saves electricity and increases the value of the home.
