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Article Archives: Maryland

Maryland Linked Deposit Program
The Maryland Linked Deposit Program opened for business in February to help certified minority business enterprises obtain the affordable capital they need to grow and expand their businesses. The statewide program, administered by the Maryland Department of Housing and Community Development (DHCD) and the Maryland State Treasurer's Office, is intended to stimulate economic opportunities for Maryland's certified minority business enterprises with reduced-rate loans from participating lenders.

Here's how the program works: The minority business enterprise submits an application to the Linked Deposit Program, which verifies the applicant's certification and forwards the application to banks enrolled in the program. The applicant is given the list of participating lenders and is advised to contact a lender who can complete the loan application. The lender makes the loan according to standard underwriting procedures but with an interest rate 2 percent below what the bank would charge for a loan of similar purpose and term. The loan is then enrolled in the Linked Deposit Program.

Why do lenders participate? The loan is backed by an insured certificate of deposit that the state treasurer's office buys from the bank-at a rate 2 percent below the market rate-to enable the bank to make the reduced rate loan to the minority business enterprise. In this way, the state increases capital available to minority businesses and reduces the potential risks to lenders. Loan terms cannot exceed 10 years and must be used for projects in Maryland. For more information on the Linked Deposit Program, contact Charles Day, program manager for DHCD's Division of Neighborhood Revitalization, at (410) 514-7245 or
[Community Developments Newsletter, Fall 2009]

Supporting Affordable Housing through Tax Credit Syndication
Community Affordable Housing Equity Corp (CAHEC) is a 501(c)(3) nonprofit low-income housing tax credit syndicator serving Alabama, the District of Columbia, Florida, Georgia, Kentucky, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia. CAHEC works to create and maintain affordable rental and ownership housing in the areas it serves. Since its creation in 1992, CAHEC has developed more than 7,300 units of affordable housing. CAHEC also provides a number of supportive programs designed to assist the residents of the developments it has helped to finance.

As a tax credit syndicator, CAHEC structures equity funds using investors' capital. CAHEC's most recent fund is the South Carolina Preservation Fund II LP (SCPF II). SCPF II is a $32 million equity fund designed to preserve and renovate a portfolio of older, multifamily housing properties in South Carolina. The targeted portfolio includes 41 properties with a total of 1,548 units. Although all investments in SCPF II were fully subscribed in 2008, banks can invest in other CAHEC equity funds as they are developed. To learn more, visit their Web site or e-mail Dana Boole or call (919) 788-1803.
[Community Developments Investments , Spring 2009] Small Loans, Big Returns
Ways to Work (WtW) is a nonprofit, community development financial institution that helps lower-income people. WtW is designed to help borrowers attain financial independence and advance economically by having money to purchase dependable used cars to get to work or school. Since 1996, WtW has originated nearly 12,000 loans for more than $31 million and the average auto loan amounts to an average $3,400. Results of a 2006 WtW evaluation indicate that borrowers reported an average increase of 41 percent in their take-home pay. In addition, 67 percent of WtW borrowers report that they have used conventional financial services subsequent to receiving their WtW loans.

Headquartered in Milwaukee, WtW makes its loans from 43 offices in 21 states: California, Delaware, Florida, Hawaii, Illinois, Indiana, Louisiana, Maryland, Michigan, Minnesota, Missouri, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Virginia, Washington, and Wisconsin.

WtW offices are located in social service agencies affiliated with the Alliance of Children and Families (ACF). ACF agencies screen and provide financial education to borrowers and service the loans. WtW local offices provide financial education to more than three persons for every individual who receives a loan. Investors in WtW include several national foundations, the Community Development Financial Institution Fund of the U.S. Treasury Department, local United Way offices, and financial institutions. Banks can be involved by investing in the national WtW loan fund, by referring to local WtW offices prospective borrowers who do not meet conventional credit criteria, by participating in local WtW loan committees, and by providing grants and in-kind donations to WtW.

For more information, contact President Jeff Faulkner at (414) 359-1448 ext. 2, e-mail him, or visit his Web site.
[Community Developments Investments, Fall 2008]

Baltimore Redevelopment Efforts Get $50 Million Boost
Harbor Bankshares Corporation recently received a $50 million new markets tax credit allocation to enhance community development loan funds supporting revitalization and reinvestment in the city of Baltimore. The new investment funds will benefit both affordable housing development and small business financing, including a partnership with Fannie Mae to construct owner-occupied housing in targeted low-income communities and a commercial loan fund to help finance large scale mixed-use projects. Harbor Bankshares indicates that the flexibility of the tax credit program will allow it to expand its product mix to include loans with longer amortization periods, longer interest-only periods, and higher loan-to-value ratios.

For more information, contact William Rice of Harbor Bankshares at (410) 675-5722.
[Published in News from the Districts, Community Developments Investments , Fall 2004]