From dealflow to a lack of education, this week leaders in social finance addressed some of the key barriers preventing the UK market from flourishing. Last month Antony Bugg-Levine, the chair of the Global Impact Investing Network, told delegates at London’s Critical Mass conference that in the world of social finance there were “hypers, haters and […]Read More ›
2 New Impact Finance Tools For Affordable Housing
When governments can’t or won’t invest more in affordable housing, is there another path to finance the new homes families need?
The answer is yes, with the recent launch of the Trillium Housing Bond.
This community bond, with a 5.5% p.a. interest, will be used by Trillium Housing Non-Profit to invest in new affordable ownership housing. These investments will be made in project with quality developers and will only be made in developments that meet minimum housing price thresholds.
Designed for impact investors, the Trillium Housing Bond will repay the loan principal and accumulated interest at the end of 5 years. It is designed to provide the investor a competitive bond rate as well as meaningful community impact. The bonds will be secured through a mortgage on the land under development.
But not only does Trillium Housing invest in the development of new affordable housing, it also leverages those investments to fund the Trillium 2nd Mortgage, a new tool for the creation of housing affordability for income eligible purchasers.
What makes Trillium developments unique?
Trillium Housing developments are set apart is their entry level price point and the availability of the Trillium 2nd Mortgage. A Trillium Housing investment in a development gives the developer partner a unique competitive advantage – the ability to sell affordable units to families who otherwise can’t afford the product and would be turned away. With higher sales absorption, the Trillium Housing investment can make the overall development more affordable and more profitable at the same time – a win/win/win/win situation for the developer/home purchaser/bond investor/Trillium Housing.
With the availability of the Trillium 2nd Mortgage, purchasers achieve their goal of home ownership, many of whom are finding it harder and harder to break into the home ownership market. The Trillium 2nd Mortgage is a housing affordability financial tool. It is structured as a shared appreciation (no set interest rate) mortgage which is payment free until resale of the home or other prescribed criteria. It is similar to the mortgages provided under Ontario’s Investment in Affordable Housing program.
What’s the bottom line?
Our goal is to raise $8.5 million and to invest in 7 projects which would produce over 800 units of affordable housing and provide the Trillium 2nd Mortgage to over 300 income eligible families. Put simply, Trillium Housing Bonds provide investors with the unique opportunity to build their investment portfolio while they build their community.
– Editor’s Note: This information is to be used for informational purposes only. This piece is not a solicitation of funds for investment. SF.ca does not assume any responsibility for the use of such information.