CNY Community Foundation - Impact Investing Profile: Home HeadQuarters
A $500,000 Program Related Investment (PRI) to Home HeadQuarters (HHQ) acted as a loan loss reserve to backstop first mortgages for new, first-time homebuyers in the city of Syracuse.
In 2019, the Community Foundation committed a $500,000 Program Related Investment (PRI) through its LeadSafeCNY initiative to Home HeadQuarters (HHQ). The PRI acts as a loan loss reserve to backstop any losses on first mortgages HHQ would provide to new, first-time homebuyers in the city of Syracuse. This has played a crucial role in HHQ’s mission to enhance homeownership opportunities and transform neighborhoods.
Our impact investment to HHQ was in the form of a loan loss reserve that helped guarantee loans provided to 44 homebuyers purchasing homes in some of Syracuse’s most under-resourced neighborhoods. Should a mortgage result in foreclosure, HHQ would assume the property and loan, make renovations and resell the property. If the sale resulted in a loss, the Community Foundation would provide HHQ with funds from the loan loss reserve to cover any shortfall. HHQ used our reserve commitment to leverage $4.2 million in loan capital from banks and credit unions.
The loan loss reserve provided enough funds to guarantee 44 home purchase loans. These loans, averaging around $100,000 each, have injected over $4 million of capital into neighborhoods, helping aspiring homeowners transition from being renters to proud property owners. So far, none of the loans have gone into default, thanks in part to HHQ’s homebuyer education program that provides new owners with the skills and knowledge necessary to maintain their mortgages in good standing.
The loan loss reserve was set up to guarantee first mortgages made to homebuyers in and around census tracts 54 and 23, encompassing zip codes 13205 and 13203. These areas are affected by poverty, high unemployment, high rates of childhood lead poisoning and stagnant housing values due to public and private disinvestment, racist urban planning and housing policies, and racial inequity. According to HHQ officials, this approach ensured that they, along with city planners, are creating stable neighborhoods and an improved quality of life for residents living with fewer access to opportunity.
Buyers have been first-time homeowners coming out of public housing or rental properties. Eighty percent of program participants are individuals from historically excluded and under-banked communities. Many face challenges in accessing traditional bank financing due to lower credit scores, higher debt ratios and depressed property values in neighborhoods suffering from years of disinvestment. HHQ’s program is leveling the playing field and empowering individuals to achieve their dream of homeownership.
While HHQ has originated all of the first mortgage loans to be guaranteed by our initial PRI, organization leaders hope to scale up the success of this pilot program through additional PRIs to guarantee both first mortgage, home improvement and small business financing. We are proud to partner with HHQ to foster social and economic equity and help transform neighborhoods into stable, owner-occupied communities.
Our impact investing program provides sustainable long-term benefit to the community while preserving capital and attaining a modest financial return. We engage in this practice by carefully selecting opportunities such as loans, equity investments, guarantees or recoverable grants that align with our mission and contribute to the betterment of Central New York. Learn more at cnycf.org/impactinvesting.