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Healthy Futures Fund Goals2
PROVIDE NEW CAPITAL to Federally Qualified Health Centers (FQHCs) at a time of significant patient growth
ENCOURAGE COMMUNITY DEVELOPMENT ORGANIZATIONS & COMMUNITY HEALTH CARE PROVIDERS to work together on mutually beneficial programs that improve the health of low-income individuals and families
EXPAND HEALTH CARE PROGRAMS & SERVICES available to tenants in projects financed with Low Income Housing Tax Credits
UTILIZE MORE EFFICIENT STRUCTURE for New Markets Tax Credit to finance health centers, in an effort to reduce transaction costs & better leverage capital from investors
Capital Sources3
$50 million in Low Income Tax Credit Equity for affordable housing developments incorporating health care programs and services
$43 million FQHC Financing Fund for health center construction and permanent financing
$4 million in predevelopment financing for health center and affordable housing projects
$800,000 in grants supporting Healthy Futures Fund goals:
Expected Community Impacts
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6-7 affordable housing projects financing 500 new housing units with incorporated health services
7-8 new health center sites expected to serve 75,000 individuals and create 200 temporary and 1,200 permanent jobs
New partnerships between health centers, affordable housing providers and other community stakeholders focused on improving the social determinants of health and creating healthy communities
New capital source for investment in health centers with a goal of deeper understanding of the credit risks of health centers and additional investment in the future
Healthy Futures Fund Partners Founding partners:
The Kresge Foundation
LISC Morgan Stanley
Fund manager: New Markets Support
Company (a LISC subsidiary)
Health Center Technical Assistance Partner Capital Link
Current fund partners: National Development
Council NCB Capital Impact Opportunity Finance
Network Other partners:
Coastal Enterprises, Inc. Primary Care
Development Corporation
Mercy Loan Fund Community Health
Center Capital Fund
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FQHC Financing – What is a FQHC
Non-profit 501(c)(3) organizations that are community-based
FQHCs provide comprehensive community-based primary and preventive health care services (medical, dental, behavioral health)
Governed by 51% community boards (registered patients of health center);
Accessible to everyone, regardless of financial means, offering a sliding-fee scale
Are located in a HRSA-designated Medically–Underserved Area or serving a Medically Underserved Population
FQHC is eligible for cost-based reimbursement and operating support from the federal government.
FQHC Financing - Eligibility
Priority sites: First priority to LISC markets: 31 program
cities and Rural LISC program areas Partner CDE markets
Eligibility based on FQHC location in qualified census tract Call with FQHC location or look up at:
http://www.newmarkets.org
FQHC Financing - Terms8
First mortgage loans from $2.5 million to $10 million
Total financing up to 80% LTV w/ 1.20 DSCR 7-year initial term, with first 30 months
interest-only then 19-year amortization schedule
Renewal options for a 2nd 7-year term Rate fixed at 7-year LIBOR swap + 200 to 250
basis points for 7 years At least 20% of the total loan to borrowers will
have the ability to be cancelled (through a put-call structure) upon successful third-party refinance of the remaining principal balance
FQHC Financing – Benefits Compared to Standard NMTC Financing
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Committed Sources of Capital Financing Product with Pre-Established
Terms & Documentation Dramatically Reduce Borrower Need to
Retain Consultants and / or Develop Internal NMTC Expertise
Lower Transaction Costs Shorter Closing Process
FQHC Financing - Examples10
New construction of a stand-alone health center to consolidate sites and expand services for health center serving rural area and migrant farm workers;
Renovation of ground floor commercial space in supportive housing project for a satellite health center to deliver both behavioral health and primary care services;
Renovation and expansion of ground floor commercial space for primary care services, including updating of space to accommodate more efficient flow and delivery of preventive services.
New construction of mixed-use project, with affordable housing and FQHC components.
LIHTC Fund Overview11
Purpose: to expand health care programs and services
available to tenants in LIHTC developments to encourage affordable housing developers to
work with FQHCs and other community-based health care providers to promote the health of low-income tenants
Project requirements and priorities: Projects must be located in a LISC market Project sponsor must partner with a local primary
health care provider
LIHTC Fund – Health-related requirements Projects must have clear links to a local
FQHC or other community-based health center or on-site health center
Potential links include: Health screenings, physicals, check-ups,
nutrition counseling available at affordable housing site;
Hire a part-time services coordinator to coordinate access to services; or
Transportation to a local health center in substitution for on-site services.
LIHTC Fund – Examples
Michigan - Lloyd House was closed into the Healthy Futures Fund on April 26, 2013. The Bay Area Medical Center will establish an outreach program that will connect Lloyd House residents to primary care services.
Minnesota - The next deal slated to close is the Rolling Hills Apartments, a 108 unit apartment complex that will provide affordable rents for workforce housing managed by Lutheran Social Services of Minnesota (LSS). LSS will be providing services to refugee families and making space available to other community partners, including West Side Community Health Services for tenant health care screenings.
Grants for Project Sponsors
$800,000 in pass-through grants for health centers and/or housing sponsors
Average grant size of $25,000 - $50,000 per project
Anticipated uses: Health/housing linkages to connect tenants to health
services and promote health and wellness, including: Increasing resident access to health facilities Facilitating provision of preventive health services in housing
developments Community outreach to increase awareness about the
availability and benefits of preventive health services, good nutrition and active living
Project planning, design and/or predevelopment
