Avenues issue 3 web

ISSUE 3 - 2017

An in depth look at

FEDERAL HOME LOAN BANKS

Cinnaire 1118 S. Washington Avenue Lansing, MI 48910

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TABLE OF CONTENTS A Note From Mark............................................4

By Mark McDaniel FHLBanks: A Model That Works...................6

By David Jeffers Enduring Mission, Evolving Methods........ 10

By Suzi Thackston Beyond AHP.................................................... 14

By John Bendel Open Doors..................................................... 18

By Beto Sanchez and James Dow Impact.................................................. 24 Culture................................................. 27 Advertisers........................................... 31

| PRESIDENT’S MESSAGE

a note

FROM MARK

Early in my career I heard about this mysterious institution called the Federal Home Loan Bank of Indianapolis (FHLBI). I never gave it much thought. I would read about it and was always left with confusion of what their real purpose was. My awakening came in the early 1990’s when I met Fred Hash who was a Community Investment Officer for the FHLBI. Fred took the time to educate me in layman’s terms what the Bank does and how it strives to support affordable housing and community development through making capital available to member institutions in Michigan and Indiana.

It opened a world to me that has been valuable to the work I have done in that field since. Fred was so helpful and inclusive for me in making member visits and events that got me to be a big supporter and spokesperson for the FHBLI. I was appointed to the Affordable Housing Advisory Council for six years serving at the end of my term as the Chairman of the Council. It was an experience I have always valued and made me a champion of all the FHLBI system has to offer.

As a Community Development Finance Institution (CDFI), we were eligible to become a member of certain FHLB systems. The FHLB of Chicago was one of those that accepted CDFIs as members. We joined the Chicago Bank in spring of 2015 and are glad we did. As a member, we are eligible to apply for affordable housing program grant funds. We

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have received $3M in Community First Fund dollars (low-interest, 10-year loan) and $6,967,000 in Affordable Housing Program (AHP) grants to date in grant funding to support communities in Wisconsin and Illinois. We also are preparing to access their Community Investment Program funds to provide competitively priced loans to support development efforts.

This edition of Avenues will give the reader an excellent primer on what the FHLB system in general has to offer and why they exist to serve. In addition, there are summaries of what each of the system banks have to offer to the nine states Cinnaire serves.

The FHLB is a great partner and source of development capital that should be utilized. Working with member institutions in your state will be a valuable effort as capital resources get tighter and tighter. Cinnaire can be very helpful in giving you guidance on how to access the system serving your state. They are great partners, so take advantage. It’s a model that works!!

Mark McDaniel CINNAIRE

Ginosko Development Company “Building a Brighter Future Today” Ginosko Development Company (GDC) is a real estate development company specializing in the creation and preservation of quality affordable housing. GDC has a successful track record meeting the financing challenges of these developments, from MSHDA and HUD loan programs, tax-exempt bond programs, rental subsidy programs, and Low-Income Housing Tax Credits; to historic tax credits, brownfield credits and other specialized financing programs unique to the affordable housing industry. GDC is also known for its success in meeting the design, planning and environmental challenges of these developments. GDC’s residential communities are recognized for careful and coordinated planning, an experienced development team of top architects, attorneys, contractors and engineers, attention to detail and design quality, and respect for the environment. Visit our website to get to know us better!

www.Ginosko.com 41800 West 11 Mile Road, Suite 209 | Novi MI 48375 office 248.513.4900 | fax 248.513.4904

| FEATURE

fhlBanks A Model That Works

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reated by Congress, the FHLBanks have been one of the largest sources of funding of financing housing and economic development in communities for eight decades.

The FHLBanks are 11 regional cooperatives owned by their members which are 7,000 community banks, credit unions and other financial institutions. Their purpose is to be a reliable source of liquidity for their members 6

to support housing finance and community investment. Their total assets exceed $1 trillion.

Every day across the country, financial institutions must make decisions about how to fund home mortgages for families and loans to small businesses that are expanding and creating jobs. By harnessing the collective power of their members, they bring the global credit markets to Main Street America. Financial institutions

know they can rely on the System as a stable source of funds through all market cycles. The 2008 credit crisis was the most recent illustration of the importance of the System. They increased their advances outstanding to over $1 trillion while other sources of funding dried up. As a cooperative, they and their members have the unique ability to play a critical role in continuously building, sustaining and nurturing communities even when the credit environment tightens.

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They are regionally focused and controlled. This structure allows each to be responsive to the specific community credit needs in its region. At the same time, they collectively use their combined size and strength to obtain funding at the lowest possible cost for their members. This structure means that the member banks can advance credit to their local communities at competitive rates.

MEMBERSHIP AND STRUCTURE Community banks, thrifts, commercial banks, credit unions, community development financial institutions and insurance companies are all eligible for membership in their region’s FHLBank. Members — ranging in size from some of the largest financial institutions in the world to banks with just a single branch — do business throughout the U.S. They are privately owned by their members. To become a member, a financial institution must purchase stock in their region’s FHLBank, which is held at par value and not traded. As cooperatives, they do not have the pressures of generating high rates of return, as do publicly traded companies. Instead they pass on the benefits of low-cost borrowing to their members — who subsequently pass these savings on to individuals, families, businesses and communities.

FUNDING THEIR MEMBERS Their primary purpose is to provide members with short- and long-term funding through secured lending programs. This addresses a key risk of bank management: the unexpected need to fund new assets and deposit withdrawals. Financial institutions are limited in how they can meet funding needs. They can raise new deposits, cut expenses, sell assets, limit new lending or access credit markets.

However, it takes time to attract new deposits and it can be prohibitively AVENUES TO AFFORDABILITY

expensive — especially for smaller institutions, which rely almost entirely on their local customers for new deposits. The capital markets are typically the most efficient way to raise funds in a timely manner, but most small community banks are not able to access the credit market on their own.

For many of its member banks, FHLBanks are the most cost-effective way for them to access the credit market.

Loans to members — called “advances” — are a nearly instantaneous way for members to secure funding. They access the capital markets several times a day to provide their members with funding. The size and ability to issue a variety of debt products enables them to tailor the structure of advances to a member’s particular funding strategy.

To qualify for advances, a member must pledge high-quality collateral in the form of mortgages, government securities or loans on small business, agriculture or community development. The member must also purchase additional stock in proportion to their borrowing. Once the member’s FHLBank approves the loan request, it advances those funds to the member institution. As of June 30, 2017, the FHLBanks had $706.8 billion in outstanding advances.

OFFICE OF FINANCE Through the Office of Finance, they access the international capital markets daily to provide members with funding. The Office of Finance manages several flexible funding programs that are designed to meet the needs of a broad group of investors. Bonds and discount notes issued by the FHLBanks are called consolidated obligations. They issue discount notes in maturities ranging from one day to one year, and bonds with maturities of six months to 30 years. Most of issues are between one and five years.

Issue size can range from 10 million to several billion dollars. Debt is sold through a broad, international network of underwriters.

Buyers of debt securities issued by them represent the entire spectrum of domestic and international fixed-income investors, including commercial banks, central banks, money market funds, investment managers, major corporations, pension funds, government agencies and individuals.

CAPITAL POSITION No taxpayer funds are involved in the operation of the cooperatively owned FHLBanks. Each region is uniquely self-capitalizing. During times of high advance activity, capital automatically increases. As advances roll off the 7

| FEATURE FHLBanks have created other, voluntary programs for affordable housing, small business lending, foreclosure prevention and financial literacy. books, they typically reduce capital accordingly through member stock repurchases.

In 2011, they launched a joint plan to enhance capital and strengthen safety and soundness even further. The System Capital Initiative calls for each to reserve 20 percent of its earnings in a restricted retained earnings account.

This plan demonstrates that they are a mechanism for economic stability — staying strong and serving community lenders as a dependable source of funds for housing, jobs and growth.

SAFETY AND SOUNDNESS In more than eight decades, they have never incurred a credit loss on an advance. This remarkable record can be attributed to the full collateralization of all advances, conservative underwriting standards and strong credit monitoring policies. If a loan in a pool of collateral is under-performing, it must be replaced.

Additionally, the credit profiles of members are actively monitored.

They are jointly and severally liable for their consolidated obligations. That means that in the unlikely event that one was unable to pay a creditor; the other 11 FHLBanks would be required to step in and cover that debt. This provides an additional level of safety and ensures prudent borrowing throughout them. In 2001, the Government Accountability Office noted, “Joint and several liabilities for the payment of consolidated obligations gives investors confidence that [FHLBank] System debt will be paid.”

OTHER SERVICES TO MEMBERS In addition to being a reliable and ready source of liquidity, they also assist their members with interest rate risk management, asset/liability management, education and reducing earnings volatility.

They provide letters of credit for bond issuances guaranteed by members and mortgage programs. Through letters of credit, individual FHLBanks pass through their credit ratings to member institutions, while pledging to be a credit backstop. They also offer mortgage purchase programs that provide competitive alternatives to the secondary market by taking the interest rate risk of mortgage loans, while members retain a portion of the credit risk and customer relationships.

AFFORDABLE HOUSING AND COMMUNITY INVESTMENT PROGRAMS They contribute 10 percent of their net income to affordable housing through the Affordable Housing Program (AHP). This competitive grant program is the largest source of private sector grants for housing and community development in the country. Member banks partner with developers and community organizations seeking to build and renovate housing for lowto moderate-income households.

Through these partnerships, they have awarded more than $5.4 billion that has assisted in the purchase, construction and rehabilitation of more than 827,000 units of affordable housing. To ensure that AHP-funded proj-

ects reflect local housing needs, each FHLBank is advised by a 15-member Affordable Housing Advisory Council for guidance on regional housing and community development issues.

AHP is a flexible program that uses funds in combination with other programs and funding sources, like Low-Income Housing Tax Credits and Community Development Block Grants. These projects serve a wide range of needs. Many are designed for seniors, persons with disabilities, homeless families and individuals, first-time homebuyers and others with limited resources. FHLBanks are the largest single funder of Habitat for Humanity.

Each operates a Community Investment Program (CIP) that offers below-market-rate loans to members in need of long-term financing for housing and economic development that benefits low- and moderate-income families and neighborhoods.

Between 1990 and 2016, the CIP funded approximately $59.2 billion in housing advances and approximately $7.6 billion in economic development advances, benefitting more than 839,000 families as well as hundreds of community development initiatives in very low, low- and moderate-income neighborhoods.

In addition, several of them have created other, voluntary programs for affordable housing, small business lending, foreclosure prevention and financial literacy.

GOVERNANCE AND REGULATION Each has its own board comprised of members of that FHLBank and independent (non-member) directors.

By statute, two-fifths of the directors must be independent and at least two of those directors must be public interest directors with at least four CONTINUED ON PAGE 31

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CINNAIRE

Develop Michigan News

DMI Funds the Rehab of Detroit’s Historic Element Metropolitan Hotel

DMI is a strategic partnership between Cinnaire Corporation, MI Strategic Fund, the Development Finance Group and its private partners.

DMI is a key financing partner for commercial real estate developers committed to fostering economic development and driving economic progress in Michigan.

Develop Michigan (DMI) funded a $5.6 million second mortgage for the rehab of the Element Metropolitan Detroit Hotel. The Element has been vacant for 40 years — the longest vacancy of any building in the area — and the rehab is a key element in the revitalization of the Detroit Central Business District. The funds will support the rehab of the 110-room extended stay hotel and first floor retail operations. The property is located in the Detroit Central Business District. The project will also incorporate New Market Tax Credits (NMTC), Federal Historic Tax Credits and a Community Revitalization Program (CRP) Loan. Since 2015 DMI has closed more than $21 million in commercial real estate loans in developments to revitalize the City of Detroit.

DMI has capital sources to invest in a range of real estate property types in Michigan: • • • • •

Mixed-Use Commercial and Residential Single and Multi-tenant Office Buildings Light Industrial Facilities and Warehouses Not for Profit Community Facilities Retail

In the past three years, DMI has provided financing of more than $40 million to fund 14 developments. To learn more, visit us at developmichigan.org.

DMI seeks out projects that have significant impact on low-or moderate- income communities, either through the jobs that are created, workforce housing, or elements of the project that support community revitalization or economic activity.

AVENUES TO AFFORDABILITY

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| FEATURE

ENDURING MISSION, EVOLVING METHODS After 28 Years, the FHLBank Chicago Is Still Finding New Ways to Support Members’ Communities

BY SUZI THACKSTON FEDERAL HOME LOAN BANK OF CHICAGO

Community investment is at the heart of the Federal Home Loan Bank of Chicago’s mission. Because we are focused on serving our member financial institutions, their commitment to the communities they serve is our commitment, too. We’re proud of the work our members do and the partnerships they create to benefit their

and economic development through our Discounted Advances program (formerly known as Community Investment Cash Advances)—over $1 billion in 2016 alone.

As pleased as we are with this progress, we know there is more to be done. We are working to increase awareness of FHLBank Chicago Community Investment programs among member institutions and their communities, as well as community development organizations that could join in these initiatives. In 2016, our staff sponsored, hosted, or participated in 89 conferences, ribbon cuttings, we-

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strong communities; people also need things like steady jobs, good schools, healthcare, access to fresh fruits and vegetables, and safe places to live and work. To create meaningful change, we must address these needs.

To make the greatest impact, we must provide funding that is outcomes-focused, flexible, and responsive to local needs. By offering support at the organizational level (in addition to funding individual projects), we can free our community partners to make the best use of their local knowledge and hands-on experience.

It takes more than stable, affordable, high-quality housing to build strong communities; people also need things like steady jobs, good schools, healthcare, access to fresh fruits and vegetables, and safe places to live and work. communities, and we believe that by working together as a cooperative, we are able to accomplish far more than we could separately.

For the past 28 years, the FHLBank Chicago has leveraged this collective strength to promote affordable housing and foster homeownership in and beyond our District of Illinois and Wisconsin. Since the Affordable Housing Program (AHP) was created in 1989, we have awarded more than $401 million in competitive AHP grants and over $156 million in DownPayment Plus® (DPP®) Program funds, supporting the creation, rehabilitation, or purchase of more than 106,000 units of affordable housing. We have also provided over $9.7 billion in community lending to finance housing 10

binars, workshops, and other events to raise awareness and foster new relationships with these stakeholders.

In addition to spreading the word about our activities, the FHLBank Chicago Community Investment group actively identifies unmet needs and new opportunities in our District, monitors market conditions, and gathers feedback from members and community partners. In recent years, these conversations have taught us valuable lessons that have changed our approach to community investment.

A NEW VISION Among the lessons we’ve learned, three stand out: • It takes more than stable, affordable, high-quality housing to build

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To build and sustain thriving communities, we need more than a collection of independent organizations—we must develop strong partnerships and, ideally, entire networks of funders and community organizations linking their strengths and resources to achieve greater things.

These lessons have inspired a fundamental shift in the FHLBank Chicago’s approach to community investment, broadening our traditional focus on affordable housing to include economic development and other factors essential to communities’ health and growth. Of course, we continue to provide our members with project gap financing, access to down payment assistance for qualified homebuyers, CINNAIRE

and support for community lending initiatives through our competitive AHP, DPP, and Discounted Advances programs, respectively; but we are also looking for new ways to collaborate with our members and their community partners in the development of more comprehensive, holistic solutions.

THE COMMUNITY FIRSTÂŽ PROGRAMS This shift in focus has prompted us to realign our existing Community Investment programs and to create a series of initiatives known as the Community First Programs: Community First Fund Unique within the Federal Home Loan Bank System, the Community First Fund may be the most striking exam-

ple of the FHLBank Chicago’s innovative approach to community investment. This $50 million revolving loan fund provides direct support to community development financial institutions (CDFIs), community development loan funds (CDLFs), and state housing finance agencies serving Illinois and Wisconsin. We developed the fund in consultation with these types of organizations, who told us they needed access to lower-interest-rate, longer-term financing. By providing this funding at the organizational level, rather than allocating funds for specific projects, we give our partners the freedom to employ their expertise, use their knowledge of the local environment, and address the needs they see on the ground. Best of all, as loans are paid back, we are able to continue lending to more community

development organizations.

As of July 31, 2017, the Community First Fund committed $44 million in financing to nine partner organizations.

These organizations were chosen (in part) for their comprehensive approach to community development, not just in terms of the products and services they offer, but also in their collaboration with their local FHLBank Chicago member financial institutions and other community stakeholders like affordable housing providers, nonprofits, small businesses, and community facilities. In this way, the Community First Fund not only provides vital organizational-level funding to meet local needs, but it also encourages the kinds of partnerships we know are necessary to create positive, sustainable change.

Karl L. Gotting Kenneth W. Beall Michael G. Oliva Michael H. Rhodes Jeffrey L . Green Kevin J. Roragen Richard W. Pennings Ted S. Rozeboom Tracey L . Lackman Michael G. Stefanko

OVER 45 YEARS OF EXPERIENCE IN AFFORDABLE HOUSING Representing developers and syndicators before the Michigan State Housing Development Authority, and numerous other state financing agencies, U.S. Department of Housing and Urban Development, USDA Rural Housing and municipalities,

124 W. Allegan, Suite 700 Lansing, Michigan 48933 Phone 517.482.2400 www.loomislaw.com

AVENUES TO AFFORDABILITY

and with private lenders, including projects receiving LIHTC, historic and new markets tax credits.

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| FEATURE Community First Disaster Relief Program Originally created as a response to the tornados and severe storms that damaged many Illinois communities in 2013—as well as a blueprint for the FHLBank Chicago’s response to future disasters—the Community First Disaster Relief Program is the Bank’s way of standing by our members as they support their communities in times of crisis. Through our member financial institutions, the program provides direct relief funding to eligible households and businesses in Illinois and Wisconsin communities declared as disaster areas by the Federal Emergency Management Agency (FEMA).

In 2016, the fund provided $378,400 via 76 grants through local FHLBank Chicago members to households and businesses in central and northern

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Wisconsin counties affected by severe storms, flooding, and mudslides.

The Community First Disaster Relief Program builds on our existing community lending and grant programs, adding a new grant component that gives our member institutions the flexibility to provide timely assistance to homes and businesses when they need it most.

Community First Awards The FHLBank Chicago created the Community First Awards to celebrate the success of our members and their local partners, to highlight the crucial role of partnerships between financial institutions and community organizations, and—we hope—to inspire more of these connections. Nominations are solicited from our members and

awards are presented on a yearly basis in the following categories: • The Partnership category recognizes the ongoing efforts of a multidisciplinary team of stakeholders to achieve positive and long-lasting change.

• The Project or Program category spotlights an outstanding project or innovative program that supports a broader community or economic development strategy.

• The Pioneer category honors an individual who has demonstrated a career-long dedication to community or economic development activities.

• The Emerging Leader category recognizes the promise of an individual new to the affordable housing or community development field.

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Community First Capacity-Building Grant Program Nonprofit lenders have told us they often find it difficult to obtain the operational funding they need to expand their capacity and maximize their impact. The newest addition to our suite of Community Investment programs, the Community First Capacity-Building Grant Program, was introduced earlier in 2017 to fill this funding gap.

By partnering with their local FHLBank Chicago members, qualifying nonprofit CDLFs, CDFIs, and community development corporations can apply for Community First Capacity-Building Grants to pay for eligible expenses like market research for program expansion, staff professional development, creation or expansion of a strategic plan, enhancements to information technology systems, or improvements to financial or outcomes reporting (to name just a few). With this program, the FHLBank Chicago aims to empower community development lenders to serve more organizations and businesses throughout our District; to enhance their operations, services, and product offerings; and to develop strategic partnerships with FHLBank Chicago member institutions in their area.

OUR EVOLVING APPROACH The FHLBank Chicago’s mission hasn’t changed: we are a member-focused Bank, and that focus will always include support for our members’ community investment activities.

However, to pursue this mission effectively, we need to continually reassess our approach, evaluating changing conditions in our District, listening to our members and their community partners, and finding new ways to help them cultivate healthy, growing neighborhoods and economies. This process is ongoing, which means even more innovations are on the horizon—and that’s great news for Illinois and Wisconsin communities.

AVENUES TO AFFORDABILITY

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| FEATURE

Beyond

AHP

DISCRETIONARY PRODUCTS ENHANCE COMMUNITIES

BY JOHN BENDEL FHLBANK PITTSBURGH

Our employees understand that the work we do impacts our financial performance, thus our AHP contributions.

In yearly internal surveys, employees rank AHP as one of the key benefits of working at FHLBank Pittsburgh.

FHLBank Pittsburgh considers the Affordable Housing Program (AHP) the jewel of our community investment products. In the 27 years since our first AHP funding round, FHLBank Pittsburgh has provided nearly $305 million in grants to help make housing affordable for 47,286 households.

In addition, we carve out 20 percent of the AHP funding for First Front Door, a product designed to help qualified first-time homebuyers at or below 80 percent of the area median income with down payment and closing cost assistance. First Front Door offers $3 in grant assistance for every $1 provided by the buyer, up to a maximum of $5,000.

We are required to fund AHP every year. We take great pride in the aggregate impact we, along with the 10 other FHLBanks, have been able to make.

Consistently, we have seen homebuyers who have sufficient monthly income to support a mortgage payment, but lack the upfront money to pur-

MURALS AND GARDENS BRING NEW VITALITY TO THE BLUEPRINT COMMUNITY OF PRINCETON, W. VA. 14

chase the home. With First Front Door, our member financial institutions can help their customers (14,340) achieve homeownership.

We also have programs that are discretionary. These programs are up to executive management and our Board to authorize and oversee, and operate successfully. Most FHLBanks have various discretionary programs, for us, they are Banking On Business and Blueprint Communities®.

BANKING ON BUSINESS Small business is a key employment engine and crucial driver of community growth and development. Yet often, small business owners, even those with good business plans and solid management, find it difficult to meet the underwriting standards of local lenders. That’s where Banking On Business (BOB) comes in, providing unsecured, secondary loans to borrowers who need help with their equity, collateral or loan-to-value in order to qualify for a commercial loan. We call it “recoverable assistance” to help make the loan bankable for the lender.

BOB was designed to be good for both the small business and the lender (FHLBank Pittsburgh’s member financial institution). In addition, BOB’s repayment terms are favorable to the borrower: no payments due in year one and no fees. For our members, a solid commercial loan is not the only advantage of BOB; they also enjoy a new business relationship with cross-selling opportunities, CommuCINNAIRE

nity Reinvestment Act credit and the opportunity to strengthen the local economy.

Since the product was launched in 2000, BOB has provided more than $61 million to help 662 small businesses preserve or create 8,639 jobs in Delaware, Pennsylvania and West Virginia. Thriving businesses that create jobs and opportunities to improve communities.

One example is Edible Earth Farm in western Pennsylvania’s community of Sandy Lake. Owned by April Parker with her husband Johnny, Edible Earth grew from a five-acre micro farm at their summer cottage in 2010 to an 85-acre vegetable, fruit and meat business today. Although prior loans had come easily when Johnny was director of Information Technology at Carnegie Mellon University, qualifying for a commercial loan was problematic after he left a six-figure salary at a prestigious university to help April run a certified organic farm.

Mercer County State Bank and BOB.”

Blueprint Communities®.

BLUEPRINT COMMUNITIES® Our most innovative community investment initiative, unique in the FHLBank system, is Blueprint Communities®. The program provides a variety of tools to help older communities develop their own plans for revitalization: in other words, an individual “blueprint” for success.

All Blueprint Communities® have certain things in common. First, they must create community teams that include an FHLBank Pittsburgh member financial institution, a local government official, a developer and a community-based organization. Teams often add community representatives from the chamber of commerce, schools, real estate and, several times, youth ambassadors. Second, the teams must commit to a year-long training curriculum developed by one of our partners such as the University of Delaware’s Center for Community Research and Service or the Pennsylvania Downtown Center, and each team must develop a Community Plan.

The training starts with a “Banner Day” kick-off ceremony where the teams

Strength in the areas of leadership, collaboration and development, combined with sound local planning and coordinated investments by public and private funders, can help re-emerging communities to thrive. Since the program launched in 2005, 58 communities across each of the states in our footprint – Pennsylvania, West Virginia and Delaware – have been designated

Hoping that a local community bank with experience in agricultural lending might provide a solution, Johnny and April called on Mercer County State Bank (MCSB). But even considering the farm’s exemplary record of creditworthiness, steady growth and conservative business plan, the numbers just didn’t work – until MCSB suggested BOB. In addition to doubling acreage and building infrastructure, Edible Earth planned to increase staff from five to seven the first year and possibly to 12. MCSB president and CEO Ray Kaltenbaugh explained that $129,000 in BOB funding brought the loan up to their underwriting standard, and April and Johnny relocated to the 85-acre property in time for this year’s spring planting. Johnny Parker summed it up by saying, “We’ve been tremendously blessed. I can’t imagine there’s any way we’d be here without AVENUES TO AFFORDABILITY

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| FEATURE FHLBANK PITTSBURGH’S BANKING ON BUSINESS PRODUCT WAS INSTRUMENTAL IN HELPING EDIBLE EARTH FARM EXPAND AND CREATE JOBS.

are inspired by local leaders – often a U.S. senator or their governor – and receive a huge Blueprint Communities® banner to hang across the main street back home in their community.

Upon completion of the training and their Community Plan, each team remains eligible for Blueprint Community® benefits for a period of up to ten years. Those benefits include additional technical assistance and coaching, mini-grants to help fund initial activities in the Community Plan, and access to the full suite of FHLBank Pittsburgh’s community investment products.

ferences – which reflect the unique characteristics of each Blueprint team – are what make this initiative truly special. Flexibility built into the Blueprint program allows each team to asses its strengths and needs and to develop its Community Plan accordingly. The Blueprint Community® of Curwensville, Pa., for example, was selected as one of 10 communities in six states to participate in the Cool and Connected planning assistance program to expand broadband services for a connected, economically vibrant rural community.

The common elements define the Blueprint experience, but the dif-

Where Curwensville uses technology to enhance its Community Plan, in

Princeton, W. Va., the focus is a community identity involving the arts and a sense of place. Their plan included murals and gardens, and events such as movie nights and concerts. The Princeton Renaissance Project used a $5,000 mini-grant to install weatherproof color-changing LED lights for the community garden on Mercer Street.

The Blueprint Communities® initiative has seen dozens of success stories: after-school programs for disadvantaged youth; a beautification project with trees, shrubs, flowers and a watering service to maintain them; housing projects for both affordable rental and homeownership opportunities, and designations such as Main Street, Elm Street, HUD Choice and B.A.D. Buildings. Together, the participating Blueprint Communities® in our three states have used more than $53 million of our community investment products to realize $240 million in investment, and our modest investment of $1.9 million to underwrite the initiative has leveraged $361 million in total project development within the Blueprint Communities®.

At FHLBank Pittsburgh, our mission is to assure the flow of credit to our members to support housing finance and community lending, and to provide related services that enhance their businesses and vitalize their communities. Programs such as AHP, First Front Door, BOB and Blueprint Communities® provide “community dividends” – supporting our mission with returns to our member financial institutions and the communities they serve. The success of these programs – for homes, community development, jobs and dreams – helps make communities in our region better places to live and work.

JOHN BENDEL IS THE DIRECTOR OF COMMUNITY INVESTMENT AT FHLBANK PITTSBURGH.

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CINNAIRE

| FEATURE

Open Doors Cinnaire Lending and the Affordable Housing Program

BY BETO SANCHEZ AND JAMES DOW, CINNAIRE

A BRIEF HISTORY: CINNAIRE LENDING FHLBC MEMBERSHIP Cinnaire has always maintained a connection with the Federal Home Loan Bank system (FHLBanks) through Jim Logue, Chief Strategy Officer, who has been involved for the past 25 years.

He was a member of the FHLB of Indianapolis (FHLBI) Affordable Housing Advisory Council and for the past 11 years, and has served as an Independent Director of their board. He keeps Cinnaire abreast of work being produced throughout the country as it pertains to community development.

The 2008 Housing and Economic Recovery Act enabled FHLBanks to expand membership to qualified non-depository Community Develop18

ment Financial Institutions (CDFIs) and over time, Cinnaire began to position itself to become a member. Having Jim on the board of FHLBI and being headquartered in Michigan, Cinnaire’s natural response was to become a member of FHLBI. Cinnaire’s Lending operations were headquartered in Illinois, and as the strategy evolved, Cinnaire decided to apply to be a CDFI member through the Federal Home Loan Bank of Chicago (FHLBC).

Since Cinnaire Lending was organized as a Michigan nonprofit corporation doing business in Illinois, the FHLBI had to formally approve a transfer request before the FHLBC could process the application to become the second non-depository CDFI member

of FHLBC. The FHLBC demonstrated a strong forward-moving community development group that engaged with Cinnaire Lending’s application at every level. The experience of Cinnaire Lending was resulted in approval as a CDFI member December 2014.

BEING A CDFI MEMBER OF THE FHLBC As a CDFI member of FHLBC, Cinnaire Lending has access to the full line of products offered. Of note are the financial resources available through the FHLBC’s Community Investment Group that create economically competitive solutions and align with Cinnaire’s core business of financing affordable housing projects to support CINNAIRE

and enhance community stabilization and economic development. Through its membership, it has been able to tap into affordable housing subsidy via the competitive Affordable Housing Program (AHP) grants that are available through an annual application process. Cinnaire Lending has been able to access liquidity through the FHLBC’s Community Investment Cash Advance (CICA) product line which offers cash advances at competitive rates to members, when certain qualifications are met for community lending initiatives. This year, Cinnaire Lending was recognized by the FHLBC as a Community First Fund (CFF) partner and was the recipient of a $3 million, 10-year loan to create or preserve a minimum of 500 affordable housing units and 500 jobs in Illinois and Wisconsin. With this, Cinnaire Lending will direct efforts to facilities that foster more equitable access to job training centers, employers, service providers, healthy foods, and recreation facilities. In 2017, FHLBC recognized one of Cinnaire Lending’s underwriters, Beto Sanchez, as an emerging leader through their annual Community First Awards. These awards are presented in categories that include partnership, project or program, pioneer, and emerging leader. The awards celebrate the success of the FHLBC member institutions and their local partners as they work together to strengthen the communities served.

THE AFFORDABLE HOUSING PROGRAM (AHP) Since 1990, the AHP has played a critical role in the construction or rehabilitation of more than 827,000 units of affordable housing. See article on page 6, FHLBanks: A Model That Works.

FHLB Implementation Plans & Guidelines As described in the leading feature, FHLBanks: A Model That Works, each FHLB has an Advisory Council which AVENUES TO AFFORDABILITY

THE RIVERS PHASE II IS A 40-UNIT LIHTC RENTAL HOUSING DEVELOPMENT SERVING SENIORS IN OSHKOSH, WISCONSIN AND COMPLETED ITS CONSTRUCTION ON SEPTEMBER 30, 2016.

THIS DEVELOPMENT RECEIVED A $400,000 AHP AWARD IN 2015 WITH CINNAIRE LENDING AS THE MEMBER. THE PROJECT WAS SPONSORED BY NORTHPOINTE DEVELOPMENT CORPORATION WHOSE PRINCIPALS ARE CALLAN L. SCHULTZ AND ANDREW DUMKE.

is comprised of individuals representing community organizations, nonand for-profit developers, economic development organizations, public agencies, and/or housing authorities who inform the development of the FHLB’s individual IP. Cinnaire’s primary footprint shares states with the FHLBs of Chicago, Indianapolis, and Pittsburgh. There are many scoring priorities consistent across all three IPs. All give scoring advantages to projects with the following characteristics: those that set aside units for occupancy by households with special needs, projects with committed financing and/or where a member institution is playing a financial role, preservation of affordability, elimination of blighting influences, and developments located in mixed-income census tracts.

Federal Home Loan Bank of Chicago (FHLBC) The FHLBC district is Illinois and Wisconsin, has 716 member institutions, and is where Cinnaire Lending is a CDFI member. To apply, participants

(FHLBC members and project sponsors) must complete an application through AHP Online, the FHLBC’s online application system. In addition to its annual IP, the FHLBC offers several online resources, including the Guide for Sponsor Applicants, which helps guide applicants through AHP Online and program nuances, individual technical assistance calls, webinars, and AHP application workshops throughout their district prior to each application round.

Through its IP, FHLBC gives further scoring advantages to projects that are located in United States Department of Agriculture rural areas, to projects located in Illinois or Wisconsin, promotion or preservation of home ownership, permanent supportive housing projects, and projects consistent with local planning efforts.

Federal Home Loan Bank of Indianapolis (FHLBI) The FHLBI district is Indiana and Michigan and has approximately 400 members. Applicants must complete an Excel-based application available 19

| FEATURE on the FHLBI website. In addition to its annual IP, the FHLBI offers a variety of training opportunities for prospective applicants including webinars, in-person technical reviews, and face-toface technical assistance.

FHLBI also offers points to projects that utilize green building practices, promote aging in community and those with proximity to specific amenities including community centers, schools, libraries and other services.

Federal Home Loan Bank of Pittsburgh (FHLBPitt) The FHLBPitt district is Delaware, Pennsylvania, and West Virginia and has over 290 members. AHP applications are submitted on their own AHP Online system. In addition to its annual IP, FHLBPitt offers AHP seminars and individualized technical assistance for potential applicants and

assists project sponsors in identifying member partners.

FHLBPitt also prioritizes rural housing, promotion of homeownership, and consistency with local planning efforts. It has additional scoring opportunities available for projects located in Qualified Census Tracts (QCTs), Difficult to Develop Areas (DDAs) or other distressed areas, developments that include the rehab of historic property or are considered adaptive-reuse, projects that utilize land bank owned parcels and those that create other physical assets that can benefit residents and the surrounding community.

Applying for an AHP Grant When applying for an AHP grant it is necessary to consult the IP for the FHLB you are applying to. In the IP, information on important deadlines, maximum award size, the amount of

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capital available, and the process by which to apply will be fully detailed.

This information is subject to change.

Information for the 2017 application rounds for FHLBC, FHLBI, and FHLBPitt has been summarized in the table below.

CINNAIRE LENDING’S EXPERIENCE WITH THE AFFORDABLE HOUSING PROGRAM Cinnaire has always recognized the importance of gap financing frequently needed in affordable housing projects. After becoming a member of the FHLBC, Cinnaire put a team in place to help developers access AHP subsidy through the FHLBC’s competitive AHP. As a member, Cinnaire Lending can submit AHP applications on behalf of development partners which can only be submitted through member institutions. Cinnaire has a unique and diversified business structure amongst the majority of other FHLBC members, which means we can financially participate in an AHP project as a short-term or long-term lender and/ or as an equity syndicator. Cinnaire Lending has only worked with Low Income Housing Tax Credit (LIHTC) rental projects for AHP grants, due primarily to the flexibility of the AHP application parameters that allow LIHTC projects to apply for AHP grants prior to receiving a LIHTC award and up to 85% construction completion. This allows Cinnaire Lending to help our LIHTC developer partners with a need for subsidy at various stages of the development lifecycle. We can tailor the approach each year to focus our AHP sponsoring efforts on business development for new LIHTC projects that don’t yet have a LIHTC award, on LIHTC projects that have received a LIHTC award but have not closed on its financing, on LIHTC projects that have closed on its financing and are in construction but have a need for subsidy, or a combination of any of these scenarios. Our primary focus is on LICINNAIRE

HTC projects and in an effort to build our lending platform, the approach has been to focus its AHP sponsoring efforts on LIHTC projects that have not closed on its financing and have a need for a permanent loan. Cinnaire does not limit its AHP sponsoring efforts to this approach. The goal is to meet the needs of developer partners at any stage of the development lifecycle and with any financial resource we have the capacity to provide.

Application Submission Strategy Given the highly competitive nature of the FHLBC’s AHP, Cinnaire Lending’s preliminary selection process revolves around the scoring potential of a LIHTC project. The scoring system is based on a 100-point scale.

It is not possible to score every point.

The range of competitively scoring applications changes yearly. In recent years, scores have been increasing, resulting in the need for projects to score more competitively and submit high quality applications.

In an effort to add value to a project’s financial needs and to differentiate itself from other members, Cinnaire Lending made a decision to work side-by-side with its developer partners seeking an AHP grant to improve the quality of any application being submitted. In 2015, we provided a thorough application review for developers that wished to submit an AHP application. In 2016, we recognized the need to compete at a higher level, and put a team together to provide

435 LAGRAVE AT TAPESTRY SQUARE IS A NEW CONSTRUCTION, 20-UNIT MIXED-INCOME LIHTC RENTAL HOUSING AND TRANSIT ORIENTED PROJECT IN GRAND RAPIDS, MICHIGAN SERVING LOW-INCOME AND MARKET RATE TENANTS WITH 6 OF ITS AHP UNITS COMMITTED TO HOUSING YOUTH AGING OUT OF FOSTER CARE – A POPULATION THAT IS AT GREAT RISK FOR HOMELESSNESS. THIS DEVELOPMENT RECEIVED A $272,000 AHP AWARD IN 2015 AND WAS SPONSORED BY INNER CITY CHRISTIAN FEDERATION (ICCF). THE PROJECT WAS DESIGNED BY DESTIGTER ARCHITECTURE AND PLANNING AND ICCF ANTICIPATES COMPLETION OF ITS CONSTRUCTION IN OCTOBER OF 2017.

technical assistance and a dual review of each AHP application being submitted. This approach was well-liked by developer partners and yielded impressive results for application submissions, resulting in developer partners returning year-after-year. In 2017, we continued efforts in providing both technical assistance and a dual application review. We’re highly focused on the success of developer partners and realizes that their success in securing valuable resources to make their projects a reality is key

to providing more homes throughout communities. We anticipate another round of impressive results for developer partners when AHP awards are announced later this year.

Performance Cinnaire Lending has successfully connected affordable housing developer partners with access to gap financing via the FHLBC’s competitive AHP grant awards. Since approved as a CDFI member, we have been an active participant in the annual FHLBC

2017 2016 Application Due Date

Award Announcement

Max Award Size

Capital Awarded

Projects Awarded

FHLBC

June 16

December

$750,000

$23.5 MM

39

FHLBI

May 10

Mid-September

$500,000

$9.5 MM

24

August 10

Mid-December

$650,000

$23.1 MM

50

Bank

FHLBPitt

AVENUES TO AFFORDABILITY

21

| FEATURE Cinnaire Lending - AHP Awards

2015 City 1 Milwaukee 2 Racine 3 Tinley Park 4 Grand Rapids 5 OshKosh Total: 5

2016 City 1 Chicago 2 Gurnee 3 Sparta 4 Milwaukee 5 Superior 6 Superior 7 Hudson Total: 7

Total State Units AHP Award WI WI IL MI WI

72 74 47 20 40 253

$ 850,000 $ 850,000 $ 675,000 $ 272,000 $ 400,000 $ 3,047,000

Total State Units AHP Award IL IL WI WI WI WI WI

Total: 12

102 120 32 50 24 24 36 388

$ 850,000 $ 850,000 $ 405,000 $ 630,000 $ 300,000 $ 345,000 $ 540,000 $ 3,920,000

641 $ 6,967,000

Cinnaire Lending - AHP Submissions

2017 City 1 North Hudson 2 LaCrosse 3 River Falls 4 Champaign 5 Chicago 6 Milaukee Total: 6 22

Total State Units AHP Request WI WI WI IL IL WI

38 50 50 90 75 40

$ $ $ $ $ $

570,000 714,000 450,000 750,000 750,000 600,000

343 $ 3,834,000

competitive AHP round which takes place in the second quarter each year with a deadline in mid- to late-June. Due to our careful approach, providing technical assistance and guiding the application process for the sponsor while providing valuable feedback regarding eligibility, scoring and strategy questions, we have enjoyed success in the program. In 2015, we secured the third most AHP subsidy dollars and were awarded a grant on over 50 percent of our AHP submissions. In 2016, we were awarded a grant on 70 percent of our AHP submissions, which placed us amongst the top two members in AHP subsidy dollars awarded last year by the FHLBC. In total, Cinnaire Lending has led successful applications for 12 projects representing 641 new homes and $6,967,000 in AHP grant subsidy, that will assist in providing each project with the critical financial resources needed to create safe, affordable, high-quality housing for those who need it most. This year, Cinnaire Lending submitted 6 AHP applications representing a total of 343 new homes and $3,834,000 in AHP grant requests. The results of the 2017 FHLBC competitive AHP round will be announced in December.

After receiving an AHP award, both the project sponsor and member of the AHP application can expect to execute a tri-party subsidy agreement with FHLBC. Once the agreement is executed, the project sponsor and member may initiate a disbursement request of the AHP grant. Each project will provide a timeline to FHLBC to set the expectation for accessing the AHP grant. This is a pass-through of subsidy from the member to the project sponsor who then uses the subsidy toward acquisition, rehabilitation, and/or construction costs for their AHP project. For AHP rental housing projects, FHLBC monitors initial compliance semi-annually and allows 42 months from the date of the award for a project to reach Project Completion. For LIHTC rental projects, once a Project Completion Report (PCR) is generated, FHLBC relies on the compliance and monitoring of the Housing Finance Agency (HFA) that issued the LIHTC award to the project for the remainder of the compliance period. If the project remains in compliance with its AHP commitments for 15 years, there is no obligation to repay the subsidy and restrictions placed on the project through the AHP program may be released. If there is a non-curable event of non-compliance during the compliance period that triggers a recapture of the AHP grant, the project sponsor or member sponsor may be responsible for repaying the entire grant amount, including interest, as determined in the FHLBC’s discretion, if appropriate.

OPPORTUNITIES As Cinnaire grows, the use of additional FHLBC resources will expand. The FHLBC Community Investment Group’s CINNAIRE

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CINNAIRE LENDING AHP PROJECTS n 2015 AWARDS n 2016 AWARDS n 2017 APPLICATIONS

resources closely align with Cinnaire’s mission and help deliver valuable, creative financing solutions to partners in community development. With growth comes the need for capital solutions and FHLBC offers many financial tools including liquidity solutions, cash management, short- or long-term borrowing at competitive rates.

Membership with FHLBC opened doors to many new opportunities for our growing CDFI platform. It means access to new sources of capital through cash advances and loans, the ability to pledge assets as collateral, access to the AHP grants, a new network to build relationships with CDFI members and FHLB members, and a variety of other products and opportunities available. Our relationship with FHLBC has developed more than anyone initially envisioned. We have been able to utilize cash advances, borrow as a partner in the Community First Fund, and perhaps the most noticeable is active participation in the annual AHP application rounds. AHP participation has become a means to build relationship with FHLBC and developer partners.

AVENUES TO AFFORDABILITY

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| IMPACT

The Lifecycle of Homeownership Most Americans strive to own their own homes. According to the U.S. Census Bureau, more than 63 percent of Americans do currently own their homes—and that rate has been relatively steady since 2014.

Each year, FHLBank Indianapolis conducts market research with members and affordable housing professionals throughout Indiana and Michigan to understand the impediments families in communities may face. The results, included the continued struggles low-income families face, including down payment/closing costs or money for much needed home repairs.

The three Homeownership Initiative grant programs enable members in our footprint to mitigate these concerns and address the needs of clients from buying, to repairing, to creating barrier-free places for seniors or those with disabilities.

The Homeownership Opportunities Program (HOP) grant assists first-time homebuyers with support funds for down payment or closing costs up to $8,000. The Neighborhood Impact

24

Program (NIP) grant helps fund repairs or maintenance issues such as new windows or roof, up to $7,500. The Accessibility Modification Program (AMP) grant enables seniors and those with disabilities to remain in their homes by assisting with any necessary modifications up to $15,000.

All programs are available through our members for families at or below 80 percent of the area median income (AMI). In 2016, FHLBank Indianapolis disbursed $5 million to 49 members, helping them directly meet the needs of almost 600 customer households in the communities they serve.

HOMEOWNERSHIP OPPORTUNITIES PROGRAM (HOP) Delivering on the dream of homeownership is the purpose of the HOP grant. Since down payment and closing cost requirements frequently prohibit people from buying a home.

HOP grants help first-time homebuyers at or below 80 percent AMI come up with the necessary closing cost funds. These grants help financial institutions build next-generation banking relationships that can last a

lifetime. In 2016, 41 members provided $2.4 million of hope using the HOP program with 269 families.

Tony Payton, Gary, IN, bought the home he formerly rented with help from FHLBank Indianapolis member, Horizon Bank, and a HOP grant. When his landlord put the duplex up for sale, Tony saw an opportunity—if he could come up with the closing costs.

“I had been living here as a renter and I was tired of paying my landlord’s mortgage,” Tony said, now a landlord himself. “I wanted to be a homeowner.

So far, it has worked out well.”

In 2014, another FHLBank Indianapolis member, Level One Bank in Farmington Hills, MI, began using FHLBank Indianapolis’ HOP and NIP grants to support their local community. Since then, Level One has distributed more than $1.5 million in support of down payment assistance and home repairs “This year alone, with the support of our community partners and community development corporations, we were able to process 47 grant re-

TONY PAYTON WITH HIS SON AND TWO REPRESENTATIVES FROM HORIZON BANK, WHICH IS LOCATED IN MICHIGAN CITY, INDIANA.

CINNAIRE

AHP At Work in Indianapolis quests totaling $400,000 distributed throughout four counties and in over 35 neighborhoods,” Watkins said.

“That is what we refer to as ‘making an impact’ in the community.”

NEIGHBORHOOD IMPACT PROGRAM (NIP) If you own a home long enough, it’s likely you’ll need to install windows, a new roof, or replace the furnace.

Maintenance requirements like these can be a challenge for the average homeowner, but owners with an income at or below 80 percent of AMI have a real challenge.

The FHLBI’s NIP grants provide members with the opportunity to help their low-income customers with many deferred maintenance needs. In 2016, FHLBank Indianapolis provided $2.1 million to 25 members, who in turn helped nearly 300 Indiana and Michigan families improve their homes.

Northpointe Bank in Grand Rapids, MI, understand that NIP does more than help preserve property values in local communities.

“The NIP program reminds low- and moderate-income homeowners in our community that Northpointe Bank is stronger than their obstacles and has solutions to their problems in a time of diminishing resources,” Ryan Gummere of Northpointe said. “The program has provided us credibility in the neighborhoods.”

Homeowners Edith Reed used a $7,500 NIP grant to replace her roof and made some necessary repairs to window seals. “I feel good about the work, because it was something I could not have done by myself,” Reed said.

“I’m glad they were able to help me!”

Northpointe’s participation in 2016 helped create employment, mentoring, and other training opportunities AVENUES TO AFFORDABILITY

At FHLBank Indianapolis’ Community Investment programs is the Affordable Housing Program (AHP), a competitive grant opportunity that brings together members with local nonprofits, economic development groups, and developers interested in offering decent and safe affordable housing. In 2016, FHLBI provided $9.5 million through AHP in support of 24 projects in Michigan and Indiana, creating 645 new or renovated affordable housing units. Over the years, they participated in many AHP projects with Cinnaire. Here are some highlights: RIVER CREST APARTMENTS In 2014, Building Blocks Nonprofit Housing Corp. acquired and rehabilitated a historic, downtown Detroit building of 161 low-income family apartments. Identified by Detroit Police as “the most problematic building in the city” after accruing 600 emergency calls in a single year, the former Colony & Fishers Arms (right, with interior inset) re-opened in January of 2017 with a complete remodel. The extensive $24.5 million renovation included new appliances, bathrooms, kitchens, flooring, central air conditioning, a secure parking lot and playground, and enhanced security measures. FHLBank Indianapolis awarded an AHP grant of $500,000 to Flagstar Bank, in partnership with Cinnaire and Building Blocks Nonprofit Housing Corp., in support of River Crest Apartments.

THE COURTYARD The Courtyard, Fort Wayne, Indiana, provides 36 affordable apartment homes for young adults who are aging out of foster care, are homeless, or at risk of becoming homeless. In 2012, FHLBank Indianapolis awarded Old National Bank a $500,000 AHP grant to help fund the project. Partners, including Cinnaire, Old National Bank, and SCAN Inc., then built a rapport with the neighborhood to increase support for the new development. The Courtyard provides residents with support services such as counseling, education, employment assistance, and life coaching. It is a sound, catalytic investment that will provide leverage for further economic activity in the community.

HOPEWELL POINTE Hopewell Pointe, Fort Wayne, Indiana, is 35 single-family homes for low- and moderate-income families. All homes in the development are lease-to-purchase properties, providing residents with the option to buy at the end of a 15-year period. Old National Bank, with project sponsor Community Action of Northeast Indiana, Inc., helped secure a $400,000 AHP grant for the Cinnaire-financed property. The homes have either 3- or 4-bedrooms and residents enjoy access to an onsite community center and playground.

25

| IMPACT within the neighborhoods they serve.

According to Gummere, 63 percent of the improvements completed using NIP grants involved minority contractors. The program has been so successful for Northpointe that they increased their use of it from 17 NIP grants in 2016 to 22 this year.

ACCESSIBILITY MODIFICATION PROGRAM (AMP) For many families, part of the dream of homeownership is remaining in the house as they age or face other challenges. The AMP grants provide up to $15,000 in funding for home modifications such as the installation of ramps, grab bars, roll-in showers, widened doorways, and more.

Household income must be at or below 80 percent of the AMI and household members must be at least 62 or one member of the household must have a permanent disability. In 2016, in partnership with seven members, FHLBank Indianapolis provided more than $450,000 of stability to 37 qualifying families in Indiana and Michigan.

Flagstar Bank, Troy, Michigan, is committed to serving low- and moderate-income residents in their communities. According to Chris Aikens, Vice President and CRA Service Specialist at Flagstar, they have recently partnered with local nonprofit groups such as Veteran’s Empowerment Neighborhoods and Oakland Livingston Human Services Agency to identify residents who most needed accessibility improvements. One of the keys to their success was the way they involved multiple parties in the process to maximize the potential benefit to the community.

To start, Flagstar hosted a Financial Fitness Day in Pontiac, Michigan, to educate seniors about the program.

Then, the seniors receiving help obtained the necessary documentation to ensure they qualified for an AMP 26

EDITH REED WORKED WITH NORTHPOINTE BANK TO MAKE REPAIRS TO HER ROOF AND SOME OF HER WINDOWS USING FHLBANK INDIANAPOLIS’ NIP GRANT.

FOR THIS HOME, IN ADDITION TO THE RAMP, REPAIRS INCLUDED CONVERTING AN EXISTING TO A ZERO ENTRY SHOWER AND INSTALLING TUB NEW TILE, A VANITY, AND A SINK.

grant. The nonprofit groups managed the details of the projects and, according to Aikens, many contractors involved agreed to donate additional work and supplies for any needed repairs not covered by the program.

SUSTAINING THE DREAM At FHLBank Indianapolis, the core mission is to provide a reliable source

of liquidity to help support housing finance, asset-liability management, and community lending. All aspects support home ownership directly or indirectly.

VISIT THE FHLBANK INDIANAPOLIS WEBSITE (WWW.FHLBI.COM) OR THE WEBSITE FOR THE FHLBANK SYSTEM (WWW.FHLBANKS.COM).

FHLBANK INDIANAPOLIS: BUILDING PARTNERSHIPS. SERVING COMMUNITIES.

CINNAIRE

| CULTURE CINNAIRE RECOGNIZED AS CRAIN’S COOL PLACE TO WORK Award Honors Top Michigan Companies that Provide Exceptional Employee Benefits and Unique Workplace Environment Cinnaire was recently named as a Crain’s Detroit Business Cool Place to Work. This is the fourth time Cinnaire has been selected for this prestigious list. The annual list is compiled by Crain’s and Best Companies Group. It is open to Michigan businesses, nonprofits and government entities that have at least 15 employees. The employer provides detailed information on its benefits and perks.

Next, employees answer questions about work environment and company leadership in a confidential survey.

The employee assessments represent 75% of the final ranking.

“The most important asset of an organization is its people,” said Mark McDaniel, Cinnaire president & CEO. “Being recognized as a Crain’s Cool Place is particularly gratifying as this award is driven by input directly from our team. We strive to create a culture that ensures all employees are provided with opportunities for growth and creativity, in an environment that promotes diversity, inclusion and fairness.

This award affirms our success in establishing a staff-approved, unique and innovative company culture.”

discussing ideas, initiatives and insights that improve professional lives and company culture, and for sharing takeaways and recommendations with the management and executive teams. Employees recently launched Cinnaire Cares, a companywide staff funded and driven charitable program that provides everyone an opportunity to make an impact by donating to staff nominated charities. Cinnaire was recently selected as a host employer for the Detroit Revitalization Fellows, a program of Wayne State University.

Cinnaire maintains a diversity and inclusion policy designed to provide

an environment that empowers the authentic expression of diverse voices and celebrates a workforce that reflects the communities the company serves. Company career opportunities are posted through diversity recruitment websites. The recruitment process includes a Cinnaire culture interview to determine if candidates are a good fit, a face-to-face interview and 3rd party assessments which include additional testing and interviews. New employees participate in leadership training, attend cultural competency workshops and are given books that support the company culture.

Cinnaire provides all full-time employees with an unlimited paid time off policy, weekly organic fresh fruit deliveries, an employee wellness program, on-site fitness center at company headquarters, company paid cell and wireless services, onsite dry-cleaning pickup and delivery and a comprehensive benefits package.

An open-door policy and regularly scheduled lunches with the company CEO promote transparency and establishes open communication. The Staff Engagement Committee provides staff with an open forum for generating and AVENUES TO AFFORDABILITY

27

| CULTURE CINNAIRE PRESIDENT & CEO RECEIVES PRESTIGIOUS AWARD Mark McDaniel Honored as Industry Champion for Lasting Contributions to the Affordable Housing Industry

Cinnaire recently announced that president and CEO Mark Mcdaniel has been named for induction into the Affordable Housing Finance(AHF) Affordable Housing Hall of Fame. Recognized as being industry champions, pioneers, leaders and advocates for better housing programs and policies, the AHF Hall of Fame Inductees will be honored at AHF Live: The 2017 Affordable Housing Developers’ Summit on November 14th – 16th in Chicago.

Mark received his Bachelor of Science in Urban Planning from Michigan State University in 1977 and has over 30 years of experience in the areas of affordable housing, community development, urban planning and market research. In Mark’s professional career he formerly served as Vice President and President of a major Michigan development company, and as Director of Development for a nonprofit housing corporation.

Since establishing Cinnaire in 1993, Mark has led the company to invest more than $3.7 billion in loans and equity for affordable housing and community development efforts. Mark has strategically diversified the organization to provide access to permanent debt financing, construction lending, 28

technical assistance, predevelopment lending, youth leadership training, and title services. He has also created a company culture that ensures all employees are provided with opportunities for growth and creativity, in an environment that promotes diversity, fairness and inclusion. Under his leadership, Cinnaire has been honored several times as both a Crain’s Detroit Business Cool Place to Work and one of the Nonprofit Times top 50 nonprofits to work for.

“I can think of no person more deserving of this wonderful recognition than Mark,” said Jim Logue, Cinnaire Chief Strategy Officer. “He is a gifted leader and champion for those in need of decent, affordable housing and better communities.”

Mark’s personal and professional contributions have been recognized with numerous awards throughout his career. In 2004, he received the Entrepreneur of the Year Award from the Greater Lansing Business Monthly and in 2008 he received the Governor’s Corporate Service Award. In 2011, Mark was awarded the Michigan Habitat for Humanity’s Bernice Bensen Award recognizing his long service and commitment to Habitat for Humanity. He was also the recipient of the prestigious Terry R. Duvernay Award in 2013, a recognition of lifetime leaders in the affordable housing industry. Mark was recognized by the Michigan Children’s Trust Fund as the 2016 Children’s Advocate of the Year.

In 2016 and 2017 he was the Honorary Chairman of the Martin Luther King Holiday Celebration Commission.

Mark has also been a long-time volunteer and advocate for Haven House, a

shelter providing emergency housing and support services for families in East Lansing.

“I can’t think of a more worthy candidate for AHF’s Affordable Housing Hall of Fame than Mark McDaniel,” said Jeanne Peterson, Peterson & Associates Affordable Housing Connections Managing Member. “Mark has those unique and admirable qualities of blending compassion for others with a passion for the challenges of making affordable housing a reality in our land.”

Mark has served on the Board of Directors for a number of nonprofit organizations which advocate on behalf of affordable housing. Mark’s appointments include: Michigan Housing Council, National Association of State and Local Equity Funds, Fifth Third Bank’s Community Advisory Forum, Habitat for Humanity of MI, Michigan Magnet Fund, Corporation for Supportive Housing State Advisory Committee, National City Community Development Association, Federal Home Loan Bank of Indianapolis Affordable Housing Council, Children’s Trust Fund, Michigan State University Urban Planning Alumni Advisory Board, and the Seminary Consortium for Urban Pastoral Education.

Cinnaire extends congratulations to Michael Costa, President & CEO of Highridge Costa Housing Partners and Highridge Costa Investors; Chickie Grayson, President & CEO of Enterprise Homes; and Barry Zigas, Director of Housing Policy for the Consumer Federation of America, for also being honored as 2017 AHF Hall of Fame inductees.

CINNAIRE

CINNAIRE INVESTMENT TO REVITALIZE DOWNTOWN SAGINAW Cinnaire recently provided a $8M New Market Tax Credit (NMTC) allocation to support the redevelopment of the former iconic Saginaw News building to create the Saginaw Valley Rehabilitation Center (SVRC) Marketplace, a mixed-use facility that will include a year-round farmer’s market, kitchen incubator, childcare center, CDFI Credit Union, business incubator and retail and office space. Located in an area with a staggering poverty rate, the transformative $21M renovation of the 100,000-square foot building will revitalize downtown Saginaw and be a catalyst for further economic development.

The project is being developed by SVRC Industries, Inc., a non-profit organization that has been providing quality vocational rehabilitation services in Saginaw County and the surrounding community since 1962. It is their mission to create and sustain opportunities and support systems for persons with barriers to employment and community access. The SVRC Marketplace will offer healthy food options, integrated jobs, supportive services and a vibrant gathering space downtown. Multiple payment options will be accepted, including WIC FRESH coupons, EBT cards and Double Up Food Bucks, providing accessibility for low-income customers.

The Marketplace will bring an estimated 10,000 people to the downtown Saginaw riverfront weekly.

“We applaud SVRC Industries for their innovation and commitment to improving the lives of Saginaw residents,” said Mark McDaniel, Cinnaire President & CEO. “The Marketplace will bring critically needed amenities to this severely depressed food desert, providing healthy options, access to supportive services and creating jobs.

Cinnaire is excited to join SVRC Industries in supporting community stabilization and economic development in downtown Saginaw by revitalizing this historic building.”

Make the mark.

Discover the personal touch, the seamless service, and the expertise of our housing and community development professionals.

Rob Edwards, partner 517-336-7460 robert.edwards@plantemoran.com plantemoran.com

AVENUES TO AFFORDABILITY

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OVER 20 YEARS EXPERIENCE IN ALL PHASES OF AFFORDABLE HOUSING • Audits • Cost Certifications Mt. Pleasant & Midland Michigan

• LP Tax Returns • Mortgage Certifications

Phone 989.772.4673 | Fax 989.772.6371 Web www.blystonebailey.com | Email jbourland@blystonebailey.com

| CULTURE CINNAIRE STAFF ANNOUNCEMENTS NEW HIRES

Nathan Dickinson recently joined Cinnaire as an Assistant Underwriter in the Lansing, MI office. In this role, Nathan will be responsible for analyzing real estate debt and equity investments and assessing the risks associated with these potential investments.

Liliana Gonzalez has joined Cinnaire in the company’s Detroit, MI office as a Senior Market Analyst. In this role, Liliana will engage with policy leaders, community based developers and city officials in the identification and implementation of emerging real estate development strategies that supported mixed income neighborhoods to retain, expand and enhance housing and economic opportunities in a rapidly changing housing market.

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CINNAIRE

FHLBanks: A Model That Works CONTINUED FROM PAGE 8

years of experience in representing community or consumer interests.

The boards represent many areas of expertise, including banking, accounting, housing and community development. Directors serve four-year terms and may not serve more than three consecutive terms.

The regulator charged with overseeing them is the Federal Housing Finance Agency (FHFA), created by Congress in the Housing and Economic Recovery Act of 2008. FHFA is led by the FHFA Director and advised by a Federal Housing Finance Oversight Board, composed of the Secretaries of Treasury and HUD, the Chair of the SEC, and the FHFA Director.

There is a Deputy Director for FHLBank regulation, while the FHLBank mission oversight is charged to the Deputy Director of Housing Mission and Goals.

The FHLBanks are prudent, responsible and well managed. They stay in constant touch with changing regional and local needs. The steady flow of funds they provide creates jobs, supports economic growth and helps support more affordable rental housing and homeownership. It’s a model that works.

DAVID JEFFERS IS THE EXECUTIVE VICE PRESIDENT-POLICY & PUBLIC AFFAIRS FOR THE COUNCIL OF FEDERAL HOME LOAN BANKS, WHICH REPRESENTS THE CONSORTIUM OF 11 FEDERAL HOME LOAN BANKS ACROSS THE NATION AS WELL AS THE OFFICE OF FINANCE.

AVENUES TO AFFORDABILITY

GOVERNING BOARD Wendell Johns, Chair Retired, Fannie Mae

ADVERTISERS

James W. Stretz, Vice-Chair George K. Baum & Company

Clark Hill, PLC.................................................. 13

Michael J. Taylor, Secretary/Treasurer PNC Bank Catherine A. Cawthon Fifth Third CDC Derrick K. Collins Chicago State University Christine R. Hobbs Retired, Freddie Mac Multifamily Brett Macleod JP Morgan Chase William C. Perkins Retired, WPHD Carl Riedy State Street Global Advisors Sheldon Schreiberg Pepper Hamilton LLP Donald F. Tucker Don Tucker Consulting Paul J. Weaver Retired, FHLBI CORPORATE OFFICERS Mark S. McDaniel, President & CEO Christopher C. Cox, CFO James L. Logue III, Chief Strategic Officer Kevin Crawley, COO Jennifer A. Everhart, Executive Vice President Rick Laber, Executive Vice President Marge Novak, Executive Vice President Jim Peffley, Executive Vice President LOCATIONS Lansing (Headquarters) 1118 S. Washington Avenue Lansing, MI 48910 • P 517.482.8555 Detroit 2111 Woodward Avenue, Suite 600 Detroit, MI 48201 • P 313.841.3751 Chicago 225 West Washington, Suite 1350 C Chicago, IL 60606 • P 708.781.9603 Indianapolis 320 N. Meridian, Suite 516 Indianapolis, IN 46204 • P 317.423.8880 Madison 2 E. Mifflin Street, Suite 403 Madison, WI 53703 • P 608.234.5291 Wilmington 100 W. 10th Street, Suite 502 Wilmington, DE 19801 • P 302.655.1420

Blystone & Bailey.......................................... 30

CEDAM............................................................. 30 Dauby O’Connor & Zaleski, LLC................. 13 Develop Michigan............................................9 Ginosko Development Company.................5 Keller Development...................................... 23 KMG Prestige, Inc........................................... 15 Leon N. Weiner and Associates................. 12 Loomis, Ewert, Parsley, Davis & Gotting....... 11 Love Funding.................................................. 27 Maner Costerisan, P.C.................................. 30 Medallion Management, Inc....................... 20 MHT Housing, Inc.......................................... 32 O’Brien Construction Company, Inc............2 Occupancy Solutions, LLC.......................... 20 Plante Moran.................................................. 29 PM Environmental, Inc................................. 23 Rohde Construction........................................17 Wisconsin Management Company............ 16 EDITORIAL Mary McDaniel, CMP Alternative Solutions, LLC 517.230.5494 • mary@altmgmtsolutions.com ADVERTISING Kelly Haracourt Alternative Solutions, LLC 517.775.2028 • kelly@altmgmtsolutions.com GRAPHIC DESIGN Melissa Travis Ink Ideas Graphic Design, LLC COVER ILLUSTRATION Matthew McDaniel Student PRINTING Spartan Printing & Promotional Products Avenues to Affordability magazine is published quarterly for Cinnaire. This publication is copyrighted. The reproduction of Avenues to Affordability is prohibited by law. For additional copies, comments, or to be added to the mailing list, please contact Mary McDaniel at 517.230.5494 or mary@altmgmtsolutions.com.

Promises Made, Promises Kept.

Syndicators and lenders will attest to our rock solid reputation.

For more information, contact our administrator at 248.833.0550