The Community Reinvestment Fund has issued $100 million in federally guaranteed bond funding to Aura Mortgage Advisors, an affiliate of nonprofit Boston Community Capital, through the U.S. Department of the Treasury’s CDFI Bond Guarantee Program.
As a financing tool that supports investment in distressed communities, the bond will be used to finance mortgage loans through its mortgage buyback program, which helps families and individuals facing foreclosure remain in their homes with new mortgages they can afford.
“The housing foreclosure crisis disproportionately impacted low-income communities and communities of color, and many of these communities have yet to recover,” Elyse D. Cherry, CEO of Boston Community Capital, said in a statement. “We are grateful to CDFI Fund Director Annie Donovan and Bond Guarantee Program Manager Lisa M. Jones and their team for their pioneering work and unwavering commitment to making the Bond Guarantee Program’s long-term, low cost capital accessible to provide these communities with lasting relief.”
For the first time in the CDFI Bond Guarantee Program’s history, a national foundation provided a guarantee in support of an eligible CDFI’s bond loan application, demonstrating strong collaboration between the public and private sector. The Kresge Foundation’s limited payment guarantee to Aura Mortgage Advisors showcases how CDFIs and foundations can leverage social investments to extend their impact through the CDFI Bond Guarantee Program.
The Kresge Foundation has a $350 million commitment to social investing through 2020, including $150 million in guarantees.
Aura Mortgage Advisors will use the bond proceeds to expand its SUN Initiative. To date, the program has helped stabilize nearly 900 households in Massachusetts, Rhode Island, New Jersey, Maryland and Illinois, reducing their average monthly mortgage payments and mortgage principal balance by 35 percent. Bond funds will support mortgage lending in these states, as well as expansion to Connecticut and Pennsylvania.