SAFI is one of City First Bank’s loan products targeted especially to non-profit organizations. The product was created in 2005 with funding assistance from the District of Columbia’s Department of Housing and Community Development (DHCD) to help affordable housing providers compete at a time when many of the District of Columbia’s neighborhoods were rapidly changing as a result of escalating real estate prices. Affordable housing providers, particularly the non-profits, found it more difficult to quickly capture site opportunities due to lack of readily accessible capital resources. Using this program, DHCD sought to leverage public funds with private capital for quick-closing, easily accessible, revolving loan funds to non–profits committed to affordable housing. In a competitive bid with several lenders, City First Bank was selected as one of four lenders to participate in the program.

In 2005, City First Bank received its initial allocation of $5 million from DHCD. The Bank uses these SAFI proceeds to provide cash collateral at a 50% level for site acquisition and predevelopment loans made to eligible projects and non-profit organizations that have been pre-certified by DHCD as “qualified SAFI borrowers”. With these proceeds, the Bank is able to make below-market interest rate bridge acquisition loans at a point when the non-profit developers have not yet secured their construction and permanent financing. The Bank can lend a pre-certified non-profit borrower up to 100% of the appraised value of a property for site acquisition plus an additional 5% of the value of the property or $100M, which ever is less, for pre-development uses.

Since 2005 when the initial allocation was received, City First has leveraged these funds to provide over $10 million in low-cost below-market interest rate loans to non-profit affordable housing providers. As a result, these providers have been able to acquire several properties and reposition close to 140 housing units for District of Columbia families making below 80% of the Washington Area Medium Income. Currently, the Bank has five (5) projects in its pipeline awaiting. SAFI funding. Fully funded, $5.68 million of SAFI would leverage close to over $11 million of CFB loans to produce 179 additional affordable units.

Some of the closed transactions to date include:

• $6.2 million loan for the acquisition of 5.8 acre parcel of land situated at the corner of 4th Street and Mississippi Avenue, SE, Washington DC for development of affordable for sale housing.
• $1 million loan for the acquisition of a multi-family building located on19th Street, SE. to be developed as 12 unit transitional housing facility for very low income, special needs and homeless families.
• $4.0 million to acquire a multi-family building on 13th Place NW to be developed as 32 units of affordable transitional housing.

For more information regarding SAFI loans, please contact Dr. Godwin E. Agba, Senior Vice President of Commercial Real Estate at 202-243-7102.