Program Funding
Grants may support a wide array of activities from improving organization
performance to exploring new program and project opportunities.
Types of Grants Issued
-
PLANNING GRANTS are generally awarded when are used for efforts that are
broader than a single project and where the cost cannot be recouped by any one
project. "Visioning" or strategic planning, physical planning, physical
plans, quality of life plans and regional plans fall in this
category. Grant size depends on the size of the planning
effort. Typically LISC funds can be used as a match for other local
foundations and government funding.
- FEASIBILITY GRANTS cover expenses
associated with testing whether development of a particular project is
feasible. These include market studies, land use plans, financial analyses
or other activities necessary to determine viability of a proposed project. An
average grant size is $10,000-$15,000
- RECOVERABLE GRANTS may or may not be
repaid to LISC. If the project proceeds to development, the grant is
repaid in full to LISC at construction closing. If the project does not
proceed for reasons that LISC considers legitimate, the action becomes a grant
and repayment is no longer required. An average grant size is $20,000.
- ORGANIZATIONAL DEVELOPMENT GRANTS assist community organizations with
improving their administrative structures, management and financial systems and
real estate development and management capacities. An average grant size
is $500-$5,000.
- OPERATING GRANTS are offered on an annual basis to community development organizations committed to homeownership. Grantees are expected to complete a two-part application including program/project and organizational development goals over a 2-3 year time frame. Organizations are expected to demonstrate and/or commit to improving community involvement in the nonprofit. An average grant size is $20,000.
Project Financing Loans
LISC offers an array of special financing packages. Most often,
LISC takes a subordinate position on its collateral to conventional lenders and
will share position with other non-profit or public lenders; however, LISC’s
willingness to share risk on a particular project sometimes provides just the
incentive a lending institution needs to undertake project financing.
- PREDEVELOPMENT LOANS are used for projects likely to proceed to
construction. Commitment for permanent financing has usually been obtained
by the organization from one or more sources. All LISC loans must be
secured with either real estate or other assets from the borrower.
LISC has no specified loan ceiling. Most loans range between $40,000 and
$500,000, though LISC does provide up to $1 million line of credit for
organizations with strong track records and active development programs.
-
CONSTRUCTION FINANCING is usually provided by LISC in tandem with a lead
construction lender, such as local bank. LISC takes a subordinate position
on its collateral to conventional lenders and will share its position with other
non-profit or public lenders.
- MINI-PERM LOANS are used for commercial or
industrial developments. These loans can have a maturity of up to 10 years
(depending) on the nature of the project and may be either fully-amortizing or
have a longer amortization term with a balloon payment at the end.
- EQUITY investment is also available. LISC provides equity for affordable "Low-Income Housing Tax Credit" financed rental housing through its affiliate, the National Equity Fund (NEF).
The terms and conditions for any specific funding are set to meet the needs of the community, the project itself and the project sponsor. LISC will negotiate loan terms, disbursement and repayment conditions and schedules as well as any special conditions.
Interest Rates vary according to the term and type of the loan. Loans can be used for residential, commercial, or industrial real estate and for community facilities.
Terms reflect the risks associated with a particular project, the developer's overall track record and LISC's experience with the project sponsor. Terms vary depending on what a project needs and the type of loan. Maturities vary, though loans are generally in the range of two to seven year. Standard terms are as follows:
- Acquisition and Pre-development Loans: Interest due quarterly with principal due at construction closing
- Construction Loans: Interest due quarterly with principal due at construction completion, upon sale of the property, or the securing of permanent financing
- Mini-Perm Loans: Principal and interest due monthly. Amortization schedules are negotiable.
- Revolving Loan for Rehab and New Construction For-sale Projects: Principal and interest due at the time of sales.
LISC charges a closing fee of 50 to 100 basis points and legal fees at the local office's discretion.
How Do I Apply?
Eligibility
The community must support organization
and project. The project should be a community building activity for the
neighborhood. The organization must be in good standing with the State of
Ohio and the project must be in the Cleveland/Northeast Ohio area. The
organization is also required to submit current financial reports, prepared by
independent auditors, showing that the applicant's fiscal condition is sound.
Application
The Northeast Ohio LISC program has a formal application and is available upon
request. However, before doing so, you should discuss your project or
program with a LISC Program Officer as early as possible. Preliminary
discussions will allow the Program Officer time for site visits and meetings
with key staff and board members. Staff recommendations are made to the
Northeast Ohio LISC Regional Advisory Committee and to National LISC based on
discussions with organization's staff. Any project financing in excess of
$750,000 and business loans require the approval of the national LISC Board of
Directors, which meets quarterly.
The Northeast Ohio LISC has a formal application and is available upon
request. The following information will be requested as part of the formal
proposal process.
Application Information
- Area served
- Demographics of the target area
- Organizational mission, history, track record, current strategies list of organization's leaders and their affiliations
- Evidence of community support
- Financial Information
- Last three years audited financial statements
- Year-to-date financial
statements
Current year operating budget - Tax number, evidence of tax status and evidence of good standing with state of Illinois
- Project/Program Request
- Description of project
- Description of how the project fits into long-term plans for the community.
- Financial proformas and/or budget for the program or project. If the request is for a loan or equity investment, the pro forma should reflect repayment or return on the investment to LISC.
- Form of collateral, if required