Building Hope
Service Providers: Nonprofit LenderNonprofit Real Estate Developer
- less than one year
- one to three years
- more than three years of operating history or one charter renewal
- charter management organizations
- stand-alone schools
- single-site schools
Building Hope is a nonprofit organization that works to close the educational achievement gap by giving students access to high-quality public charter school education and providing schools with business services and school facilities solutions. In addition to being a nonprofit lender, Building Hope also provides the following real estate development services: credit enhancement, feasibility assessment, site identification and selection, fee-based development, turnkey development as long-term landlord, project management, and turnkey development with lease-to-purchase option. Building Hope also provides financing and project management support to multiple incubator sites as part of its Charter School Incubator Initiative (dba Building Pathways) in Washington, D.C., in partnership with the Office of the State Superintendent of Education.
Building Hope provides turnkey development, financing, financing technical assistance, and real estate technical assistance services. List of financing products available below:
| Terms (Years) | |
|---|---|
| Acquisition loans | 5 |
| Construction loans | 3 |
| Mini-permanent loans | 5 |
| Permanent loans | 29 |
| Predevelopment loans | 2 |
| Working capital | 3 |
| Maximum financing for a single project | $2,000,000 |
| Maximum equity for a single project | $5,000,000 |
| Maximum amortization (years) | 30 years |
When evaluating a school project, Building Hope considers the following factors: student and community impact, project risk (i.e., cost of project, fees, future space needs, equity requirements, and appraisal value), operator risk (i.e., board and school governance, role of the charter management organization, and academic program and track record), financial risk (i.e., affordability, financial position, budget management, and guarantees), demand (i.e., enrollment, waitlist, and marketing plan), expansion plans, political risk (i.e., length of charter, city political culture, and competition), and exit risk (i.e., supply of replacement schools, alternative uses/tenants, and take-out pro forma).
| Name of School | Total Project Cost | Lenders Involved |
| Breakthrough Montessori | $9,000,000 | Building Hope, CityFirst, OSSE |
| SST - Culebra | $N/A | PNC, Capital Impact Partners |
| Gem Prep Pocatello | $N/A | Vectra, Albertson Foundation |
| Osceola Science | $18,500,000 | EB-5, PNC |
| River City | $5,000,000 | OFN |
Key Statistics:
| Financial Overview | |
|---|---|
| U.S. Department of Education (ED) Credit Enhancement | $8,000,000 |
| New Markets Tax Credit (NMTC) allocation total | $0 |
| Community Development Financial Institutions Bond Guarantee Program (CDFI BGP) allocation total | $25,000,000 |
| Portfolio Statistics | |
|---|---|
| Total historic financing1 | $275,000,000 |
| Number of schools/projects supported | 233 |
| NMTC allocation employed for charter facilities | N/A |
| Number of schools supported with NMTC | N/A |
| CDFI BGP allocation deployed for schools | $5,100,000 |
| Number of schools supported with CDFI BGP | 2 |
| Remaining capacity in CDFI BGP allocation | $19,900,000 |
| Portfolio Performance | |
|---|---|
| $ amount of financing repaid/refinanced2 | $234,000,000 |
| NMTC matured/refinanced | N/A |
| Total number of transactions3 | 180 |
| Original $ amount of defaults4 | $678,500 |
| Number of defaults | 4 |
| Default rate (% of total $ amount of financing) | 0.25% |
| Default rate (% of total number of financings) | 2.22% |
| $ amount write-offs | $678,500 |
| Number of write-offs | 4 |
| Write-off rate (% of total $ amount of financing) | 0.25% |
| Write-off rate (% of total number of financings) | 2.22% |
Footnotes:
1Financing defined as grants, recoverable grants, loans, and guarantees.
2Includes full repayments only; does not include partial amortizations or restructurings.
3Number includes only those financings with a repayment obligation; it excludes grants.
4A defaulted loan is defined as one in which the school can no longer make debt service payments and the lender must litigate or foreclose for repayment. This figure represents the loan amount at origination, not the amount outstanding at default.
Last updated: December 2018
Disclosure: Information on this page has been provided by the organization. Any questions related to figures or programs listed should be directed to the contact shown above. Keep in mind that each school’s situation will differ slightly and you’ll need to speak to the contact listed for information specific to your school.