Meeting a Housing Need: Community Development Resources Expands

Community Development Resources (CDR), which has been focused primarily on microlending to small businesses, is expanding into affordable housing to meet a real need for affordable housing in the Lincoln Metro.

Executive Director Farshad Maltes credits the city of Lincoln, the Lincoln community and a consortium of banks with helping CDR grow in this new direction.

“We’re trying to provide creative financing that can be blended with more traditional sources of capital to make more affordable housing projects viable,” he said.

For example, a recent project involved a deal that used a 4% of federal housing tax credits, which don’t have as large of subsidies as the 9% tax credits, but there is no cap on their availability.

“We can figure out more ways to get deals done with 4% tax credits,” Maltes said. “It will greatly expand the amount of affordable housing debt that we can provide to folks at 80% or lower of county median income. Without getting too much into the weeds, we’re trying to be able to blend our financing with other sources to get more affordable housing deals done in the Lincoln Metro area.”

Although CDR can work throughout the state on microlending, it will concentrate its affordable housing lending in the Lincoln Metro area. That’s partly because of the organization’s funding sources but CDR also wants to build a successful track record before expanding further on affordable housing.

Peer Lending Group 

According to Loan Officer Jeff Breunig, Rick Wallace founded the organization 25 years ago. Ten to 15 small businesses got together, and each one put in some of their own money. When one of those businesses needed a loan, they went before this peer group to present their loan request.

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This led to Wallace getting CDR’s community development company (CDC) certification and its community development financial institution (CDFI) designations, which allowed the organization to enter the field of microloans with the Small Business Administration (SBA).

“Up to this date we’ve done lots of microlending,” Breunig said. “The monies are provided through the SBA. [Borrowers] can borrow up to $50,000, repayable over a period of time. We also do 504 lending, which is lending to businesses that are purchasing real estate or heavy equipment.”

The organization also provides technical assistance to individuals who are seeking to start businesses or current business owners who need help.

Many of CDR’s borrowers are referred by banks that are unable to give them a conventional loan. Other borrowers find the organization through
its website.

“We want to make them a bankable individual and small business,” Breunig said. “After we’ve worked with them for several years, we hope they can go to banks with a track record showing profitability and their ability to own and manage a business, so they can become bankable in terms of lines of credit and the traditional types of bank loans.”

Expanding Footprint

“We have three and a half employees right now, but because we’re in expansion mode, we’re looking for folks who would be interested in working with us in the small business lending and affordable housing space,” Maltes said.

CDR is working to expand its footprint throughout the state. The organization plans to do more outreach to community organizations.

“Up to this point, we haven’t done a lot of advertising to let people know who we are and what we do,” Breunig said. “Steve Bors, who is on our board, has a marketing background and is helping with that.”

The organization will focus on underserved groups. 

“I’m especially interested in reaching out to faith-based communities, especially in the Latino and African American communities, and entities like the Urban League so we can provide more small business ownership opportunities to these underserved groups,” Maltes said.

Within the next one to two years, CDR plans to roll out a program where a small group — maybe 10 individuals — would enter a training track. If they complete the training track and keep their credit clean, they would automatically get a loan of up to $20,000 for either starting or expanding a business.

On the affordable housing side, one of the things CDR has envisioned is converting an apartment complex into affordable condominiums.

“I would like to dramatically increase the amount of capital invested in affordable housing through CDR and also increase our microlending,” Maltes said. “I would like to expand our affordable housing lending to at least $10 million, if not more, within the next two years.”

A Nebraska Wesleyan University graduate, Breunig interned at Cornhusker Bank and stayed with the firm for 23 years. He then worked in commercial lending at Pinnacle Bank for seven years. He has been with CDR for over 12 years.

Maltes, a former finance professor, worked for 25 years with the Wisconsin Housing and Economic Development Authority (WHEDA). As head of the economic development program and the New Market Tax Credit Program, he oversaw a portfolio of $575 million of projects. In New York, Maltese had been executive director of a small CDFI where he oversaw about $8 million of affordable lending finance.

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