The Revolving Loan Pool

Alright, let’s talk math. Everyone’s favorite subject, right?! It might not seem like the most glamorous idea for a blog but when you hear about what HOME, Inc. has done, we hope you gain a bit more passion around math, or non-profits, whichever floats your boat. 

Let’s start with the basics. HOME, Inc. wanted to create a revolving loan pool large enough to acquire land, start projects and reduce the amount of needed in bank loans.  By doing this we could start and complete projects in less time and decrease the amount of borrowed funds.   Reduced construction time and interest paid to lenders decreases the cost of the home to the homebuyer.  Once the house is sold, the money we used from our loan pool is replaced and used in another development project.  The loan pool is strictly for housing development. 

The idea of the revolving loan pool all started in 2017. HOME, Inc. received a $100,000 grant from the Community Foundation of Greater Des Moines in order to create a loan pool.  Those funds were matched by a development grant for Polk County.  HOME, Inc. used our Community Housing Development Organization program income to add $100,000. The loan pool became $300,000 (great job with the math!) and we were ready to start.

There is no doubt that our loan pool has helped to increase our efficiency and capacity while allowing us to keep our homes as affordable as possible. In 2017 we built 5 homes and $690,000 in bank loans and in 2018 we built 6 homes and borrowed $345,000.  In 2019 we expect to build 8 new units. Through increased capacity and using our loan pool as leverage, we will receive $1 million in 0% interest loans and grants to further reduce our need to borrow.

We thank the Greater Des Moines Community Foundation and Polk County for their investment in HOME, Inc.  This grants provided a “gift” that will continue to help provide opportunities for affordable housing today and in the future. 




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