LA CDFI Gets National Credit Ranking
For years, Community Development Financial Institutions (CDFI) have been seen as risky investments, often overlooked for more than a handful of affordable housing developments. One LA company is changing that perception, and we sat down with its CEO to find out how.
Clearinghouse CDFI CEO Doug Bystry tells Bisnow the group recently earned a AA credit rating from Standard & Poor's, the nation's first non-depository CDFI to get rated. Doug says the process has been in the works for some time, with the hope that lenders would take the group more seriously. Moody's listened, he says, but "wasn't ready." In case you're not familiar with a CDFI, the organizations usually bridge the financing gap between conventional lending and the needs of low-income and distressed communities.
Doug tells us one of the company's most notable projects is providing $14M in New Markets Tax Credit allocations to build affordable housing at the massive One Sante Fe project in the DTLA Arts District. Doug says the work will help create 1,900 construction jobs and about 400 full-time gigs upon completion. Doug says the S&P rating is a "game changer" and that he expects the group to be able to attract debt capital and equity, opening up a lot of doors for the firm, perhaps even including pension fund investors. With the rating, Doug expects to provide up to $100M in loans this year, which would be up from about $60M last year.