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New Low-Cost Loans Available for Nonprofit Organizations

March 21, 2007

Not-for-profit organizations with 501(c)(3) status that are looking to buy their own buildings, condos, or coops are now eligible for a new low-cost loan fund—the New Markets Loan Fund. The Fund provides up to 90% financing for acquisition: 40% from the Fund; 50% from a bank or other lender; and only 10% from the 501(c)(3). The Fund's portion of the mortgage loan, actually a second mortgage, is long-term (25 years), low-cost (below prime lending rate, based on 7-year treasury rates), and self-amortizing. The 40% loan is based on total project cost, including renovations, construction, and soft costs. By using the New Markets Loan Fund, not-for-profits can save their philanthropic donations for operating expenses. The buyer must occupy at least 40-45% of the building and can lease out the rest.

Sponsored by the nationally innovative Community Reinvestment Fund, the fund is run locally by the Long Island Development Corporation. For information contact LIDC at 866 433 5432, roz-goldmacher@lidc.org.