September 28, 2015

A Hartford community lender widens its footprints

PHOTO | Contributed
PHOTO | Contributed
Sohodra Dilchand bought a fire-damaged, vacant two-family home in Hartford’s Clay Arsenal neighborhood. Hartford Community Loan Fund provided her a $170,000 construction-rehab loan to rehab the historic home.
PHOTO | Contributed
207 Garden St. by next spring will be Hartford Community Loan Fundís new headquarters.

The $2 million in federal money recently handed to an obscure but vital community lending nonprofit couldn't have come at a better time, its chief says.

The Hartford Community Loan Fund (HCLF) is a local credit portal responsible for sparing and repairing hundreds of blighted city homes, and saving dozens more property owners from losing theirs to unpaid taxes.

Executive Director Rex Fowler says the nonprofit agency founded in 1994 to funnel hard-to-get capital to small businesses and property owners in the city's South End had been running short on lendable capital. Its loan staff, too, was overwhelmed, so the federal funds will enable HCLF to hire a third, full-time loan officer to whittle the backlog.

Moreover, HCLF's lending and advocacy reach has expanded to serving residents and property owners in the newly designated "promise zone'' covering a cluster of neighborhoods in the city's North End.

Finally, the money will enable HCLF to set aside $600,000 of loan capital for a pilot collaboration with the city of New Britain, beginning this fall, to help property owners there rehabilitate their blighted properties, Fowler said.

All of that, he says, fits with HCLF's mission "to provide and promote affordable financial services that benefit the low-wealth residents of Hartford.''

Born in 1994, with backing from a handful of influential state and city legislators and $6 million of state money to lend, the then South Hartford Initiative primarily focused on the credit needs of small businesses and property owners in a six-square-mile quadrant of the city.

HCLF is among a wide family of nonprofit community-lending organizations nationwide that vie for funding through the U.S. Treasury Department's Community Development Financial Institutions Fund.

The Hartford fund, plus two other Stamford community lenders, were among 152 similar organizations nationally to collect $160 million of the $435 million requested in the 2014-2015 funding round. However, HCLF was one of 14 — and the only one in Connecticut — to draw Treasury's maximum $2 million award.

"I'd like to think it was because we submitted an excellent grant proposal,'' Fowler said.

More likely, he said, it was due to HCLF's track record of identifying its community's credit needs and devising programs — lending, technical assistance and advisory services — to meet them.

Costa Del Sol restaurant owner Pepe Feijoo was one of the first beneficiaries of HCLF's lending that began in 1998, to expand his South End eatery on Wethersfield Avenue. HCLF, with a bank partner, lent Feijoo $120,000. Since 1997, HCLF claims it has facilitated more than $26 million in financing to city businesses and property owners.

"At that time, I needed help,'' Feijoo said. "They were there for me.''

At the time it was active in small business lending, HCLF was very much "a lender of last resort,'' said Fowler, its only executive director since his hiring in 1997.

"But for the lending we do now … ,'' he said, "We see ourselves as the lender of 'first resort'."

In 2006, HCLF reorganized to focus less on commercial loans like ones that another local nonprofit lender HEDCO Inc. was making into a dual role of rehabilitating the city's aging housing stock.

It's under that model that HCLF has had its greatest impact, Fowler said. As of June 30, it had rehabbed or created 622 dwellings, work that had created 657 jobs.

Supermarket efforts

HCLF's other mission centers on advocacy on behalf of the city's neediest. For instance, the community lender was the first, Fowler says, to propose development of a supermarket in the city's Downtown North property, across from the construction site of the Yard Goats minor-league ballpark.

The nonprofit even got as far as signing with a local supermarket operator and development partners. However, those plans fizzled after the city chose to partner with Centerplan Development to build the ballpark. Later, Centerplan also committed to having a supermarket anchor its proposed mixed-use development.

HCLF commissioned a study, Fowler said, showing that city residents spend $40 million a year to travel by car or mass transit to shop in suburban supermarkets.

HCLF got involved two years ago helping property owners who are threatened with losing their assets due to unpaid property taxes hang onto them. Since then, the agency has arranged eight tax lien foreclosure prevention refinancings totaling $713,000, according to its homepage.

Looking ahead, Fowler said the agency "will continue to grow our construction/rehab loan program.''

More than $5 million already has been lent in the three "promise zone'' neighborhoods — Upper Albany Avenue; Clay-Arsenal; and Northeast, he said.

In addition, by next spring HCLF will relocate staff and operations to new quarters in a three-story building on Garden Street, in the shadow of The Hartford's Asylum Hill campus.

The once-derelict building is in the final stages of rehabilitation with ground-floor retail space; four apartments on the middle floor; and HCLF offices to occupy the top floor.

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