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TOPA Finance (DC only)
In response to the market’s complexity we have developed financial products matching DC’s housing public policies and incentives. In 2012 we launched the Earnest Money Deposit Loan (EMDs) partnering with the National Housing Trust (NHT). This product takes advantage of the opportunity to create low-income, tenant-owned housing under the District’s Tenant Opportunity to Purchase Act (TOPA). The loan provides tenant associations with affordable and risk-free capital to make an EMD, the first step under TOPA in purchasing their building.
The EMD gives low-income tenants the opportunity to assess whether they want to purchase and to arrange for the subsidy needed to repair the building and ensure affordability. Our loan is cash secured by the EMD, but CFE receives no interest unless the tenants are successful in arranging takeout financing. The risk and of potential of zero interest rendered the demand for this financing unmet by traditional banking institutions. A market vacuum CFE promptly filled.
Following a well-intended yet ultimately unsuccessful pursuit of a sustained co-op model to preserve the affordability of their 12-unit apartment residence, the tenants of a building on 61st Street, NE in the Deanwood neighborhood of Ward 7 negotiated the sale of the building. CFE, with a $140,000 loan in partnership with a local bank, financed the developer in purchasing the property from the co-op. The developer agreed to cap the existing owners’ rent for life at their current rate, with existing renters’ rents adjusted to the allowable CPI increases. Remaining vacancies will likely be filled by voucher tenants.
Exercising their rights under TOPA, residents of a newly formed tenants’ association in this Ward 8 neighborhood organized to explore purchasing their 65-unit building to match a 3rd party offer. CFE provided the group with a $170,000 Earnest Money Deposit (EMD) loan which enabled them to maintain control of the building and, ultimately, partner with National Housing Trust (NHT) to purchase the property. In 2018, NHT will pursue DHCD funds and low-income housing tax credit financing to modernize the property and provide long term affordable rental housing for residents living between 30% and 60% AMI. In addition, NHT signed a letter of intent to include the property in the new Douglass Community Land Trust.
Securing EMD funding is a critical first step in pursuing property purchase rights under TOPA, as it provides a building’s residents with needed time to assemble the requisite financing or identify a purchase partner.
Exercising their rights under TOPA, residents of a newly formed tenants’ association in this Ward 8 neighborhood organized to explore purchasing their 65-unit building to match a 3rd party offer. CFE provided the group with a $170,000 Earnest Money Deposit (EMD) loan which enabled them to maintain control of the building and, ultimately, partner with National Housing Trust (NHT) to purchase the property. In 2018, NHT will pursue DHCD funds and low-income housing tax credit financing to modernize the property and provide long term affordable rental housing for residents living between 30% and 60% AMI. In addition, NHT signed a letter of intent to include the property in the new Douglass Community Land Trust.
Securing EMD funding is a critical first step in pursuing property purchase rights under TOPA, as it provides a building’s residents with needed time to assemble the requisite financing or identify a purchase partner.
