The California Community Reinvestment Corporation (CCRC) has closed a $114 million securitization of tax-exempt loans, marking the first time a Community Development Financial Institution (CDFI) has securitized affordable housing multifamily loans in the municipal market. The transaction, structured in two tranches, was 4.8 times oversubscribed and achieved highly competitive pricing, including the strongest pricing to date for the Class A-1 tranche. Wells Fargo served as underwriter, and U.S. Bank acted as trustee and custodian.
The securitization pool consisted of tax-exempt loans secured by 21 affordable housing properties comprising 1,573 units serving families, seniors, veterans, and formerly homeless households. All the loans were originated and funded by CCRC, which will continue to service the portfolio and provide ongoing asset management services. CCRC originated the loans through its tax-exempt loan program, and its use of the municipal market represents a new strategy for recycling program capital. The structure, which has been used by only a handful of financial institutions since it first emerged in 2019, requires substantial operational capacity and a strong credit profile, capabilities that are rare among CDFIs nationally.
“Affordable housing lending depends on having the capital available to keep lending, and this transaction gives us exactly that,” said Tia Boatman Patterson, President and CEO of CCRC. “By recycling capital already deployed in our loan portfolio, we’re able to continue financing the developers and communities that need it most, without waiting on new sources of funding.” The new capital raised through the securitization strengthens CCRC’s ability to continue funding permanent loans for affordable multifamily housing developments across the state, supporting working families, seniors, veterans and individuals experiencing or at risk of homelessness.
This transaction is significant because it demonstrates a scalable model for CDFIs to access the municipal bond market, potentially unlocking billions in additional capital for affordable housing. By securitizing tax-exempt loans, CCRC can recycle capital more quickly, accelerating the pace of lending in a state with a severe housing shortage. For more information about CCRC, visit https://www.e-ccrc.org/.
