NHC Member Partner Bank of America was a 2009 “Pioneering Housing Strategies” Award finalist for its End to End Taxable (E2E) Term Loan product. E2E is the result of a first-of-its-kind collaboration with Impact Community Capital, LLC (Impact), an organization formed by top insurance companies seeking to promote socially responsible investments in underserved communities.
Created to broaden the secondary market for financing affordable multifamily housing with the goal of helping to lower the cost of debt, E2E is designed for projects targeting low- to moderate-income renters with incomes primarily at, or below, 60 percent of the area median income.
Specifically, the partnership enables Bank of America to combine construction loans with permanent loans – providing a single-commitment, single-closing approach to financing affordable multifamily housing or mixed-use real estate. Following construction completion and loan conversion, Impact purchases the permanent loan and then pools loans that can be rated by a major rating agency, creating mortgage-backed securities that meet the investment needs of large institutional investors, particularly insurance companies.
To date, Bank of America has closed and sold over $246 million in E2E Term Loans to Impact’s investment vehicle. The bank’s construction financing associated with E2E Term Loans have reached more than $460 million since the product’s first roll out. These financing commitments have produced more than 12,600 affordable units in 144 housing developments across the U.S. that are either under construction or occupied by low income renters.
It is important to note that the E2E product is part of Bank of America’s $1.5 trillion, ten-year community development lending and investment goal that was initiated in January 2009.