REVOLVING LOAN FUNDS

Limited Equity Co-op Housing

In many areas of the United States, and particularly in urban areas, there is a severe lack of affordable housing. Working men and women in low-income communities cannot find decent housing that they can afford. Limited-equity cooperative housing has proven a successful solution to this problem.
In both rural and urban areas, senior citizens are suffering from a lack of affordable housing with appropriate services. In rural areas, small towns are suffering because seniors are being forced to leave to find suitable housing. Co-ops are a practical solution.

For pre-development housing loans, CDF has Revolving Funds consisting of three parts: The Hillman-Dubinsky Labor Cooperative Fund, the Jacob Kaplan Fund, and the Kagawa Fund.

For more information on how cooperatives can contribute solutions to the senior housing issue, click HERE (Liz’s report on senior housing).

Hillman-Dubinsky Labor Cooperative Fund

The Hillman Dubinsky Fund was created within the Cooperative Development Foundation to help provide affordable, desirable, limited-equity co-op housing for America’s working men and women and their families. The Fund provides pre-development financing, which is usually high-risk and difficult to obtain, but is needed in order for projects to get off the ground. Pre-development costs covered by loans from the Fund include market and feasibility studies, site appraisal and control, financial packaging, preparation of architectural design, legal fees, and other costs needed to package a housing project and obtain long-term financing.

The Hillman-Dubinsky Fund is a part of CDF’s Revolving Loan Funds. As projects obtain permanent financing, the loan extended by the Fund is repaid and redeposited into the Fund to assist other projects. If the pre-development work indicates that the project is not feasible, the loan becomes a grant.

The Hillman-Dubinsky Fund was endowed by the United Housing Foundation in the names of two labor cooperative leaders, Sidney Hillman and David Dubinsky.

Sample Projects and Accomplishments:

• Provided a $10,000 loan to the Center for Cooperative Housing to determine the feasibility of converting a 138-unit building to cooperative ownership. Cooperative conversion would permit current tenants, primarily low-income residents, to remain in their homes and encourage them to take an active role in the administration of their building.
• Provided a $5000 loan to the Northcountry Cooperative Development Fund to expand its
ability to lend for the development of co-op housing in the upper Midwest.

Jacob M. Kaplan Fund

The Kaplan Fund makes soft loans for pre-development expenses of co-op housing for low- and moderate-income seniors.

Sample projects and Accomplishments:
• $104,000 loan to develop seven senior co-op housing projects in Minnesota, Nebraska, and Michigan.
• $195,000 in loans to develop the Silver Glen Senior Housing project near Seattle, Washington, creating 120 senior housing units.
• First portion of $100,000 loan to Mutual Assisted Senior Housing project in Manhattan, a prototype for affordable, limited-equity, assisted living senior housing for urban areas.

Click here for Sponsor Guidelines.

Click here for Submission Guidelines.

Student Cooperatives/Kagawa

Many students depend on the availability of quality -- yet affordable -- housing in order to attend college. Co-op housing is widely recognized as the best option. In addition, student housing co-ops provide students with an opportunity for hands-on management experience and leadership development, preparing them for the future.

The Kagawa Fund and the Kagawa Student Co-op Reinvestment Fund are governed by a board of trustees drawn from the student housing community. Current trustees are Joan Bulmer of ICC at the University of Michigan, Brian Donovan of ICC at Austin, Gary Ellis of Riverton Community Housing in Minneapolis, George Proper of University Students Cooperative Association in Berkeley, and Alan Robinson of College Houses in Austin.

Kagawa Fund

The Kagawa Fund was established by the Japanese Consumers Cooperative Union in memory of Dr. Toyohiko Kagawa, a prominent Japanese cooperative pioneer and educator. It is a revolving loan fund which is used to promote student cooperatives, particularly housing co-ops. In 1990 the Ray Arvio Memorial Fund was added to the Kagawa Fund. Ray Arvio was a cooperative activist and educator who shared Dr. Kagawa’s philosophy. In 1997 the Art Danforth Cooperative Education Fund was added.

Sample projects and accomplishments:

• Loaned $20,000 to help the Campus Cooperative Development Corporation purchase a building in Chicago and transform it into a housing co-op.
• Loaned $20,000 for the permanent financing for and improvements to a student co-op housing property in Chicago.
• Helped support the purchase and renovation of a property for lease to the Santa Cruz Student Housing Co-op. The house serves as the first permanent home for the co-op, and as the basis of a multi-site student cooperative system on campus.
• Loaned $31,000 for the purchase of a property in Santa Barbara, CA.
• Loaned $35,000 for the rehabilitation of two properties in Santa Cruz, CA.

Kagawa Student Co-op Reinvestment Fund

This Fund was established in 1997 as a social investment fund to pool resources from older and/or larger student co-op organizations and to increase the funds available for loans to newer and/or smaller student co-op organizations. As of February 2006, five organizations have made eight investments totaling $289,000 and the Fund has made 14 loans totaling $412,304. Seven loans are current, one loan defaulted, and six were repaid. The loans are for purchase of property, rehabilitation of property, and a student business.
Loans from both the Kagawa fund and the Kagawa Student Reinvestment fund have allowed borrowers to leverage more than six times the loan amounts, and have provided affordable housing for more than 274 students each academic year.