CORPORATE AND INSTITUTIONAL FAQS

Yes, these projects are usually financed in the following manner:  Loans (including construction and permanent financing), Lines of Credit, Low-Income Housing Tax Credits, Letters of Credit, Senior and/or Subordinated Debt Financing, Equity Investments, and Tax Exempt Bonds.

The Wachovia Community Development Finance Group has a targeted commitment and focus on serving the needs of lower-income communities.  The group brings a specialized skill to the complexity of the financing needed to complete community-based projects. We can:

• Provide financing with an array of flexible products designed for this market segment
• Offer knowledge and experience in using government programs and layered capital structures
• Assist in identifying the right local, state, or federal programs to find non-traditional financing solutions
• Provide partnerships with federal, state and local agencies and social investment groups
• Leverage relationships with other financing divisions of the bank to provide solutions tailored to meet the needs of each project.

The following are not eligible for community development financing:

• Loans to churches (unless the loan proceeds are used to provide a social service to lower-income individuals;  an independent source of cash flow is needed to service the loan)
• Loans to general non-profit organizations whose primary purpose is not community-development focused
• General business start-up loans

The primary purpose of community development is measured by the community impact derived from the project when completed.  For example, the number of affordable housing units created, the number of local jobs created, or the types of community services provided to local residents, is usually considered when evaluating the outcome of the project.

Some examples of community development projects include:

• Loans that support affordable housing rehabilitation and construction, including single-family for sale and multi-family rental units
• Loans to non-profit organizations serving primarily lower-income housing or other community economic development needs
• Loans that support the use of historic and low-income tax credits
• Letters of credit that bridge construction financing or equity financing of low-income tax credit transactions
• Loans to financial intermediaries, including community development financial institutions, small business development consortia, minority- and women-owned financial institutions and low-income or community development credit unions
• Loans to finance environmental clean-up or redevelopment of an industrial site in lower-income communities
• Loans to support commercial property acquisition and construction for community services (such as daycare centers and charter schools)
  

The Community Development Finance Group makes loans and equity investments designed primarily to promote community welfare through the economic rehabilitation and development of low-income areas, by providing housing, services, or jobs.  Projects that increase the number of affordable housing units, promote the economic revitalization in urban and rural areas, and finance small businesses and small farms are examples of these specialized projects.  Most of these projects rely on government subsidies in order to provide affordable, below-market rents or sales prices affordable for the incomes of the people being served.