Neighborhood Finance Corporation

Forgivable Loan: As stated in loan origination description, each transaction that NFC provides to our borrowers includes a forgivable loan for property rehabilitation. The forgivable loan is a 0% interest rate loan for either 5 or 10 years. A 5 year forgivable loan is granted on all single family dwelling transactions. A 10 year forgivable loan is granted on all transactions that are downsizing a multi-family dwelling back to a single family dwelling. There is no repayment required on the forgivable loan as long as the borrower is residing in the home. The forgiven amount is reported to the borrower on Form 1099C each year until the entire amount is forgiven. Since inception, NFC has awarded forgivable loans totaling $61,377,391 through December 31, 2024.In 2024, NFC closed $1,637,810 in forgivable property rehabilitation loans and $78,000 in closing costs forgivable loans.All NFC loans for home purchase have a home inspection. In Polk County, this role is provided by a full-time renovation coordinator that is on the NFC staff. In Cedar Rapids, this is provided by a city employee. In both locations, the renovation coordinator makes sure all code violations at the property are addressed through the homeowner's property rehabilitation projects. The renovation coordinator reviews all bids for cost reasonableness and provides authorization for payout once the property rehabilitation project is properly completed and meets the borrower's satisfaction. The renovation coordinator notifies NFC when the project is completed and verifies that it was done in a workman-like manner.Additionally, these property rehabilitation projects improve the value of the homes in these neighborhoods. This can lead to increased values for other homes in these neighborhoods.

At NFC Properties LLC, our goal is to provide safe, affordable, quality housing to owner occupants. In 2024 NFC Properties LLC acquired 11 properties. Of those 11 properties, 1 was an existing home and 10 were infill lots within the City of Des Moines for new construction in primarily low and moderate income census tracts. During 2024, 5 units in NFC Properties LLC housing inventory completed rehabilitation, and 8 of the inventory units were sold. NFC Properties LLC focuses on energy efficiency by adding high efficiency furnace and A/C, vinyl Low-E windows, and blown cellulose insulation. This helps ensure that the home stays affordable for the future homebuyer.

The Home Buyer Education services are offered in Polk and Linn counties through service agreements with local nonprofit HUD approved housing counseling agencies. These services are offered in an individual, classroom, and online format. NFC refers home buyers for home buyer education and existing homeowners for financial/debt management and budgeting. During 2024, NFC, through our partner organizations, provided home buyer education to 95% of home buyers, and budget and credit counseling and education to 8.6% of existing homeowners. In total, 18.6% of NFC borrowers received education and/or counseling through our partner agencies. Education was completed through HUD approved housing counseling agencies in Des Moines and Cedar Rapids, Iowa, or through HUD approved online platforms.NFC has agreements with the City of Des Moines (the city) and Polk County (the county), wherein the city and the county agreed to contribute money for the specific purpose of funding neighborhood housing revitalization programs. Under the agreements, cumulative contributions by the city and county have totaled $33,537,687 and $32,285,687 respectively, through December 31, 2024. During 2022, the city and the county extended their agreement until June 2027. The city and the county will each contribute at least $1,000,000 annually through the year 2027. NFC Cedar Rapids LLC has an agreement with the City of Cedar Rapids, wherein the City of Cedar Rapids agreed to contribute money for the express purpose of funding neighborhood housing revitalization programs within the City of Cedar Rapids. Under the agreement, cumulative contributions by the City of Cedar Rapids have totaled $6,000,000 through December 31, 2024. The City of Cedar Rapids will contribute at least $500,000 annually through the year 2028. Except in fisal year 2024, NFC declined the payment due to city budget constraints and NFC having enough capital for forgivable loans and reserves.NFC has agreements with the City of West Des Moines, City of Urbandale, and City of Windsor Heights, wherein they each agreed to contribute money for the specific purpose of funding neighborhood housing revitalization programs. Under the agreements, cumulative contributions by the City of West Des Moines have totaled $1,600,000, cumulative contributions by the City of Urbandale have totaled $296,000, and cumulative contributions from the City of Windsor Heights have totaled $75,000.