Lending is a tricky business. It s a delicate balance between helping someone and pushing them off the

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1 Lending is a tricky business It s a delicate balance between helping someone and pushing them off the cliff Virginia Community Capital and the June 18, Lending is a dangerous business. Even though you know you are in the right place and doing the right thing, you never know how hot things can get. 3 4 Who is Virginia Community Capital? VCC is a new loan and investment solution for Housing and Economic Development VCC is a Non-profit CDFI focused on building a sustainable financing model VCC was initially capitalized with $15mm from the State of Virginia - $10mm in cash and $5mm in loans At 12/31/07, VCC s assets = $28.0mm, VCC s equity = $19.0mm VCC is focused on community development activities activities that support affordable housing, create jobs, revitalize neighborhoods, expand community services 5 6 1

2 Where is Virginia Community Capital? What does VCC Offer? We operate statewide throughout the Commonwealth Our personnel are currently located in Richmond and Christiansburg Jane Henderson, President, Christiansburg Bill Skeen, Chief Credit Officer, Richmond Maurice Green, Chief Financial and Operations Officer, Christiansburg Dawn DeHart, Senior Lending Officer, Christiansburg Bob Adams, Project Development Advisor, Richmond Cynthia Maxwell, Loan Portfolio Manager, Christiansburg Kim Burchette, Manager of Administration, Christiansburg We are calling in markets where traditional capital is not flowing We are focused on working through partnerships with state/local organizations, city governments and traditional financial institutions Flexible capital in the form of loans (and ultimately investments) for community development projects We will consider projects with little equity We will work with less experienced non-profit developers We will take second and third collateral positions We will consider the track record of organization in underwriting Free technical assistance to newer groups or towns that are trying to formulate CD deals Willingness to exam projects with a can do approach our personnel understand government funding sources CDBG, HOME, LIHTC, NMTC, etc. Willingness to be part of multi-funding scenarios 7 8 How did VCC go to Market Long Term, Vision for VCC We officially opened for business in 2Q, 2006 about 24 months ago We launched softly with a few products, outreach calls and presentations Focused on real estate secured projects initially Working with partners for outreach and expanded marketing Actively looking at small New Markets Tax Credit (NMTC) deals, have access to secondary markets for NMTC and small business deals We launched our website in late September Visit us at Total loans since inception: 24 loans for $8.6 mm Place $7M of the capitalization into a new, regulated financial entity in 3rd quarter, 2008 (Community Capital Bank of Virginia) Leverage the initial capitalization into a $ MM entity Create a financing network that brings capital to non-traditional markets Provide a financing delivery system for local and statewide initiatives: Supplemental Loan Program w/ weatherization & indoor plumbing Bring more capital to microlending programs Become a statewide originator for national capital providers Bring additional NMTC capital into the Commonwealth 9 10 Benefits for Virginia VCC s Lending Focus Access to free technical assistance for community development deals Additional source of loan funding for community development deals affordable rental housing development homeownership and home improvement initiatives revitalization of downtown areas and neighborhoods mixed use development projects housing and economic dev. Not a competitor for local banks we work with the banks to create lending partnerships Lender with an understanding of VHDA, DHCD, HUD funding sources * Affordable Housing Loans * Economic Development Loans * Community Facility Loans Mission focused willing to work with other funding sources and credit enhance deals

3 Affordable Housing Loans Community Facilities Loans We look to fund housing projects that meet the market need for decent and safe housing, constructed at an affordable cost, that deliver affordable rents or sales prices, generally for families living at 80% or less of area median household income. We look to make facility purchase and renovation loans to non-profit organizations to help them enhance their delivery of critical social services Housing and Community Services Sample Deals Loan to Habitat organization to purchase mobile home park Loan to CDC in Lynchburg for home improvement program Loan to create affordable housing for persons with mental disabilities sponsored by local Services Board Loans to house local non-profit organizations Loans to support LIHTC deals Economic Development Loans We look to extend economic development loans to successful small to medium size business that need debt capital to expand; and that will create living wage jobs. Generally in areas where above average unemployment levels are a major concern Economic Development Sample Deals Impact Tracking - Housing 2006 / 2007 Loan to a small business to purchase permanent facilities (funding partner was Mt. Rodgers Planning Commission) Loan to revitalize an abandoned grocery store; converting it into smaller, rentable retail space Loan to entrepreneur to open new automotive repair shop Mixed use project 8 apartments and 6,000 square feet of commercial space on Main Street Loan to CDC to fund small business loans in Hampton Loan to CDC to fund micro loans in Fairfax Housing # Transactions $ Transactions # Units New $ Units New # Units Rehabbed $ Units Rehabbed # LMI Tracts 10 $5.3 million 538 $2.8 million 85 $2.6 million

4 Impact Tracking Economic Development Impact Tracking Community Facilities Small Business # Transactions 2006 / Community Facilities # Transactions 2006 / $ Transactions $4.0 million $ Transactions $630,000 # New Jobs 46 # New Jobs 18 # Jobs Retained 11 # Jobs Retained 8 # LMI Tracts 1 # LMI Tracts VCC s Current Loan Portfolio Preservation Acquisition Loan Program What? A $30 million site acquisition loan pool to preserve and improve existing affordable rental housing units in Virginia. An individual loan is affectionately called PAL. Who? Funding partners include VCC, The National Housing Trust Community Development Fund, VHDA, DHCD, Bank of America, SunTrust and Wachovia

5 Why? 1/3 of Virginians rent Almost everybody rents at one time or another The supply of affordable rental units is declining due to conversions to higher rentals/condos, waning federal subsidies and the deterioration of aging properties. Nationally, 1.4 million affordable housing units were lost between 1995 and 2005 Why? Over the next 5 years, contracts on 17,600 Section 8 units in Virginia will expire. 55% of these properties are privately owned and owners are more likely to opt out or sell to market rate developers. Virginia has more than 10,000 Section 515 rural housing units whose owners are interested in selling due to market forces. Preserving affordable units is cost-effective and environmentally sustainable as it costs a third less to renovate an existing apartment vs. building a new one. Improving an existing building reuses resources and has less of an environmental impact than demolition and new construction How? Providing a loan up to $4.0 million, to acquire and hold aging affordable properties. A loan with time flexibility - to proceed with tax credit and/or grant applications. A loan with interest only monthly payments, with blended interest rates between the public/private funding partners, fixed at closing for the term of a loan. A loan term up to 36 months. How? Providing fast loan approval on loans with expert underwriting by National Housing Trust, shortening time to approval and closing. Loans based on the successful experience of the developer. A loan up to 100% of cost, depending on existing equity, or enhanced equity appreciation based on preliminary appraisal and projected cash flow Other VCC Preservation Loan Products Lending Mixed-Use Commercial/Housing Construction and Permanent Mortgage Loans Mixed-use Commercial/Housing Predevelopment Loans Virginia Supplemental Loan Program It isn t for sissies or the faint of heart.. and you have to fight for every morsel especially in this bear market Single Family Lease-Purchase Development Loans

6 How you can help us. Visit our website: Tell the VCC story to your staff and colleagues Spread the word about our product offerings Refer potential projects to us for follow-up Keep us informed about emerging loan needs, new audiences - folks we need to meet and talk to VCC s Lending Team Contact Information Jane N. Henderson serves as President of VCC after retiring from Wachovia Bank with 19 years of banking experience, primarily in the community development field. In her career, Ms. Henderson developed and led corporate Community Development Divisions for Dominion Bank, First Union and Wachovia Bank. William E. Skeen serves as the Chief Credit Officer of VCC after retiring from Wachovia Bank after 22 years in commercial banking and community development. Mr. Skeen has vast experience in project development, financing and management, as well as, organizational development. Robert J. Adams serves as the Technical Assistance Officer of VCC and has over 30 years of experience in the affordable housing industry. Mr. Adams is the former Executive Vice President and Chief Operating Officer for Community Housing Partners Corporation where he tripled the size of the organization s multifamily portfolio which today totals over $100 million. Mr. Adams is the former President of the National Low Income Housing Coalition, Deputy Director of the Virginia Department of Housing and Community Development and Director for Program Development with the Virginia Housing Development Authority. Cynthia L. Maxwell serves as the Loan Portfolio Manager of VCC and has over 20 years of experience in finance, real estate and construction. During her career, Ms. Maxwell has managed the real estate closing operations for several attorney firms and was a lead processor for construction lending for Chase Home Finance. Dawn H. DeHart serves as Senior Vice President of VCC and is a senior lending officer. Ms. DeHart has 25 years of commercial banking experience. Her previous banking positions include Branch Officer, Vice President of Credit Risk Review, and Vice President of Risk Management. Ms. DeHart has spent the last 8 1/2 years working as a senior lender for a Virginia-based Certified Development Company lending SBA 504 funds to qualified businesses for commercial real estate acquisition. Jane Henderson, President Robert J. Adams, Project Devel. Advisor Virginia Community Capital Virginia Community Capital 990 Cambria Street, N.E. 100 West Franklin Street, Suite 301 Christiansburg, VA Richmond, VA , Ext [email protected] [email protected] Bill Skeen, Chief Credit Officer Dawn DeHart, Sr. Lending Officer Virginia Community Capital Virginia Community Capital 100 West Franklin St, Suite Cambria Street, N.E. Richmond, VA Christiansburg, VA , Ext. 102 [email protected] [email protected]