2011 - 2012 Lowcountry Housing Trust Annual Report

Gr

ow

inG

ou

r C

ap

aC

ity2011-2012 A

nnual Rep

ortinvestinG in opportunity

The mission of the Lowcountry Housing Trust is to build vibrant, sustainable communities by financing the production of affordable housing

and to act as a catalyst to meet the fundamental needs of underserved neighborhoods.

The 2011-2012 period has been a time of growth at the Lowcountry Housing Trust (LHT) - growth in our mission, our geographic outreach, our lending portfolio, our assets, and our staff.

Since our inception, we have focused on the production of affordable housing by approaching our mission in three ways: financing housing, providing technical expertise, and raising awareness of housing as a critical community issue. Over the past year, we have purposefully broadened our mission, seeking to create viable, sustainable communities by financing housing while supporting the fundamental needs of underserved neighborhoods. We now finance projects such as fresh food retail outlets, community facilities, and community businesses.

We have expanded our geographic focus. Where once we only served Berkeley, Charleston, and Dorchester counties, we began serving Georgetown County in 2010 and in 2012 further expanded to serve the City of Beaufort and the Town of Port Royal. Other counties have sought our expertise and we see a day soon when we may well serve all 10 coastal communities of SC.

We seek to leverage our loan capital by bringing other investors to the table. This has been particularly critical as the economy has tightened and banks have been less willing to fund new projects - a trend that is especially detrimental to multi-family rental projects which require tremendous capitalization.

We are committed to financing the development of low income housing tax credit projects throughout the state by participating in both construction and permanent LIHTC loans. We anticipate closing our first permanent LIHTC participation loans with CICCAR (Community Investment Corporation of the Carolinas) in the summer and fall of 2012 for projects in Bennettsville, Columbia, Myrtle Beach, and Rock Hill.

We have expanded our staff to gain expertise to support a more varied portfolio of investments and broader geographic service area. Joining our team this year are Suzanne Lynch as our finance director, Debby Waid as our program director, Shirley Wilkins as our program manager in Beaufort, and Debra Crawford as our executive assistant.

Moving forward, we have commissioned a consultant to conduct a market study, an organizational assessment, and additional research to assist us in developing a comprehensive business plan to guide our organization’s growth through the next five years.

Without the support and vision of our donors and investors, we would not have achieved these advancements. With your help, we will continue to serve as a catalyst to meet the fundamental needs of people and their communities throughout the Lowcountry and the state. Join us as we build vibrant, sustainable communities, one loan at a time.

Tony Woody Michelle Mapp Chair Executive Director

Dear Friends,

investinG in our Future

LendinG © Set an organization record in May 2012 by approving $1.2 million in affordable housing loans to support 6 new development projects

© Provided $498,332 in down payment and closing cost loans to 12 homebuyers through the Homebuyer Assistance Program, enabling $2,068,700 in home purchases

CapaCity BuiLdinG © Received a $1.5 million Financial Assistance award and a $.5 million Healthy Food Financing Initiative award from the U.S. Treasury CDFI Fund

© Received a $392,000 Equity Equivalent Investment (EQ2) from the U.S. Treasury Small Business Loan Fund and EQ2s in the amount of $250,000 from Wells Fargo and $100,000 from Heritage Trust Federal Credit Union

© Received $350,000 in Program Related Investments

© Awarded $345,500 in grants from local governments and regional foundations

© Awarded $34,500 in grants from Create Jobs for USA

© Finalized contracts to expand service area to include the City of Beaufort and the Town of Port Royal

© Expanded staff by hiring finance director, program director, program manager (Beaufort), and executive assistant

Leadership © Hosted an Affordable Housing Workshop in collaboration with the Federal Home Bank of Atlanta and SC Housing

© Executive director, Michelle Mapp, elected as the Public Policy Chair for the Affordable Housing Coalition of South Carolina and selected as a finalist in the Executive category for the Charleston Regional Business Journal’s 2012 Influential Women in Business award

© Selected as a runner up in the Citi “What’s Your Impact” national CDFI video contest at the 2011 Opportunity Finance Network annual conference

a year in review 2011-2012

BuiLdinG viBrant sustainaBLe CoMMunities 3

investinG in our eConoMy

FinanCinG aFFordaBLe housinG deveLopMent

“Traditional lending is not an option in today’s market. With the Lowcountry Housing Trust’s flexible financing and low interest rates, we were able to begin construction on this six-unit affordable project, increasing affordable housing opportunities and creating 10 jobs for neighborhood residents.”

– Chuck Mincey, Partner, BCD Affordable Housing, LLC

LHT provided a $250,000 loan to BCD Affordable Housing, LLC to purchase and rehabilitate a 6-unit apartment complex in downtown Charleston. The project will provide rental opportunities in an area with limited workforce housing.

A Catalyst for Economic Development“Access to quality workforce housing is a major challenge facing our region. Development of affordable housing products is difficult at best, and impossible without both advocacy and funding. The Lowcountry Housing Trust plays a unique and strong leadership role on both these fronts.”

– Matt Sloan, President, Daniel Island Company

The Lowcountry Housing Trust is a community development lender that provides innovative, flexible financing for the production, rehabilitation and acquisition of affordable housing. LHT offers technical assistance and loans up to $500,000 for the development of homeownership and rental housing units available to the local workforce.

The economic impact of our lending activities on the local community for 2011-2012 includes:

© $2.1 million in financing to developers

© $24.4 million in community development projects

© 671 jobs created or retained

© 518 individuals and families housed

© 207 housing units developed


investinG in our heaLth

FinanCinG heaLthy Food outLets

“Within three days of first opening our doors, my 12 employees and I served over 1,100 people. The response was unbelievable and we are thrilled to have sold through the majority of our initial inventory. Without the loan from LHT, none of this would have been possible.”

– Campbell Thorpe, Owner, Lowcountry Produce Market and Café

Lowcountry Produce’s expansion from an on-line, farm stand retailer to a commercial center was made possible through funding from LHT. What was once an historic storefront in downtown Beaufort has been renovated into a fresh food retail outlet. $110,000 in financing was utilized for machinery, equipment and working capital.

A Catalyst for Community TransformationRecognizing that among the challenges facing many South Carolina communities is access to fresh, healthy food, LHT is now investing in underserved communities by providing financing to grocery retailers and distributors. In turn, communities will benefit from the economic development opportunities that arise from a local grocery store, farmer’s market, or food hub.

In 2011, LHT was one of twelve organizations nationally to receive a Healthy Food Financing Initiative award from the U.S. Treasury CDFI Fund. The purpose of this $500,000 capital award is to increase access to healthy food options and attract investment in underserved communities by providing critical loan financing to fresh food retailers.

LHT is capitalizing a SC Healthy Food Financing Fund to provide predevelopment, acquisition, construction, rehabilitation, equipment, and leasehold improvement loans to supermarket operators and developers located in underserved communities across the state.

Before

After


investinG inour CoMMunities

A Catalyst for Community Asset BuildingLHT now finances a broad range of community development projects in low-wealth neighborhoods, signaling an expansion from focusing exclusively on affordable housing production to improving quality of life and investing in the neighborhoods in which the housing is built.

Vibrant, sustainable communities include more than stable housing; they include community facilities that meet the needs of residents. From transitional housing and child care facilities, to health care and community centers, LHT’s lending is helping to transform underserved neighborhoods by attracting critical capital investments that support the development of brick and mortar community assets.

FinanCinG CoMMunity FaCiLities

Crisis Ministries’ Veterans Transitional Dorm“A $250,000 loan from the Lowcountry Housing Trust helped us leverage funding that now totals over $5.4 million for Charleston’s new homeless shelter and soup kitchen. LHT staff provided assistance to Crisis Ministries through every step of the lending process. “

– Stacey W. Denaux, CEO, Crisis Ministries

LHT provided Crisis Ministries a development loan in the amount of $250,000 for its Veterans’ dorm, a 40-bed transitional housing facility for homeless male Veterans. The program is part of Crisis Ministries’ new Charleston Homeless Shelter, and the anticipated completion date for the shelter is fall of 2013.


investinG inour prosperity

A Catalyst for Job CreationLike other small business owners, affordable housing developers are finding it increasingly difficult to access lines of credit and financing to support their day to day operations. However, most small business loan programs do not lend to affordable housing developers. In an effort to fill this financing gap, LHT provides community business loans to serve this market.

Affordable housing development lending will remain a priority. In addition, LHT has expanded its loan programs to provide capital reserves to community businesses, bridge financing for organizations awaiting committed developer fees and grant payments, and up front working capital related to reimbursable state and federal programs.

Stop by your local Starbucks or visit www.CreateJobsforUSA.org to learn how you can help LHT create jobs right here in the Lowcountry.

“As a small business in an uncertain economic environment, we face tough decisions every day. After listening intently to our goals and reviewing our strategic plan, Lowcountry Housing Trust provided us with capital at a crucial time in our expansion. These funds have allowed us to focus upon growth opportunities and enhanced our ability to take advantage of new business.“

– Tracy Doran, President, Humanities Foundation

LHT provided the Humanities Foundation a working capital loan in the amount of $250,000 to ensure the ongoing production of affordable housing throughout South Carolina. Funding will be used as pre-development capital, overhead related to projects, and to meet liquidity requirements set by financial institutions.

FinanCinG CoMMunity Business


FINANCIALS

A snapshot of LHT’s financial health as of 12/31/2011: 1. Financially sound

a. Net asset ratio, a measure of equity to total assets, was 39%

b. Leverage is low as shown by debt/equity ratio of 48% c. 18 months of operating cash on hand

2. Solid loan portfolio a. Only experienced one write-off historically b. No past dues as of 12/31/2011 c. Loan loss reserve ratio of 5% is sufficient to cover any

future potential losses 3. Available funds

1. Capital available for lending was $5,500,000 as of 12/31/2011

2. Funding from the US Treasury for healthy food and community business financing

Elliott Davis, LLC audited the financial statements for the fiscal year ending December 31, 2011 in accordance with generally accepted accounting principles and expressed an unqualified opinion. The audit was approved by the Board of Directors and is available upon request by emailing [email protected].

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

2008 2009 2010 2011 YTD 2012

Capitalization Growth 2008-2012

01234567

2008 2009 2010 2011 2012

Total Employees 2008-2012

94%

3% 3% Operational Efficiency 2011

Program Services Management and General Fundraising

A snapshot of LHT’s financial health as of 12/31/2011:

1. Financially sound

a. Net asset ratio, a measure of equity to total assets, was 39%

b. Leverage is low as shown by debt/equity ratio of 48%

c. 18 months of operating cash on hand

2. Solid loan portfolio

a. Only experienced one write-off in its history

b. No past dues as of 12/31/2011

c. Loan loss reserve ratio of 5% is sufficient to cover any future potential losses

3. Available funds

a. Capital available for lending was $5,500,000 as of 12/31/2011

b. Funding from the US Treasury for healthy food and community business financing

Elliott Davis, LLC audited the financial statements for the fiscal year ending December 31, 2011 in accordance with generally accepted accounting principles and expressed an unqualified opinion. The audit was approved by the Board of Directors and is available upon request by emailing [email protected].

FinanCiaLs

STATEMENT OF FINANCIAL POSITIONAs of December 31, 2011 (with compari8ve totals for 2010)

ASSETS 2011 2010CURRENT ASSETS

Cash and cash equivalents 4,305,335 2,079,047 Accounts receivable 19,808 -‐ Promises to give, current porCon 100,000 25,925 Other current assets 4,308 4,437 Loans receivable, current porCon 382,975 453,557

Total current assets 4,812,426 2,562,966

NON-‐CURRENT ASSETSProperty and equipment, net 23,926 23,369 Promise to give, net of current porCon 49,020 -‐ Loans receivable, net of allowance for loan loss and current porCon 734,960 432,412

Total non-‐current assets 807,906 455,781 Total assets 5,620,332 3,018,747

LIABILITIESCURRENT LIABILITIES

Accounts payable 5,341 60,208 Accrued expenses 15,142 -‐ Deferred revenue 2,263,642 -‐ Refundable advances 79,236 -‐

Total current liabiliIes 2,363,361 60,208

OTHER LIABILITIESOther liabiliCes -‐ program related investments 475,000 250,000 Other liabiliCes -‐ equity equivalent investments 592,000 200,000

Total other liabiliIes 1,067,000 450,000 Total liabiliIes 3,430,361 510,208

NET ASSETSUnrestricted

Undesignated 1,464,170 1,408,121 Board designated 527,200 362,918

Temporarily restricted 198,601 737,500 Total net assets 2,189,971 2,508,539 Total liabiliIes and net assets 5,620,332 3,018,747

12

stateMent oF FinanCiaL position

STATEMENT OF FINANCIAL POSITIONAs of December 31, 2011 (with compari8ve totals for 2010)

ASSETS 2011 2010CURRENT ASSETS

Cash and cash equivalents 4,305,335 2,079,047 Accounts receivable 19,808 -‐ Promises to give, current porCon 100,000 25,925 Other current assets 4,308 4,437 Loans receivable, current porCon 382,975 453,557

Total current assets 4,812,426 2,562,966

NON-‐CURRENT ASSETSProperty and equipment, net 23,926 23,369 Promise to give, net of current porCon 49,020 -‐ Loans receivable, net of allowance for loan loss and current porCon 734,960 432,412

Total non-‐current assets 807,906 455,781 Total assets 5,620,332 3,018,747

LIABILITIESCURRENT LIABILITIES

Accounts payable 5,341 60,208 Accrued expenses 15,142 -‐ Deferred revenue 2,263,642 -‐ Refundable advances 79,236 -‐

Total current liabiliIes 2,363,361 60,208

OTHER LIABILITIESOther liabiliCes -‐ program related investments 475,000 250,000 Other liabiliCes -‐ equity equivalent investments 592,000 200,000

Total other liabiliIes 1,067,000 450,000 Total liabiliIes 3,430,361 510,208

NET ASSETSUnrestricted

Undesignated 1,464,170 1,408,121 Board designated 527,200 362,918

Temporarily restricted 198,601 737,500 Total net assets 2,189,971 2,508,539 Total liabiliIes and net assets 5,620,332 3,018,747


Program Related Investing: Earning a Financial and Social Return on Your Investment

Program Related Investing (PRI) is a growing tool that foundations, financial institutions, and philanthropists are using to employ their capital for the greatest social impact. A loan from you ($25,000 minimum) or your organization ($100,000 minimum) to the Lowcountry Housing Trust offers more than a financial return (quarterly interest payments, a 33% state tax credit, and principal repayment); your loan is put to work improving the communities in which we live, work, and play.

For more information on investing with LHT, please visit www.lowcountryhousingtrust.org.

“Our program-related investment in Lowcountry Housing Trust helps strengthen an important organization, increase its impact, and leverage new investments. We hope Babcock’s PRI will lend credibility to the CDFI industry in South Carolina and attract investments from banks, foundations and other partners.”

– Lavastian Glenn, Program Officer, Mary Reynolds Babcock Foundation

MaKinG an investMent in Lht

“We are pleased to support the Lowcountry Housing Trust. Wells Fargo is known as America’s community bank and we’re responsible for being leaders to promote the long-term economic prosperity and quality of life for everyone in our communities. If our communities prosper, we all prosper.”

– Len Hutchison, Senior VP, Wells Fargo

“LHT’s sound business model and market-specific expertise in pursuing its mission to finance community development provides the reassurance that my investment is making a positive impact on the local level.”

– Anita Zucker, Individual Investor President, The InterTech Group

14

2011-2012 Community Development Lending: Our Collective Capital at Work in Our Community

BCD Affordable Homes, LLCAffordable Housing Development Loan Loan amount: $250,000 Location: Charleston

Greenville Housing FundAffordable Housing Development Loan Loan amount: $200,000 Location: Greenville

City Hall Partners, LLCHealthy Food Retail Loan Loan amount: $110,000 Location: Beaufort

Humanities FoundationCommunity Business Loan Loan amount: $250,000 Location: Charleston

East Cooper Habitat for HumanityAffordable Housing Subsidy Amount: $5,000 Location: Mt. Pleasant

Neighborhood Stabilization Program (NSP)Affordable Housing Development Loans Loan amount: $224,433 Location: Charleston and North Charleston

Homebuyer AssistanceThe Davis FamilyLoan amount: $20,000 Location: North Charleston

The Deas FamilyLoan amount: $20,000 Location: Charleston

The Green FamilyLoan amount: $20,000 Location: Charleston

The Myers FamilyLoan amount: $20,000 Location: Charleston

The White FamilyLoan amount: $20,000 Location: Charleston

is MaKinG an investMent in our CoMMunity


THANK YOU TO OUR 2011-2012 PARTNERS

Support LHT

Your tax-deductible GIFTS and INVESTMENTS make a difference. From the first time homebuyer, to the child whose life is improved by having a home, to the senior citizen who has a safe place to live, your support helps to transform lives and build strong communities.

To learn more about how you can give to LHT, visit our website at www.lowcountryhousingtrust.org.

All contributions and investments to LHT qualify for the S.C. Community Development Tax Credit, a 33% state tax credit.

INVESTORSAnita ZuckerArchitectural AssociatesFrances P. Bunnelle FoundationHeritage Trust Federal Credit UnionMary Reynolds Babcock FoundationRobert JohnstonU.S. Treasury (SBLF)Wells Fargo

BUSINESSESOpportunity Finance NetworkTrinity Systems Engineering

FINANCIAL INSTITUTIONSBB&TSCBTSunTrust BankWells Fargo

FOUNDATIONSBakker Family FundFrances P. Bunnelle FoundationJoanna FoundationMary Reynolds Babcock FoundationYaschik Foundation

GOVERNMENTCharleston CountyCity of BeaufortCity of CharlestonCity of N. CharlestonSC State Housing Finance and Development AuthorityGeorgetown CountyTown of Port RoyalU.S. Treasury CDFI Fund

DONORSKaren AbramsAmy BakerTom and Julie BakerMeg CalnonMichael Chase Tammy HazeresPeggy HuchetPatrick KingMichelle MappRobert NettlesRon OwensFlorence PetersWhitney PowersKelly PriceJoy SimpsonMatt SloanHarry SmithSarah SmithBill Stanfield

DONORS (CONTINUED)Diana SzokeDebby WaidHenrietta WoodwardTony Woody

2012 RACE JUDICATA SPONSORSCarlock, Copeland, & StairCharleston County Bar AssociationCharleston School of LawCompanion AssociatesEdward WestbrookFleet LandingHeritage Trust Federal Credit UnionJ & J Management ServicesKaren AbramsMcNair Law FirmStudio AThomas and Hutton

16

STAFFMichelle Mapp Executive DirectorPatrick King Assistant DirectorSuzanne Lynch Finance DirectorDebby Waid Program DirectorKaren Hauck Communications DirectorAlice Williams Accounting ManagerShirley Wilkins Program Manager, BeaufortDebra Crawford Executive Assistant

LOAN REVIEW COMMITTEEChairPeggy Huchet New Jersey Housing Trust Fund (retired)

Thomas Anderson South Carolina Bank and TrustRuss Gantt TD Bank, N.A.Brian Hellman Brian A. Hellman, P.A.Ashley Heggie GreystarEdward McKelvey First Federal of CharlestonGeorge Morrison McNair Law FirmMatt Sloan Daniel Island CompanyMichael Wooddy Raven Cliff CompanySteve Wichmann Heritage Trust Federal Credit Union

BOARD OF DIRECTORSChair Tony Woody Thomas and HuttonVice Chair Karen Abrams Keller Williams RealtyTreasurer Ron Owens Evening Post Publishing Co.Secretary Peggy Huchet New Jersey State Housing Trust Fund (retired)

Tom Baker Architectural Associates, LLCBenjamin Bryson Charleston Realty AdvisorsMeg Calnon Bank of AmericaMichael Chase Wells Fargo AdvisorsPhillip Ford Charleston Trident Home Builders AssociationJackie Heyward Town of HollywoodRodly Millet Hill-Rom Services, Inc.Robert Nettles Howell Linkous & Nettles, LLCFlorence Peters City of CharlestonWhitney Powers Studio A, Inc.Kelly Price ICF InternationalMatt Sloan Daniel Island CompanySarah Smith Waccamaw Council of GovernmentsBill Stanfield MetanoiaDiane Szoke RelocalitySteve Wichmann Heritage Trust Federal Credit UnionHenrietta Woodward Lowcountry Housing and Economic Development FoundationWendy Zara Wells Fargo Advisors


Lowcountry Housing Trust1535 Hobby Street Suite 209

North Charleston, SC 29405

843-973-7285 www.lowcountryhousingtrust.org

2011 - 2012 Lowcountry Housing Trust Annual Report

Documents

financing housing

awareness of housing

sustainable communities

new projects

community facilities

community businesses

opportunitythe mission

time of growth