$2.75 Million Awardee
By just about anyone’s standards, the Federation of Appalachian Housing Enterprises (FAHE) could have been considered a highly successful CDFI back in 2004. Founded in 1980 to reduce systemic poverty in Central Appalachia by improving housing and creating economic opportunity, FAHE had established itself as an innovative mortgage lender as well as the leader of a member-based network of more than 40 community agencies dedicated to providing housing solutions to families throughout the region.
The only problem was, as successful as FAHE had become, it wasn’t successful enough. “We looked seriously at the number of people who weren’t well-housed in the region—100,000 households living in substandard housing, another 700,000 in cost-burdened housing. The need was enormous,” says Jim King, FAHE’s CEO. “We were delivering about 2,000 affordable housing units per year and deploying about five million dollars in direct financing. The bottom line was, we had little solutions to very big problems.”
King decided that FAHE’s solutions would have to become bigger, and his first step was to set new goals—bold ones. He resolved that the FAHE membership would quadruple its performance, increasing its production from 2,000 housing units annually to 8,000 in 2015. To accomplish that, it would need to deploy significantly more capital, so other new goals followed: $30 million deployed in 2007, $50 million in 2010, and $104 million in 2012—ambitious targets for an organization that had been on a trajectory to deploy $10 million by 2012.
The next step was to transform the organization’s products and services. Over the next two years, FAHE retooled two of its traditional lines of business, its mortgage program and its commercial lending program for nonprofits, and launched two more, a consulting service for community-based organizations and local governments, and an innovative equity fund to use the Low Income Housing Tax Credit Program in Central Appalachia, enabling deals to happen, even in a down economy.
It is already becoming clear that King has not overestimated FAHE’s capabilities. The organization provided $41 million in direct financing last year. Its members also produced 3,800 housing units last year, which means that the organization is already almost halfway to achieving its 2015 target. With the additional capital from the Wachovia NEXT Award, which FAHE will use to build its tax credit fund, King believes that FAHE’s goals are well within reach.
The key to FAHE’s success, King maintains, has been its boldness. “We work in a region where you have to have a can-do attitude and be really, really persistent,” he says. “We’ve got a real mission that we can believe in, and we decided that, rather than to sort of bunt, we would swing all the way, and it seems to have worked for us.”