The LA4LA Affordable Housing Fund (Fund) was established to accelerate the production and preservation of affordable housing across Los Angeles. Rooted in a commitment to resilience, accessibility, and long-term community stability, the Fund provides flexible financing to nonprofit and values-aligned for-profit developers committed to delivering affordable and interim housing aligned with LA4LA’s purpose and guiding principles.
One of the Fund’s first products is the Incremental Loan Guarantee Tool (Guarantee Tool), a first-of-its-kind precision financing tool developed by LA4LA, with input from dozens of lenders and experts.
The purpose of the Guarantee Tool is to ‘unstick’ entitled projects not moving to permitting and construction due to financing challenges. It is intended to support incremental permanent financing based on the “overhang”, or rent differential, between the Voucher Payment Standard (VPS) rent—or other form of rental subsidy—and the rent allowed for an affordable unit.
Thanks to Health Net’s $10 million dollar investment, the Guarantee Tool is now accepting applications for eligible projects. And through the generosity of the Wells Fargo Foundation we were able to complete the research and concepts to make this tool a reality.
The Guarantee Tool is applicable to both 100% affordable and mixed-income projects with substantial affordability within Los Angeles County. While there is no unit or size specific requirement, priority is given to larger projects to maximize impact. Other drivers of eligibility include:
Having a successful track record of delivering and operating 100% affordable and/or mixed income housing that includes covenanted affordable units.
Direct experience, or a partnership with a property manager or service provider with direct experience, leasing to and managing properties that include lower-income households and/or households with vouchers/rental subsidies.
The maximum guarantee provided will be determined by:
A maximum of 30% of the units in a project can assume voucher payment standard rents if the voucher rents come from a form of choice voucher.
If the rental subsidy is provided through an agreement with a public agency or other entity, the number of units guaranteed may match the number of units in the agreement.