Nashville affordable housing developers get $75M boost from new fund

Mayor Freddie O'Connell and investment partners on Friday launched a $75 million fund combining public and private resources to address the affordable housing crisis in Nashville by offering fast and flexible loans to affordable housing developers.

The Community Foundation of Middle Tennessee and First Horizon Bank are the city's primary founding partners in the initiative. Leaders from those organization joined the mayor to officially launch the Nashville Catalyst Fund.

"We knew it was very important," O'Connell said Friday. "This was one of the key recommendations from the affordable housing task force report many years ago. ... I expect this year we will see the first project come out of this."

The fund has already received several inquiries from developers pursuing affordable housing projects, and fund partners said 3,000 units could be created with help from the fund over the next decade.

Of the initial $75 million fund, $20 million came from the Metro Nashville government, $50 million came from a credit facility led by First Horizon and $5 million came from Vanderbilt University. The Community Foundation is leading an additional fundraising effort to add $25 million to the program.

The city's investment came from American Rescue Plan Act funds.

The fund will work by providing flexible loans to developers looking to build or preserve workforce or attainable housing in Nashville. These will include property acquisition loans, pre-development loans and bridge financing. Projects will likely also combine federal tax credits, payment in lieu of taxes or other incentive programs in addition to the loans from the Catalyst Fund.

The fund will be managed by Forsyth Street Asset Management in collaboration with the Community Foundation of Middle Tennessee, Pillars Development and Nelson Community Partners. An investment committee, led by former AllianceBernstein executive and mayoral candidate Jim Gingrich, will serve as the governing body for the lending decisions of the fund.

"This represents an all-in, all hands on deck moment for these three sectors of our city in a new way that has never happened before," said Hal Cato, CEO of the Community Foundation. "For that reason, Community Foundation of Middle Tennessee is really proud to take this important step in partnering with Metro Nashville and our friends at First Horizon to create this new resource to help move this community forward in a new way."

Learn more about the Catalyst Fund at www.nashvillecatalyst.org .

This article originally appeared on Nashville Tennessean: Nashville affordable housing developers get $75M boost from new fund