Bank of America Community Development Banking said Monday it will invest up to $150 million in equity to preserve more than 3,000 affordable homes nationwide for middle-income households.
The bank made the announcement in partnership with Enterprise Community Partners, one of the nation’s largest affordable housing organizations.
BofA and Enterprise said the investment is intended to help working Americans who earn between 80% and 120% of area median income remain in housing they can afford. According to the Pew Research Center, nearly half (49%) of Americans said this was a major problem where they live, up 10 percentage points from early 2018.
“As rent costs outpace income growth, the continued lack of affordable housing inventory is forcing families to make difficult decisions on how and where they live,” said Maria Barry, national executive for Bank of America Community Development Banking. “This fund will focus on the ‘missing middle,’ which refers to middle-income individuals who make too much money to qualify for subsidized housing but make too little to afford market-rate housing in their community.”
According to Harvard University’s 2022 State of the Nation’s Housing report, home prices rose 20.6% from March 2021 to March 2022 and rents jumped 12%, showing that unaffordability worsened even further in the past two years.
Both Enterprise and Bank of America said they will leverage their national networks and resources to help accelerate the preservation of affordable housing.
“Preserving affordable housing for middle-income households is more critical today than ever as our country faces the worst housing shortage in generations,” said Lori Chatman, interim co-CEO of Enterprise Community Partners. “Through our work with Bank of America, we are able to fill a gap to creatively finance projects that will preserve the supply of affordable homes and build resilience and upward mobility for thousands of families.”
The fund builds on Bank of America and Enterprise’s more than 30-year partnership to create and preserve thousands of affordable homes. It will expand the partnership by investing critical equity capital to allow affordable housing providers to acquire existing properties that are at risk of being converted into unaffordable, market-rate homes and preserve their affordability for the long term, the organizations said.
Enterprise has 40 years of experience providing affordable housing solutions, capital, and community development. For 10 years, Enterprise has managed preservation equity funds, which have preserved more than 17,000 homes nationwide, valued at nearly $2 billion. Since 1982, Enterprise has invested $54 billion and created 873,000 homes across all 50 states.
