The Dunham Fund signed an agreement with Joseph Corporation for an interest-free, five-year Program Related Investment (PRI) of one million dollars to create the Dunham Fund Home Rehab and Refill Program, a revolving loan fund to purchase, rehab and resell ten to fifteen unoccupied and distressed homes a year on the near east side of Aurora. This area has been identified as a Neighborhood Revitalization Strategy Area (NRSA) by the City of Aurora and is focused in the Brady Elementary School enrollment boundaries.
This neighborhood has a high concentration of rental property which has resulted in increased student mobility at Brady School. The lack of homeownership has been a contributing factor to less investment in the housing stock of the neighborhood. The goal of the Dunham Fund is to improve the housing stock by re-establishing homeownership opportunities at affordable prices, and reduce the mobility of students at Brady School with the anticipation of improved academic achievement when students feel stability in their home and school environment.
“We hope that this program related investment is the first of many in our service area,” says Dunham Fund Board Chair, Stewart Beach. “Like grants, foundations use PRIs to support their charitable mission. Unlike grants, PRIs take the form of investments, usually requiring the return of capital within an established time frame. The Joseph Corporation is required to repay the Fund’s loan within five years.”
“Our investment in this program will provide leverage to the Joseph Corporation as they seek additional funding from other sources”, says Bob Vaughan, the Fund’s Executive Director. “When JoCo repays the loan, the Dunham Fund’s advisors will reinvest the proceeds in other program related investments which fulfill the Fund’s charitable objectives.”
“Joseph Corporation will purchase houses in the NRSA at a cost between $20,000 and $40,000, and rehab and resell them for up to $80,000 to qualified purchasers at reasonable mortgage loan rates. JoCo will provide the administration of the program and will rehab the homes using licensed professionals for five year sustainability, which includes the mandatory sustainable items of roofing, HVAC, plumbing, electrical and gutters. A provision in the loan agreement also calls for the employment of contractors located in the Dunham Fund service area where feasible, thus addressing the declining home building and renovation market impacted by the recession in the Aurora area,” said Dennis Wiggins, Executive Director of the Joseph Corporation. The JoCo program will also provide pre-purchase and financial literacy training to potential homeowners. The revolving loan fund will be replenished upon sale of the home.
The Rehab and Refill Program ideally matches the community development objectives of the Dunham Fund with JoCo’s goal to ultimately revitalize and beautify the declining neighborhoods in the NRSA.” said Mr. Wiggins. “The program will eliminate as many as half of the vacant housing units in the area and increase the home ownership rate by providing the opportunity for home ownership to more than one hundred low-income families over the next five years. Statistics have proven that homeownership stabilizes a declining neighborhood where there are vacant properties and many more renters than homeowners. Homeowners move four times less than renters and their children remain in the same schools longer and are more likely to graduate. People take pride in home ownership and maintain their homes much better than renters.”
Joseph Corporation will also collaborate with Quad County Urban League’s “Youth Build Program” for labor and improvement of the aesthetic qualities of the rehabbed home, Fox Valley Habitat for Humanity for hands-on rehab training, labor, and discounted building supplies, and Bryan House, CDC, for down payment assistance and home ownership counseling to prospective home buyers in the NRSA.
For specific information about Dunham Fund Program Related Investments, organizations may contact the Dunham Fund Executive Director at 630.844.2774 or at rvaughan@dunhamfund.org.
