SOCIAL TOPICS (Archive): COMMUNITY DEVELOPMENT INVESTING

Published, November 1999

       Overwhelming, even desperate. That’s how the leaders of the Federation of Appalachian Housing Enterprises (FAHE) describe the financial straits of many residents of Appalachia.

       Overwhelming, perhaps, but not ignored. A new investment opportunity in Walden’s Community Investment Service, FAHE is a coalition of 29 community-based nonprofit organizations serving 80 rural Appalachian counties within Kentucky, Tennessee, Virginia, and West Virginia. Since 1980, FAHE has offered all-inclusive services to low- and very low-income families. These include low interest mortgages, construction training and technical assistance, short-term construction loans, pre- and post-home ownership counseling, and advocacy for nonprofit housing programs to provide affordable housing for residents of Appalachia. In addition to new home and rental unit financing, FAHE has provided significant loans for rehabilitation and weatherization of existing housing and businesses.

       One need not look far to discover the critical role FAHE plays in the communities it serves. In Kentucky the median per capita income is $29,810: the average income of a FAHE homeowner/borrower is $10,605. In Virginia, loan fund participants earn less than 40 percent of median income in the state.

       Walden’s clients are currently participating in FAHE’s Construction Loan Fund, which was created in 1981 to provide short-term, low interest loans to FAHE’s member organizations. These loans provide capital to reduce housing construction costs, thus making housing more affordable. Member groups have developed new, diverse projects which have received over $6 million in loans from the Construction Fund. Examples of financing recipients include: Tekoa Group Home, which provides alternative housing for teenage youths who have difficulty functioning in their homes; Duplexes, a project currently constructing affordable rental housing for low-income families; Transitional Housing Program, a project that created transitional housing for victims of domestic violence, physically disabled individuals and others who would be homeless otherwise.

       In 1995, to further accommodate the housing and financial needs of the Appalachian population, FAHE, the Central Appalachian Peoples Federal Credit Union, and another regional community loan fund created Appalbanc. With current assets of $21 million, Appalbanc provides affordable rental and home ownership financing to low income Appalachian residents. Additional services to local residents include access to consumer credit as well as loans to small businesses.

       In each state within the FAHE network, individuals representing local member groups are elected to a FAHE State Caucus. Representatives work with their respective state legislatures to bring low-income housing and community development to a public forum where statewide programs can be enacted. In response to FAHE’s efforts, the Kentucky Legislature created the Kentucky Affordable Housing Trust Fund and West Virginia formed the West Virginia Housing Policy Advisory Council. With combined assets now at $73 million, FAHE is definitely growing in its capacity for providing housing, business opportunities, and employment for residents of Appalachia.

Walden clients have invested $5.1 million in community development banks and loan funds. Our sincere appreciation to all who are participating in our Community Development Investment Service.