TORONTO, October 20, 2014 – RBC Global Asset Management (RBC GAM) today announced an agreement with Community Reinvestment Fund, USA (CRF) to purchase and service up to $50 million in loans to support affordable rental housing as part of the RBC Access Capital Community Investment Strategy.
The funds will support investment in affordable housing by purchasing multi-family rental loans originated by the Federal Housing Administration (FHA) and Housing Finance Agencies (HFA) under the FHA-HFAs Risk-Share loan program (Section 542c). This program provides state HFAs with a sustainable low-cost source of financing to support the development of affordable multifamily properties.
"We are pleased to enter into this agreement with CRF to provide greater access to affordable housing in communities across the country and offer investors additional impact investing options," said Ron Homer, co-founder of the Access Capital Community Investment Strategy and Managing Director for RBC GAM. "This investment has the potential to help reduce the cost of financing rental housing developments and expand the scope of HFA Risk-Sharing loans to low- and moderate-income families."
The investments are intended to supplement the recently proposed U.S. Treasury program to purchase Risk-Share loans and may help address funding gaps created by the fact that these types of loans are not eligible for Ginnie Mae securitization.
Investors will be able to participate in this initiative through the RBC Access Capital Community Investment Strategy, with the CRF providing qualifying and servicing support to RBC GAM and the HFA seller servicers.
"CRF is pleased to add RBC GAM to our family of investors," said Frank Altman, president and CEO of CRF. "The alliance with RBC GAM will allow us to deepen and expand our relationships with Risk Share Lenders, which we believe will positively affect the housing stock for working class and low-income families."
RBC GAM's impact investing solution, the Access Capital Community Investment Strategy, is a disciplined fixed income strategy supporting underserved communities targeted by its investors. The strategy has a 15-year track record with over $880 million in assets under management as of September 30, 2014.
"Impact investing has been gaining greater attention from investors who are looking for high-quality investment solutions with an impact element," added Catherine Banat, institutional portfolio manager, RBC GAM. "Through the Access Capital Community Investment Strategy, we work with clients to design a portfolio that supports impact-related investments while also earning a competitive financial return, as part of our double-bottom-line benefit."
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC), and includes institutional money managers BlueBay Asset Management and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to individual, high-net-worth and institutional investors through mutual funds, exchange-traded funds, hedge funds, pooled funds, separate accounts and specialty investment strategies. RBC GAM group of companies manage more than C$350 billion in assets and have approximately 1,200 employees located across Canada, the United States, Europe and Asia.
In the United States, RBC Wealth Management operates as a division of RBC Capital Markets, LLC. Founded in 1909, RBC Capital Markets, LLC. is a member of the New York Stock Exchange, the Financial Industry Regulatory Authority, the Securities Investor Protection Corporation, and other major securities exchanges. RBC Wealth Management has more than $278 billion of assets under administration and nearly 2,000 financial advisors operating in 200 locations in 42 states.
About Community Reinvestment Fund (CRF)
CRF, a national non-profit community development financial institution (CDFI), is a leader in bringing capital to underserved areas. Since 1988, CRF has injected more than $1.5 billion into low-income and economically disadvantaged communities around the country to provide affordable housing, help stimulate job creation and economic development, and support community facilities. For more information, visit www.crfusa.com.