A look back at 2016
a letter from mlf president, jason battista
Dear Partners In Hope,
Many view 2016 as a particularly divisive year for Americans. An election, perhaps unprecedented in the vitriol of its rhetoric, seemed to split families, end friendships, and pit neighbor against neighbor.
While I understand why this past year has been marked by division, discord, and tension, the work of Mercy Loan Fund (MLF) and its partners gave and continues to give me hope for a common, bright future built in solidarity.
Why? Because the work of a Community Development Financial Institution (CDFI) like MLF is the work of community-building, and that work simply does not get done alone. Lending to socially responsible affordable housing developers and others committed to creating essential infrastructure projects requires a high level of collaboration, a lot of trust, and an intense unity of purpose.
This unity of purpose propelled MLF to new heights in 2016 and made it a remarkable, banner year for the organization. Our eight-person team accomplished an impressive array of feats:
- We averaged $50 million in loans outstanding, exceeding our goal of $45 million and setting a new MLF record.
- We closed 15 loans totaling more than $22 million.
- We received our first Capital Magnet Fund (CMF) award of $3 million.
- Our delinquency ratio and nonaccrual ratio were both 0%, relative to a 5% goal, indicating that our portfolio is the healthiest it has been since the ‘Great Recession.’
- We ended the year with $17 million in flexible capital ($7 million more than the previous year) from the Federal Home Loan Bank (FHLB) of Topeka, Deutsche Bank, and Capital One. This capital has already transformed our business by enhancing our approach to cash management and improving our liquidity and profitability.
- We produced more than $1.4 million in cash flow from operations, relative to our goal of $867,000. Our net asset ratio was 27%, the highest in our history, and our year-end self-sufficiency ratio was 130%, a new MLF record.
- We were one of the first CDFIs to pursue the Small Building Risk Share program through HUD, which will allow us to obtain funds from the Federal Financing Bank. We became a Federal Housing Authority (FHA) approved lender, the first step in the process; the final step is to be approved by HUD for this specific program.
- In response to our plea letter in honor of the Jubilee Year of Mercy, our very generous religious communities donated $434,000 in investment principal.
- We received an impressive two-notch upgrade (from A+ to AA) from a third-party rating agency. This upgrade will greatly increase our ability to raise capital.
- We reached a historic milestone of $2 billion leveraged in total development costs since MLF’s founding.
All of the above milestones are in service to the most important metric of all: how many people we help live to their full potential by means of affordable, decent housing. To date, we have provided 500 loans resulting in 24,090 affordable homes for 61,398 people.
I hope you now understand why MLF’s work has given me such faith in the power of unity and collaboration. We have not housed 61,398 people alone. We have relied on other organizations, our affiliates, and the communities in which we serve. We have worked with countless partners and have had innumerable conversations.
Despite the challenges that lie ahead, I remain optimistic about the future of our country’s communities, because every day I see how a unity of purpose can bring people together and transform neighborhoods and lives.
Mercy Loan Fund