"NAF brings a really holistic perspective, not just the ratio analysis. They understand the mission; it's not just a financial transaction, we're impacting people's lives."

Chad Schwitters, Executive Director at Urban Homeworks


Urban Homeworks is a nonprofit community developer that believes in the redemptive value of real estate. They use affordable housing as a tool to reknit the fabric of community. When the bottom fell out of the housing market, vacancies and foreclosures undermined community development efforts, creating new challenges for these neighborhoods and organizations. Urban Homeworks responded by working collaboratively with key partners and new allies, such as Nonprofits Assistance Fund.

Believing that owner-occupied homes are a building block of stable neighborhoods, Urban Homeworks launched an innovative pilot program, Project: Reclaim, with the City of Lakes Community Land Trust (CLCLT) and Lutheran Social Services (LSS). The program reclaimed hope in North Minneapolis by purchasing and improving homes, enhancing the financial understanding and credit of families, and helping them achieve sustainable and dignified homeownership. By the beginning of 2010, renovations on the first round of houses were complete. Families moved in and made payments towards purchasing their home under a very favorable contract for DEED. They also worked with financial counselors from LSS to improve their credit with the goal of being able to refinance under a traditional mortgage.

In order to purchase and renovate the homes, Project: Reclaim required an upfront infusion of capital. Chad Schwitters, Executive Director of Urban Homeworks, worked to identify sources of financing: "We recognized that access to credit could be a challenge for us, just like it is for our homebuyers. We wanted to get started right away, so we sought out financing early in the project." With a solid banking relationship, they are able to rely on University Bank for most of their credit needs. They also applied for federal, state, and city funding that was designed to address vacancies and foreclosures. Knowing it can take a long time for government agencies to disburse funds, Urban Homeworks also applied for a loan with Nonprofits Assistance Fund.

Nonprofit Assistance Fund believed in the importance of this project, and understood the business model that would make it work. Nonprofits Assistance Fund approved a working capital line of credit of $100,000, which finances work on two homes at a time. Urban Homeworks uses these funds for purchasing and other pre-development work. The benefit of this particular financial tool is its flexibility. Initially, Urban Homeworks appreciated the quick turnaround time that allowed them to fill a gap in their financing and launch Project: Reclaim. Now they appreciate the unparalleled level of flexibility of their line of credit. Most affordable housing financing is tied to specific sources and projects; credit from Nonprofits Assistance Fund is unique because organizations have discretion over how they use the funds.

Because of the flexible pre-development funding from Nonprofits Assistance Fund, Urban Homeworks had ample time to apply for long-term financing from a bank after purchasing a property. Once that is in place, the funds from Nonprofits Assistance Fund are available for work on the next project. As Kate Barr, Executive Director from Nonprofits Assistance Fund, commented, "It's exciting that our piece of the puzzle enables Urban Homeworks to leverage so much other funding, from federal stimulus dollars to traditional lenders to their own donors. By keeping our conditions flexible, we provide working capital that supports our clients in achieving their missions, which in turn helps build a stronger community for us all."

Chad elaborated on how easy it is to draw funds and work with Nonprofits Assistance Fund's staff: "Whenever we want to move the money to another project, we tell Michael and send him the new budget and construction plans." Michael added that Urban Homeworks shares regular financial statements and other relevant information, so he is confident in their financial position and ability to get the work done. Chad elaborated on this relationship: "Michael brings a really holistic perspective, not just the ratio analysis. He understands the mission; it's not just a financial transaction, we're impacting people's lives."