In addition to the positive things than many banks are already doing the Coalition has come up with a list of suggested new ways that banks can "partner" with CDC sponsored ventures. This list includes:

• Banks Can Make Equity Investment in Small Infill Development Ventures
  
• Banks (or bank-owned CDCs) should find a way to make equity investments in real estate development ventures of community-based development corporations.
  

  At the present time it is not economically feasible for community based development corporations to utilize the Low Income Housing Tax Credit to help finance small (5 to 25 unit) multifamily development projects due to the high transaction costs that are involved. By agreeing to make equity investments in these types of projects banks could stimulate the production of an increased number of rental units.
  

  In addition, banks (or bank-owned CDCs) should make equity investments in commercial development projects that are sponsored by community based developers.
  

Banks Can Purchase 501(c)(3) Tax Exempt Bonds

• Banks, either directly or through a bank owned CDC, should consider becoming an investor in affordable housing projects that issue 501(c)(3) tax exempt bonds with a below market rates of return.
  

  By using these types of bonds qualified projects can avoid having to pay ad valorem real estate taxes. The savings could be used to pro- duce a return on investment for the investors in an otherwise unfeasible project. It is estimated that a $20 million investment could leverage $100 million on in project funds. Banks Can Make Available Low-Cost Predevelopment Money
  

Banks should make predevelopment loans available to projects sponsored by community based developers.

• These funds are needed to pay for predevelopment expenses such as architectural drawings, environmental tests, and land banking.
  

  Because banks generally have little experience in underwriting or administering these types of predevelopment loans they may which to make lines of credit available to qualified intermediary organizations. Such intermediary organizations would be able to administer the predevelopment loans without losing money. The experienced intermediary, for example, would know not to disburse the entire loan to the community-based developer at one time. Instead the funds would be disbursed on a step by step on an as needed basis.
  

  In order to lessen the risk of loss for the participating banks, the State of Florida's "Pre-Development Loan Fund" might be used to provide a loss guarantee for a portion of the bank's exposure (perhaps the top 20%). This would allow the bank money to be disbursed early in the predevelopment stage to pay for "due diligence" type of expenses, such as environmental testing, without the bank risking loss.
  

Banks Can Provide Grants to Nonprofits to Support Administrative Support of Infill Venture Development.

• The cost of doing development in declining low income neighborhoods is higher than doing development in the suburbs. Land assembly, for example, is much more expensive. Many of the vacant parcels are environmentally contaminated ("brownfields") or have inordinate amounts of liens ("lienfields"). The patchwork of ownership and the necessity of budgeting relocation costs make the assembly of large cost effective parcels extremely difficult. The most significant barrier, however, is the fact that the low income residents can only afford to pay low rents and low mortgage payments.
  

  These are the underlying reason for the almost total lack of investment in many of these communities. Thus, it is not realistic to look to "potential profits" as a source of funding to cover the administrative costs of nonprofit community based developers.
  

  The informal so called "public-private partnership" has provided some administrative funds in the past through CDBG, HOME, and foundation grants. The amount has never been sufficient to meet the need. Making matters worse, the availability of such funds has been declining over the past several years. Without this type of support there will always be a low volume of "bankable" deals flowing out of these neighborhoods
  

  In order to Banks should engage in a program of providing grants to community based developers to subsidize their operating expenses. The banks can make these grants directly or through one of the established intermediary organizations. The result of this increased capacity will be an increased flow of "bankable" real estate development venturers.
  

Using Bank Owned Foreclosed Property to Expand Affordable Housing

• Bank can facilitate acquisition of bank owned foreclosed property by nonprofit community based development corporations so as to expand the available amount of affordable housing.