Press Release

Please Embargo until: February 10, 2005, 11:00 AM
Contact:  Jeff Wells, Lenders for Community Development
(408) 297-0204 x20

Innovative Loan to The National Hispanic University is the First New Markets Tax Credits Loan in the Bay Area

San Jose, CA — At a celebration held today, with investors, Lenders for Community Development (LCD), a leading community development financial institution in San Jose, California announced that it has made a $9.6 million loan to The National Hispanic University (NHU).  

The loan provides permanent financing for Sobrato Hall, NHU’s new 65,000-square-foot state of the art learning center that is the centerpiece of the university's new campus on Story Road in East San Jose.  LCD made the loan using capital generated from its allocation of New Markets Tax Credits (NMTC), a $15 billion federal program created by Congress in 2002. The NMTC program is designed to encourage private capital investment in low-income communities. Loan capital is being provided by a group of private and non-profit investors that include Greater Bay Bancorp, Silicon Valley Bank, Heritage Bank of Commerce, Comerica Bank, the Low Income Investment Fund, and the Northern California Community Loan Fund.

LCD has received an allocation of credits under the NMTC program and The NHU loan is the very first loan created under this program in the San Francisco Bay Area. LCD structured this loan to provide NHU with a below-market interest rate and with the potential for a large grant after the loan repayment.

“Lenders for Community Development is proud to show how New Markets Tax Credits can be used to benefit the San Jose community with this innovative loan,” said Eric Weaver, Executive Director of LCD, “ An investment in education is indeed a noble and worthy endeavor, particularly when it involves such an outstanding institution as The National Hispanic University.” 

Prior to the opening of the new campus facility, NHU was housed in a former elementary school built in 1958. In the late 1990s, as a result of a strategic planning effort, The NHU Board of Trustees launched a capital campaign to build the new campus facility.  NHU raised $10 million by 2002 and approached LCD for a loan to begin construction of the new facility. In 2003, LCD and Comerica Bank made construction loans totaling $11.3 million to NHU.  NHU demolished more than 40% of their old campus to make room for Sobrato Hall. Construction of the new learning facility was completed in July 2004.

“Lenders for Community Development and our other partners in this effort have helped lay the foundation to take The National Hispanic University to the next level,” stated Ed Alvarez, Chairman of the NHU Board of Trustees, “Everyone associated with NHU takes pride in knowing that this very special institution will continue to provide accessible and affordable quality education for many generations to come.”

Equity investors, Silicon Valley Bank and Greater Bay Bancorp provided 30% of the loan capital and will receive all of the New Markets tax credits allocated to this project. Debt investors, including Heritage Bank of Commerce, Comerica Bank, the Low-Income Investment Fund and the Northern California Community Loan Fund, provided 70% of the loan capital and will receive a stream of interest payments over seven years.  At the end of the loan term, LCD will grant NHU a portion of the remaining equity to build the university’s endowment.

LCD’s New Markets Tax Credits allocation enables LCD to raise and deploy up to $25 million in capital for high impact projects in the San Francisco Bay Area. LCD will use its remaining allocation to make long-term loans to support non-profit and for-profit real estate projects providing high community impact in low-income areas of Santa Clara County, San Mateo County, and Alameda County. “LCD looks forward to investing these resources in projects that will strengthen the Bay Area’s low-income communities,” said Jeff Wells, Manager of LCD’s New Markets Tax Credit Program. 

About Lenders for Community Development

Lenders for Community Development is a nonprofit community development financial institution that provides financial tools and training to low-income individuals, families, and communities, helping them to move beyond poverty and toward self-sufficiency. LCD channels resources into Silicon Valley communities that have been underserved by conventional financial institutions, and gives their residents the tools they need to transform their own lives.  LCD’s comprehensive approach includes the Assets for All Alliance IDA Program, a Small Business Loan Program, Affordable Housing and Community Facilities Loan Program, and the New Markets Tax Credit Program. Through these programs, LCD has directed over $54 million in community investment into economically challenged neighborhoods and has improved the lives of more than 4,500 households. More information on Lenders for Community Development and its award-winning programs can be found at www.L4CD.com or by calling 408-297-0204 x35.

About The National Hispanic University

The National Hispanic University was founded in 1981 as a model university for providing accessible and affordable quality education opportunities for Hispanics and other economically marginalized, underserved and underutilized students.

Today NHU, a WASC accredited university, graduates students who are trained, capable, and ready for national leadership in a variety of fields including education, business and technology. The NHU offers degree programs in business, liberal studies, computer information systems and a credential program for elementary teachers.

The NHU has created an educational environment where learning and the needs of the learner, lie at the center and are the core purpose of the institution.  Education at NHU is personalized with high expectations, support systems and role models in place to help students meet those expectations. NHU is constantly exploring and developing curriculum where faculty and students can integrate the content of their courses with the needs and the concerns of the community.  The NHU incorporates a multicultural approach to education and learning in an environment that respects and appreciates diversity.

 NHU has the distinction of credentialing more teachers who are bilingual than any university in Northern California and provides the lowest tuition of any private university in the country. For more information visit our Website at www.nhu.edu or call 408-254-6900.