Using Credit Enhancements to Leverage Existing CDFI Capacity: Indianapolis EcoHouse Project Loan Program

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Policy Brief

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As part of the American Recovery and Reinvestment Act (ARRA), Indianapolis received a $10 million grant through the Department of Energy’s Better Buildings Neighborhood Program initiative. The City of Indianapolis Office of Sustainability partnered with the Indianapolis Neighborhood Housing Partnership (INHP), a community development financial institution (CDFI) focused on affordable housing, to design a financing program for low and middle income Indianapolis homeowners. Launched in June 2011, the $6 million EcoHouse Project Loan Program is available to Indianapolis households earning up to 120 percent of Area Median Income (AMI).

Unsecured loans are available for up to $4,000 and four years, and secured loans are available for up to $15,000 and 10 years. According to INHP, eligible homeowners typically have little access to anything but credit card financing – often at rates from 15-25 percent, so the EcoHouse Project’s mid-single digit fixed interest rate loans are an attractive tool for enabling energy improvements among households who are otherwise unlikely to be able to access affordable financing. Program managers expect that they will make a minimum of 400 loans, utilizing up to $6 million over the next two years. 

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