Land-Banking: More than TOD

Guest post by Kim Herman, WSHFC, and Judith Olsen, Impact Capital


HDC’s Housing and Transit Forum last November included a great conversation about the role of land-banking in preserving space for transit-oriented development (TOD).

But land-banking isn’t just for TOD. The Housing Finance Commission’s Land Acquisition Program (LAP)—often in partnership with Impact Capital—offers this tool to any nonprofit housing developer.

Flexibility and strategic planning are this program’s key benefits. By helping nonprofits purchase land now for development later, LAP allows them to take advantage of current prices and get control of the site early on, before putting the rest of the financing together.

How? The Land Acquisition Program is a revolving loan program with low rates, created by the state legislature in 2007 and matched by Commission funds. It’s been used all over the state for both multifamily and single-family development—from Housing Hope’s recently opened Monroe Family Village to Habitat for Humanity’s 12 new homes and park in Port Townsend a few years ago.

To date, LAP has loaned more than $10 million, paving the way for 21 new housing projects with 946 units—including 108 single-family homes.

What’s more, “team underwriting” by the Commission and Impact Capital can make LAP even more accessible and make financing go even further for nonprofits.

For example, LAP doesn’t finance the entire cost of acquisition—typically, 25% down is required. But Impact Capital can help bridge the gap, so the cash can be saved for pre-development and other needs. Impact Capital can also finance a site that collects revenue, such as a parking lot.

Once the Commission’s and Impact Capital’s financing are blended together, interest rates are very low—often just over 2%.

And it can be done fast. A LAP deal can be closed in 60 days—putting nonprofits in position to compete with the for-profit developer who also has an eye on the property.


Here’s an example: The Housing Authority of the City of Kennewick (KHA) wanted to create a seamless second phase for its Nueva Vista project by buying the adjacent parcel when it came up for sale. However, KHA needed acquisition and predevelopment dollars.

Thanks to LAP’s willingness to take the riskier second-lien position, Impact Capital could offer KHA a loan package at reduced rates and fees.  In total, the interest rate for the 100% LTV acquisition financing was just 2.13%.  Furthermore, because KHA applied simultaneously for two lending products, KHA’s out-of-pocket expenses for the acquisition and pre-development loans were reduced to just $4,500.

KHA just celebrated the opening of the first phase of Nueva Vista in January 2016, and can now focus on phase 2.

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Another example: Impact Capital recently partnered with LAP to help Housing Hope purchase two parcels in the Smokey Point region of Marysville. The new Twin Lakes Landing project on these properties can now be completed in two phases; our lending partnership allowed Housing Hope the peace of mind of acquiring and holding both parcels affordably until they could be developed. Construction on phase 1 will start this year.

As the above examples show, no two LAP loans look alike. Each one can be tailored to the needs of the organization, no matter what community and population it serves.

Affordable land-banking can put time on your side–and that means strategic planning and cost savings. If you’re interested in brainstorming with us about financing that could help you accomplish your goals, just call or email us.


Impact Capital:

Seth Benziger, Vice President, Lending

206-658-2605 [email protected]


Housing Finance Commission:

Dan Schilling (206) 287-4415 [email protected]

Jason Hennigan (206) 254-5370 [email protected]