Island Loan Fund: community lending
Through the years, many Orcas Islanders have purchased their home or financed some aspect of their business expansion by borrowing from individuals, rather than banks. These loans have largely been based on personal relationships, but some lenders have made loans because they view it as an important part of the island’s economic sustainability.
The Island Loan Fund – being incubated as a program of OPAL – will continue this tradition of matching individuals who wish to lend money with individuals who wish to borrow by providing a nonprofit intermediary with the skills to underwrite borrowers and provide technical assistance so that borrowers will be successful.
The mission of the Island Loan Fund is to foster economic development and help sustain economic and demographic diversity on Orcas. The Loan Fund will make loans for housing to creditworthy individuals who do not meet bank lending standards. Local bankers – understanding the limitations of their traditional institutions – are partners in this venture. In the future the Island Loan Fund may also offer a line of credit for local nonprofits.
Is there a precedent for similarly structured funds?
- There are hundreds of successful community loan funds throughout the country, yet few that engage in mortgage lending, and none that we have found who match social impact investing with mortgage loans. This means that we can borrow best practices from loan funds that have succeeded, while also innovating to bring new elements to the model.
What types of loans will the fund make?
- The Island Loan Fund will provide real estate based mortgage loans for individuals and non profits. It is possible at a later stage that the produce offerings may be expanded.
What benefits does the Loan Fund present to borrowers and fund investors?
- Community members not able to access traditional bank financing will benefit from borrowing capital to purchase a home or complete home repairs.
- Fund investors will benefit from a community-focused initiative providing a reasonable investment return, together with significant value to our local community.
What has to happen before the Island Loan Fund is launched?
- We are working on adopting the policies and procedures that follow the appropriate regulatory requirements monitored by Washington State’s Department of Financial Institutions.
- Information on the Island Loan Fund
Loan Fund Working Group:
- Eros Beliveau, OPAL Homeowners
- Julie Brunner, OPAL Housing Manager
- Lisa Byers, OPAL Executive Director
- Jamie Cier, Branch Manager, Washington Federal, Eastsound
- Alex Conrad, International Business Consultant (lead on Loan Fund Business Plan Development)
- Martha Fuller, Retired CFO
- Ian Van Gelder, Acupuncturist and OPAL Homeowner
- George Zweibel, Retired Attorney
Advisors:
- Michael Brennan, Investor
- Ken Katz, Small Business Owner
- Allen Smith, Retired CEO