COLUMBUS, Ga. (WRBL) – Synovus and NeighborWorks Columbus have entered into a new partnership aimed at creating safe, fit, and affordable housing low to moderate income Columbus families.
The new program is an Equity Equivalent Investment, a capital product for Community Development Financial Institutions and their investors.
Known as an EQ2, the investment creates a long-term, deeply subordinated loan with features set up to have the loan function like the equity that for-profit companies would issue as stock.
- The equity equivalent is carried as an investment on the investor’s balance sheet in accordance with Generally Accepted Accounting Principles (GAAP)
- It is a general obligation of the CDFI that is not secured by any of the CDFI’s assets
- It is fully subordinated to the right of repayment of all of the CDFI’s other creditors
- It does not give the investor the right to accelerate payment unless the CDFI ceases its normal operations (i.e., changes its line of business)
- It carries an interest rate that is not tied to any income received by the CDFI
- It has a rolling term and therefore, an indeterminate maturity
“Our equity investment, a revolving capital fund, will assist low to moderate income metro Columbus residents in acquiring a home through NeighborWorks’ HEART Program (Home Ownership Earned and Reached Together) and is a demonstration of our commitment to partnering with agencies and organization that strengthen historic neighborhoods and the community at large,” said Gloria Banks, Synovus Chief Ethics and Compliance Officer.
The partnership will be announced during a media event Friday February 28th 10 a.m. at 412 Clardon Ave in front of one of their HEART homes.
“We couldn’t be prouder to support the great work of NeighborWorks® Columbus and its commitment to improving the quality of life in our hometown through the foundation of safe, fit, and affordable housing.”
The event will feature key speakers from both Synovus and NeighborWorks Columbus, as well as Jerry “Pops” Barnes from District 1 Councilman.