Another way FNBO supports communities is through Impact Investing through our Community Development Corporation.
Impact investing refers to investments and loans made with the intention of generating positive, measurable social and environmental impact alongside a financial return. This type of community support is a critical component of the Impact by FNBO strategy. It is through these investments and loans FNBO is able to realize significant community impacts in service towards to support affordable housing construction and workforce development.
When two organizations share values and have the right resources to support one another’s goals, meaningful positive impact is inevitable. However, working together for more than a decade is much less common. FNBO and the Midwest Housing Equity Group, Inc. (MHEG) have partnered in more than 17 funds to create affordable housing units in a growing number of communities.
Headquartered in Omaha, MHEG serves as a nonprofit tax credit syndicator, providing expertise and guidance across nearly all facets of the development and management of affordable housing projects. The organization provides technical assistance to developers, owners and managers of affordable housing units, in addition to monitoring and mitigating risk of the properties for the 15-year compliance period. FNBO partners with MHEG to provide equity investments and loan opportunities to support affordable housing projects within the bank’s footprint. “We work closely with our investor-partners to understand where they want to provide funding. As FNBO expands into other states, we seek out developers, partner with housing agencies and learn all we can because each state is very different and has unique rules and needs,” Keely McAleer, Deputy Director of Operations, MHEG.
Through the Federal Community Reinvestment Act, financial institutions intentionally invest in communities where they operate, including low-to-moderate income and other underserved areas. Its partnership with MHEG provides FNBO with direct access to an expert who can help the bank identify communities in need. By committing funding in these areas, FNBO plays a vital role in helping to close the loop in these types of projects. These investments allow developers to move forward, which puts other necessary steps into action, ultimately resulting in quality housing units for people in need. Over the last 15 years, FNBO’s equity investments with MHEG totaled more than $122 million and supported affordable housing needs in urban, suburban and rural areas. “We feel a real responsibility to all of our communities, and as a subject matter expert, MHEG serves as a bridge to connect us to them in a way that's really meaningful,” Sara Going, Director, Community Banking.
Unlike typical investments, FNBO’s return comes in the form of federal tax credits and tax benefits associated with ownership in the funds over a 15-year period, meaning the partnership with MHEG gives the bank a source for delivering on its commitment to serving those who have historically had barriers to accessing quality housing and other challenges. “It’s not possible for the investors of these funds to build a team of people who can do what MHEG does. They have the resources to manage all aspects of a project, from funding to development through meeting federal requirements. Their ability to connect all of the dots allows FNBO to invest in the communities we serve and make a greater impact than if we tried to do this on our own,” Going commented.
As the relationship between FNBO and MHEG has evolved, trust and two-way communication have only deepened. Today, both organizations will reach out to one another to identify a community in need. As the FNBO footprint has evolved and grown, the bank has reached out to MHEG to help identify potential housing projects. An example of this includes the completion of Immaculata Plaza Apartments in Greeley, Colo. in 2023. FNBO helped MHEG fund a $500,000 short-term construction gap loan with the Archdiocesan Housing, Inc. to purchase construction supplies needed to rehabilitate areas of the building. This 55-unit project was created to minimize displacement of the existing senior residents, which resulted in improved living conditions and comfort knowing they would remain in the space they considered home.
To inquire about opportunities related to Impact Investing, please contact cdc@fnbo.com.