A partnership between the Town of Chapel Hill and the UNC Health system is officially ready to help boost local affordable housing efforts.
In a release Thursday afternoon, the local government announced its Affordable Housing Loan Fund with the healthcare system and Self-Help Ventures Fund is launching to applicants after reaching the $20 million threshold. The fund, started in late 2023, will provide below-market loans to “support the acquisition, preservation, and creation of affordable housing in Chapel Hill” as the town aims to address a shortage of below-market-rate housing units within the area.
“The Town is thrilled to launch this new tool to support the creation and preservation of affordable housing in Chapel Hill,” Sarah Viñas, director of the Town’s Affordable Housing & Community Connections Department, said in the release. “We appreciate UNC Health and Self Help’s partnership on the Loan Fund. This is a great example of what we can accomplish together when we work across industries to address one of the community’s greatest challenges.”
“UNC Health is proud to partner with the Town of Chapel Hill on this important initiative,” President of UNC Hospitals Janet Hadar said about the regional issue of affordable housing. “As individual entities we can’t solve this crisis alone, but by working together, we can make a more meaningful change and positively impact residents and the community. We look forward to seeing what the loan fund will accomplish.”
The impetus of the fund came from UNC Health’s request to continue expanding its Eastowne campus in Chapel Hill, as the statewide system aims to add between eight and ten new medical buildings at Eastowne Drive off U.S. 15-501 across two decades. Chapel Hill’s town council pushed for a significant housing contribution to either be on-site of paid for in lieu to plan for an influx of workers at the outpatient facilities, to which UNC proposed a $5 million contribution to begin this loan fund. The town eventually added $750,000 of its own money, and partnered with Self-Help Venture Fund to attract other investors to grow the fund’s coffers to $20 million.
A concept rendering of UNC Health’s proposed Eastowne Development project as presented in May 2023. The project could include constructing a parking deck on hickory oak forest (far right), a national heritage site. (Photo via UNC Health/Town of Chapel Hill.)
Self-Help Ventures Fund, which is a nonprofit from the Durham-based Self-Help Credit Union, will operate as the administrator of the fund — meaning it will review and underwrite loan applications, while being the main stakeholder monitoring the loans issued. The revolving loan fund will have two options available to applicants: preservation or creation efforts for affordable housing. The funding can range between $500,000 and $7 million, serving either as a five-year bridge financing option or 15-year permanent subordinate financing.
Chapel Hill Mayor Jess Anderson described the fund as a more flexible and attractive option for developers.
“This could be the thing that pushes someone over that ‘Am I going to do market rate vs. affordable’ [line],” Anderson said to Chapelboro. “One of the things we hear from applicants a lot is that financing is driving what type of projects they do, and this is a way to remove one of those barriers. Is it going to mean that everybody’s going to be building only affordable housing? Certainly not — but I think in those cases where we have someone who really wants to do it, this is going to be the way they can actually make that happen.”
Anderson also said having the loan fund will be another way to help the town be more nimble in executing projects, compared to pulling from its affordable housing allocation within its annual budget. For this past fiscal year, that totaled $7.4 million as the town reported building six new affordable units and preserving 164 others. While that represents an improvement — and while there are more than 1,000 affordable units around town set to be developed in the next five years — she said she can think of missed opportunities by the town because of its lack of accessible funding.
“There were times we knew that we wanted to preserve or do something [with a neighborhood],” Anderson said, “and we just didn’t have the capital sitting there. So, it’s just a huge step forward for our ‘housing’ plan, and it’s another great example of our partnership with UNC, and with the help of Self-Help.
“It’s so exciting, and it’s just one more way that we’re seeing these plans and these visions for our [community’ future] being operationalized on the ground,” the mayor concluded.
According to the Town of Chapel Hill announcement, developers interested in applying for loans from the Affordable Housing Loan Fund should contact the Self-Help Ventures Fund lending team at [email protected].
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