The Cornerstone Community Loan Fund borrows from socially conscious investors and re-lends to nonprofit, community-based housing groups. Through the Loan Fund, average people can put money that they are saving for some future purpose to work in the meantime to benefit the less fortunate.
- The current size of the Loan Fund is $924,533.00. Of this, $764,000 is borrowed from socially conscious investors and another $160,533 is equity (retained earnings and donations).
- Investors (lenders) complete a form with their investment which allows them to choose the term, amount and interest rate of their loans. They receive a promissory note back from Cornerstone Community Loan Fund. Investor’s loans range from $500.00 to $100,000.00. Interest is paid bi-annually in March and October. The average interest rate paid to lenders is a little over 2%, although rates range from 0% to as high as 3%. The low rate of interest paid to investors in the fund lowers the cost of development financing which is passed on in the form of lower rents for low-income residents. The Cornerstone Community Loan Fund lends the money to housing development projects at low-interest, matching the term of the borrower loan with the expiration dates of the lenders’ loans. We have the money back from the borrower in time to repay the investor when their money is due. The default rate of borrowers over the past 24 years is less than 2% and no investor has ever lost money.
- Cornerstone charges borrowers a slightly higher rate of interest than it pays its lenders in order to cover the operating costs of the Loan Fund.