Realizing Gain, Strengthening Communities
The Positive Social Purpose (PSP) Lending Program is an investment opportunity with a clear difference. It seeks market-competitive returns, by acting as a source of long-term capital in traditionally underserved lending market niches. Designed to complement our traditional fixed-income mortgage investments, the program offers attractive credit spreads commensurate with risk, while providing strong prepayment protections. It is an important strategic element of our Fixed Income Fund.
The program’s philosophy is to help people who lack ready access to capital in their own communities by facilitating responsible, risk-adjusted investments.
Cooperative Engagement
The PSP Lending Program provides capital indirectly by working with a network of intermediaries – generally nonprofit organizations such as community development financial institutions (CDFI). These organizations provide initial project due diligence, underwriting and ongoing servicing along with asset and loan management services. We evaluate the lending opportunities presented to us and provide a source of capital. We engage the services of highly qualified, professional third parties that assist us in administering and monitoring our loans as well as provide a daily assessment of fair market value.
By partnering with us, intermediaries are able to make larger loans and serve more borrowers, while Wespath obtains credit enhancement through senior loan participation. We believe that this cooperative concept yields better risk management. The complementary interaction of its internal PSP team, the Intermediary CDFI, the master servicer and pricing vendors, provides excellent oversight for the program and our investment in PSP loans.
Good Outcomes for All
The PSP Lending Program provides a financially viable and forward-looking way to positively influence the lives of thousands. In addition to achieving market-competitive rates of return, the program seeks measurable social benefits that include the creation of:
- Multifamily housing, such as homeless shelters and affordable, senior and special-needs housing
- Community facilities, such as health care and day care centers that support low- and moderate-income communities
- Charter schools
- International microfinance loan opportunities
The PSP Lending Program is a winning proposition for all concerned. Investors benefit from the positive financial returns and responsible governance; individuals and families in underserved communities benefit from new or redeveloped assets, social services and job opportunities; and we all benefit from more vibrant and stable neighborhoods that have quality schools and the supporting services that contribute to thriving communities.