KMA was instrumental in helping the San Diego Housing Commission prepare its innovative Finance Plan, which was approved and launched in 2009. The Finance Plan guides the acquisition and development of new affordable housing units by leveraging SDHC's existing portfolio. The Finance Plan allows SDHC to provide a variety of new affordable housing opportunities, while generating sufficient cash flow to service debt and meet operational expenses.
SDHC implemented an "entrepreneurial investment strategy" to help make the new affordable housing units a reality for San Diegans. The funds included low-interest Fannie Mae and FHA mortgages obtained by leveraging the equity in its existing 1,366 housing units, while portions of funding also took advantage of the federal Build America Bonds programs (which offers an annual 35% rebate of interest payments).
KMA modeled SDHC’s cash flow and fund balance experience over a five-year period. The KMA cash flow was used to measure potential funding sources based on various financing terms and operating income/expense assumptions. The cash flow model was also used to evaluate alternative investment opportunities that fulfilled SDHC’s goal of creating a minimum of 350 additional new affordable units. SDHC exceeded this goal by generating enough funding for over 700 additional new affordable units.