SP Investment Fund, LLC, a Southern California-based company in the affordable housing sector, has undertaken numerous residential investments in conjunction with affiliates focused on improving the lives of those in their communities. SP Investment Fund’s investments in affordable housing have been focused on housing serving seniors and families with low and very low incomes. The SP website features access to a number of related resources, including the Urban Land Institute’s (ULI) Building Healthy Places Initiative. The ULI report, titled Retail in Underserved Communities, examines the access of people with limited means to a full range of retail offerings in an era of e-shopping. One major issue in underserved urban areas is that investors tend to focus on larger retail centers, and the small businesses that inhabit space-restricted urban-core sites often are out of reach of large-scale distribution networks. At the same time, the shopping centers that do exist in underserved communities have often lost major anchor chains, such as grocery stores and department stores. Sales volume tends to decline at these centers and members of the local community with mobility issues are the first to suffer, due to a lack of ready access to retail choices. The report points to a need to create coordinated urban revival strategies that encompass housing, retail access, and other aspects of well-being, such as health care. One success story is a neighborhood in Pittsburgh, where coordinated efforts by leaders of the East Liberty community attracted new retail tenants such as Home Depot and Whole Foods, and redefined the area as one with accessible shopping for local residents.
Focused on opportunities nationwide, SP Investment Fund undertakes the acquisition, financing, and rehabilitation of government subsidized apartment complexes. SP Investment Fund has also taken equity positions in several innovative startups involving biotech and health sciences that will contribute to society. In 2016 the company invested in Opentrons, which creates robots designed to enable collaboration among scientists in ways that produce repeatable results. Functions of the personal pipetting robots include automating repetitive, common workflows involving sample distributions and normalized concentrations across a plate. In addition, multiple plates can be filled and mapped within a matter of minutes. The protocol-automating functions of Opentrons’ products are used within laboratories spanning 30 countries. For example, at Dana-Farber Cancer Institute’s Blais Proteomics Center, Opentrons’ OT-One is employed in preparing samples for mass spectrometry. The recently introduced OT-One S is twice as fast as its predecessor and can fill a 96-well plate within a minute and a half.
Southern California-headquartered SP Investment Fund focuses on providing value by working with affiliates to purchase and rehabilitate government subsidized and market-rate workforce housing. Also active in the seed capital sphere, SP Investment Fund has placed equity in an array of technology startups, in areas from biotechnology to consumer Internet. In the latter space, SP Investment Fund is an investor in Y Combinator alum Razorpay which has developed a payments platform gateway for Indian companies seeking to operate efficient businesses online. Combining affordable pricing with an API that is developer-friendly, Razorpay’s system includes fully online onboarding designed to place entrepreneurs in a position of control over their payment ecosystems. The Razorpay platform is secure and compatible with the full range of international payment modes, from net banking to e-wallets. At checkout, a single JavaScript line seamlessly embeds cross-platform payment forms such that payments start and end on a single page through the tap of a button. With redirection handled via pop-up, the consumer never leaves the retailer’s site, which in turn maximizes revenue potential.
Investing in projects that deliver a positive social impact, SP Investment Fund and its affiliates focus on real estate and emerging technology investments. SP Investment Fund partners with various entities to provide affordable housing to low and very low income families and has so far invested in over 100 housing projects. Among its partners is Riverside Charitable Corporation. Riverside Charitable Corporation (RCC) is a nonprofit dedicated to providing people who cannot afford life’s basic needs with secure and service-backed affordable housing. It has also help thousands of qualified families buy their own homes. RCC provides community-centered educational and professional social services to the elderly, families, and children. As of 2016, the nonprofit has created over 90 communities, and has 11,366 families residing in RCC homes, with 5,872 of these families below area median income, and 1,701 of these families also living below the poverty line. Free to its residents, RCC’s professional supportive-services programs are self-sustaining and self-funded by each community and serve more than 10,000 families.
Based in Los Angeles, SP Investment Fund LLC invests in and rehabilitates government subsidized apartment communities. In addition, since 2014, SP Investment Fund has made investments in a variety of emerging technology companies that make a positive social impact. Some of these technology investments have received grants from governmental organizations and/or nonprofit organizations like the Bill & Melinda Gates Foundation.Founded in 2000, the Bill & Melinda Gates Foundation is a charitable group that focuses on four primary goals, including:1. Improvement of K-12 education. Investments in innovation allow the foundation to promote the advancement of programs for students in kindergarten through the 12th grade.2. Better access to nutrition. The foundation believes that nutrition has been an overlooked aspect of the fight for global health and development, and predominantly aims to combat starvation and malnourishment for women and children in developing countries.3. Health care for newborns, children, and women. To further protect women and children, the foundation focuses on providing tools and technologies that lower rates of infant and maternal mortality around the world.4. Creating healthy families in Washington State. The foundation is invested in specifically improving the lives of people living in the State of Washington, the state in which the organization operates. The measures the group takes to promote healthier families include investing in better education, reducing homelessness, and generating more social support for vulnerable families.
Along with various affiliates and partners, SP Investment Fund focuses its efforts on social impact and emerging technologies investments. SP Investment Fund and its affiliates have invested in projects that use a wide array of government subsidized affordable housing programs including Mark-to-Market, Project Based Section 8, low income housing tax credit, Community Development Block Grant, HOME, FHA Section 236, FHA Section 221(d)(3), FHA Section 221(d)(4), tax exempt bond financing and Flex Subsidy. One of these programs, the Mark-to-Market program was created by the Multifamily Assisted Housing Reform and Affordability Act (MAHRA) of 1997, in which the U.S. Department of Housing and Urban Development (HUD) authorized the Mark-to-Market initiative. Designed to preserve affordable housing for low income residents while also reducing federal monetary assistance, Mark-to-Market looks at HUD-insured multifamily rental projects and restructures mortgage payments if necessary. The Mark-to-Market program also ensures that a competent management team is in place so that restructured projects can be sustained long term. As part of the Mark-to-Market process, local housing authorities or agencies work with eligible properties to identify appropriate rental costs, any necessary improvements to the property, and if any financial restructuring is needed to make the operation feasible. As part of the process, the Project Based Section 8 contract is often adjusted downward so that rents are equal to market rents. The FHA mortgage is also extended with the current balance being amortized over the new term, often resulting in lower mortgage payments. If the property cannot afford its debt service payments, the FHA mortgage is typically divided into an A piece, that carries current payments and will be amortized over the new mortgage term, and B and C pieces that accrue interest at 1%, carry no fixed payments and instead are entitled to payments based on a percentage of cash flow with the remaining balance being owed at the time the first mortgage is due.
SP Investment Fund and its affiliates have constructed, preserved, and enhanced affordable housing since 1990. SP Investment Fund invests in government-subsidized apartment communities. Through its work, SP has gained experience in the HOME Investment Partnerships Program initiated by the U.S. Department of Housing and Urban Development. The following questions and answers give a clearer picture of the program.
1. What is the HOME Investment Partnerships Program?It is a formula grant given to state and local governments to provide money for carrying out different activities related to buying, building, and refurbishing affordable housing, which can then can be sold or rented out or used for providing rental or other assistance to low-income households.2. Who is eligible to get the formula grant?All states are eligible. Local jurisdictions and legally binding consortia of municipalities that can meet the threshold for funding of at least $500,000 are also eligible.3. Who are the eligible beneficiary households for the HOME Investment Partnerships Program?The eligibility of beneficiaries is determined by the type of activity being funded. For instance, when at least 90 percent of the beneficiary households have income that is less than 60 percent of the Department of Housing and Urban Development’s adjusted median family income for that location, the households are eligible for rental housing and rental assistance.
