ATLANTA & SAN FRANCISCO--(BUSINESS WIRE)--The Promise Homes Company (TPHC), one of the largest minority-led owners of institutional-quality, single-family residential rental property in the United States that serves working-class and middle-class communities announced today that First Republic Bank (NYSE: FRC), a leading private bank and wealth management company, has made a multi-million dollar purchase of Preferred Units. The proceeds in part will be utilized to evaluate new investments in single family rental properties across the Southeast U.S., which may also qualify for Community Reinvestment Act (CRA) credit for First Republic.
This innovative investment serves key objectives for both parties as well as residents and vendors of Promise Homes:
- Resources to meet increased demand for affordable housing in leading markets for single family rental homes, primarily greater Atlanta
- Enhances resiliency and creditworthiness of Promise Homes residents to improve their long-term financial stability—residents can utilize free credit counseling and financial literacy programs offered by Promise Homes’ partner Operation HOPE
- Solidifies Promise Homes ability to support local, minority-owned and -led service providers for repairs and maintenance (contracting currently running at more than 60% of all vendor contracts)
- Use of First Republic’s capital base to spur growth in high-quality, single family rental properties, broadening what typically has been considered a CRA-type investment.
“This pioneering transaction with First Republic demonstrates its leadership in the banking community through its development of innovative financing solutions that address the nation’s ongoing need to close the racial wealth gap by increasing minority qualification for home ownership. Specifically, this investment expands the use and innovative allocation of CRA investments by FDIC insured banks. Single family homes are typically the largest asset in nearly all American families and a key driver of intergenerational prosperity, and this is about expanding affordable single family residential rentals, and ownership opportunities, in diverse, underserved communities,” said John Hope Bryant, Chairman of The Promise Homes Company. “We thank First Republic for its foresight, and we encourage other financial institutions to follow its lead in providing capital to those providing homes for middle-class families, and we appreciate its support of our mission—to develop a process of building credit so that hardworking people can one day own their own home.”
“Dedicating much of my career working toward raising the prosperity of all Americans, I applaud this private sector solution to the growing economic divide--as America contemplates how to use CRA to increase access to capital in order to revitalize communities and to increase minority homeownership,” said Joseph Otting, former U.S. Comptroller of the Currency. “The Promise Homes Company and FRB’s longstanding commitment to addressing the needs of underserved communities is noteworthy, and more importantly, they combined to develop an innovative structure to put capital where it is so sorely needed.”
About Promise Homes
Launched in May 2017, the Promise Homes Company is one of the largest minority-controlled owners of institutional-quality, single-family residential rental property in the United States, with a focus on working class and middle-class communities. Promise Homes offers its residents quality housing at affordable prices as well as financial empowerment and assistance that would position them financially to eventually own a home. Promise Homes also contracts with local, minority-owned businesses for property maintenance services, thereby creating local, sustainable jobs in the communities where it invests. Promise Homes is led by Chief Executive Officer John Hope Bryant, an entrepreneur, author, philanthropist, and prominent thought leader on financial inclusion, economic empowerment and financial dignity. For more information, please visit http://www.thepromisehomescompany.com.