We have a not for profit entity that purchased an existing building that they were renting from a church and used as administrative offices. This entity offers medical and housing services for seniors. The entity is owned by a church. We would like the loans for this purchase to be considered for CRA but want to know if this makes sense? Do we need more info to support our recommendation?

Trees,

Are you trying to get CRA credit for the loans under the Community Development Test?

If so, it sounds like what you described is likely to qualify. However, just its non-profit status alone will not qualify it for CD credit. If I was looking for additional support I would try to find any information from the organization that indicates that the seniors being served are LMI individuals. Since they are providing medicals services they may have information about how many of the patients qualify for Medicaid. If its over 50% then its a slam dunk.

If the organization is large enough to produce annual reports you can usually find good information about the populations they serve in those reports. Getting the numbers or percentages of LMI served seems to get things qualified more easily. From my experience, when an examiner sees "62% of patients qualify for Medicaid according to 2015 annual report" they qualify it and move on. Of course I would make sure that's what the annual report says........

Review the definitions of community development to see how your loan could qualify. As stated above, just involving a not for profit or services to seniors won't do it. And just being owned by a church won't do it.

You will need to show that this involves services to low to moderate income individuals. If yes, are services provided at this building? How does this help for the services provided..how does it help the organization to carry out their mission.

All of this must be documented in order to be granted credit. I have seen clear cut cases for CD credit rejected because of a weak presentation. Gather everything that you can and present why it qualifies.

In other words, wrap it up in a nice neat package with a bow on top! No, seriously - think of it as if you are presenting a business investment for Shark Tank, and your examiners are the Sharks. You need to do your best to "sell" your Community Development loans, investments (including donations), and services.

Is the loan secured by the building (nonfarm non residential property)? If so (secured by nonfarm non residential property) and in an amount <$1million it should be classified and reported as a small business loan on the CRA LAR - More than likely falls on Line 01e1 on the CALL Report.

If >$1 million and secured by nonfarm non residential property or not secured by RE in any dollar amount then it could possibly gain CDL credit by proving your case as other BOLers cited above.