About the Catalyst Fund
The Catalyst Fund is a bold step forward to address Nashville's housing needs and increase housing security for local residents.
As a partnership between the Metropolitan Government of Nashville and Davidson County and the Community Foundation of Middle Tennessee, the Nashville Catalyst Fund seeks to bring together the public sector, the philanthropic community, and the private sector to help address the many challenges facing affordable housing in Nashville.
The Need for Affordable Housing in Nashville
Housing costs have skyrocketed in the past decade, the supply of affordable homes has decreased, and current market trends are making the situation worse. It continues to become more expensive to build new housing where it is needed most — close to transportation, jobs, schools, and other amenities.
The number of new housing units needed by 2030 with Nashville's current growth
The number of units needed for households earning below 80% of the median household income
The number of units a $75mm Catalyst Fund could preserve or create over 10 years
More than half of Nashville renters are paying too much of their income in rent
Renters are only required to receive 30 days notice if their lease won’t be renewed, leaving too many families scrambling to find a new home with access to schools and jobs. Home prices have increased more than 40% in just the first three years of this decade. The challenges facing Nashvillians are great and the time for action is now.
The Catalyst Fund will seek to preserve housing currently affordable to working Nashvillians and create new affordable housing
The Fund will provide early-stage capital to mission-driven developers in Nashville so they can be more competitive in the race to preserve existing regulated and unregulated affordable housing, and to accelerate the creation of high-impact affordable housing. The Fund is also focused on enabling non-profit and emerging BIPOC developers to support effectiveness and success in the market.
Responding to Nashville’s Affordable Housing Needs
Local
The Catalyst Fund is a new tool that responds to the specific conditions faced by affordable housing developers trying to increase affordable housing production in Nashville. Loan products are tailored to the Nashville market and are designed to support the preservation and construction of affordable housing.
Responsive
Mission-driven developers that are being outcompeted in the race to preserve older affordable housing buildings and acquire land for affordable housing development will be able to execute a quick acquisition at terms that makes the project financially feasible via the Fund’s acquisition loan product.
Unique
The Fund provides loan products that are not available elsewhere in the market that can preserve the affordability of housing in an increasingly competitive market. First loss capital from Metro enables the Catalyst Fund to take early-stage risks that other lenders cannot, accelerating the timeline for preservation and creation of affordable housing. In addition, the Fund’s bridge loan product allows mission-motivated developers to jumpstart their projects without waiting to receive public subsidy or grant proceeds.
Inclusive
Loan products are specifically designed to include and support non-profit and emerging BIPOC developers within the affordable housing sector. The Fund is a new source for predevelopment loans that target high-impact projects led by emerging developers.
How It Works
By blending capital from a range of sources, the Fund will provide early-stage capital to mission-driven developers to support the preservation and creation of affordable housing supply in Nashville.
Investment Committee
The Investment Committee is the governing body for the lending decisions of the Catalyst Fund
Hannah Davis
Fund Management
The Catalyst Fund is managed on a day-to-day basis by Forsyth Street Asset Management, in collaboration with the Community Foundation of Middle Tennessee and Pillars Development. Additional analytic support is provided by Nelson Community Partners.
Community Foundation of Middle Tennessee
A 32-year-old public charity with over $600mm in assets under management, serves as fiscal sponsor. CFMT is responsible for managing compliance for the Metro grant.
Forsyth Street Asset Management
A Registered Investment Advisor with $310M+ assets under management, provides its existing infrastructure, underwriting expertise and relationships. Forsyth Street is a fiduciary to the Fund.
Pillars Development
A community-focused land use development firm with a portfolio of over 1,000 acres planned, 6 million square feet constructed, and nearly $4 billion in total development. Pillars will serve the Fund as the primary contact for potential borrowers.
Nelson Community Partners
As Nashville’s most trusted affordable housing partner, NCP has helped lead the development of over 1,000 affordable and mixed income units and has an asset management portfolio of an additional 2,500 affordable units. NCP will serve as an advisor to the Fund.
Financing Partners
The Catalyst Fund is grateful for the support of its financing partners.
