Renewing Our Commitment to Affordable Housing in South Texas

We recently renewed our $2 million loan to Affordable Homes of South Texas, Inc. (AHSTI), the largest developer and lender of deeply affordable single-family homes in the Rio Grande Valley, just north of the US-Mexico border near the Gulf Coast. Founded in 1976, AHSTI's mission is to enhance the quality of life for families in the Rio Grande Valley and surrounding areas by providing affordable housing to low-income, working families who might not otherwise qualify for a conventional bank mortgage. We have been lending to AHSTI since 2006 and value the unique approach AHSTI staff take to their work; the organization is deeply embedded in the community and provides many services to its community such as home ownership readiness classes, credit counseling, and home repair workshops – most services are provided at no charge.

AHSTI uses financing from Calvert Impact Capital to fund its development activities, which include the acquisition of land, subdivision of the land, construction of new single-family homes, and rehabilitation of existing homes. Our capital is well-suited to this purpose: it is flexible, unsecured, and carries a term that comfortably exceeds the length of AHSTI’s development cycle. During a site visit in April 2019, along with colleagues Vanessa Moulin and Caitlin Rosser, I was able to see the true impact of our capital and of the work AHSTI is doing in its community.

Photo: AHSTI's Homeowner Training House, where owners can learn basic and advanced home maintenance and repair skills

Hidalgo county in South Texas is home to the highest concentration of colonias in the nation. Colonias are unincorporated settlements that frequently lack water and sewage systems, electricity, health facilities, paved roads, and suitable housing. Many of AHSTI’s clients -- 98% of which are low-income, 72% are Hispanic or Latino, and 100% are US citizens -- would alternatively live in colonias if not for AHSTI. Their clients typically find AHSTI through a referral from a friend or family member, and about 45% enroll in homeownership counseling and readiness classes before applying for a loan with AHSTI.

Photo: The Mata family outside their new home

Once they are ready for homeownership and approved for a loan, they identify the right subdivision in the area for their family and work with AHSTI on a range of home customizations. Their home is then customized, managed, and inspected by AHSTI’s top notch construction management team, and upon completion, the family closes with AHSTI and can move in. The homes AHSTI builds are quality and durable, built out of brick as opposed to siding, and typically start at around $85,000 for a 3BR/2BA ($25,000 less than their next closest competitor). In addition, AHSTI is the loan servicer, which means the families maintain their relationship with AHSTI while making their mortgage payments.

Photo: Calvert Impact Capital staff touring one of AHSTI's new neighborhood developments. AHSTI is putting the final touches on this home before installing the lawn. Then the homeowner and their family will move in.

Photo: Calvert Impact Capital staff get an inside view of a newly built home

All of AHSTI’s activities are aligned with their belief that owning a home leads to familial wealth creation and long-term impact; paying off a mortgage and owning a home can help lift families out of the generational cycle of poverty and create wealth for generations to come. We were thrilled to be able to visit with such a diligent and deeply embedded community organization and are happy to continue supporting AHSTI through this latest loan renewal.

Be sure to check out our entire portfolio list and the borrowers we finance to find out more about the impact of our affordable housing portfolio and beyond.