Child Care Facilities!

Children who participate in high-quality programs benefit intellectually, physically, and emotionally. Most child care classrooms are divided into activity areas: dramatic play space, blocks, quiet reading area, etc. To achieve the optimal arrangement, the space needs to be big enough, well proportioned (not too long and narrow, for example), and set up to provide visual separation between activity areas. Scaling bathroom fixtures, window placement, and other features to a child’s size helps to foster a sense of competence. But, by far, the greatest benefit to children arises from parents and staff feeling greater satisfaction with the facility and program.

Child/Day Care Funding Programs

U.S, Department of Housing and Urban Development

HUD: The large majority of HUD's funding is distributed in what are called "formula grants.” Formula grants are administered by state and local administrations. To find out how you can get connected to HUD funding opportunities in your community, contact your nearest HUD field office.

One of HUD's largest formula grant programs is the Community Development Block Grant (CDBG) program, which makes funding available for a wide range of activities aimed at improving neighborhoods. Locate the CDBG contact person nearest you!

U.S. Department of Agriculture (USDA)

Rural Development, Rural Housing Service: The Community Facilities Loan Program (CFLP) makes loans to develop community facilities for public use in rural areas and towns of not more than 20,000 people. CFLP funds may be used to construct, enlarge, or improve community facilities for health care, public safety, and public services. Child care centers are among the examples of public service facilities. Loans may also be used for the operation of these facilities. Eligible applicants are public entities and nonprofit organizations. Applications can be obtained at any of the 1,200 USDA Rural Development field offices. For additional information, contact the USDA’s Rural Housing Service at 202-720-1490 or on the Web at http://www.rurdev.usda.gov/rhs/index.html.

Who may apply: Community Programs can make and guarantee loans to develop essential community facilities in rural areas and towns of up to 20,000 in population. Loans and guarantees are available to public entities such as municipalities, counties, and special-purpose districts, as well as to non-profit corporations and tribal governments.

Loans and Loan Guarantee Funds

Private sector funds also can help finance needed facilities and other services to improve the supply of child care. Because the cost of constructing child care centers is high, state policymakers have been creating laws to offer financial assistance such as loans, loan guarantees, bonds and technical assistance. Some successful child care loan programs are administered by a community development financial institution (CDFI), which can generate financing for early care and education facilities. By working with CDFIs, states can leverage additional federal funds set up under the federal CDFI act and states can use the CDFI's financial expertise to manage the loan and provide technical assistance to child care programs. This approach has been used in Illinois, Massachusetts, North Carolina, Ohio and San Francisco.

What's a CDFI?

A community development financial institution, or CDFI, is a private sector financial intermediary that has community development as its primary mission and develops a range of programs and methods to meet the needs of low-income communities. CDFIs make loans and investments that are considered unbankable by conventional industry standards and serve borrowers, investees, and customers not serviced by mainstream financial institutions. They link financing to other development activities. You can find more information about the way CDFI’s work here.

What is a Facilities Loan Fund?

As described in the previous section, part of the facilities crisis in community-based family and child services is caused by the lack of capital to invest in physical improvements and capital purchases. These programs are often unable to satisfy conventional bank underwriting criteria. Facilities funds are banking institutions, too; they make loans. But unlike conventional banking institutions that line Main Street or occupy the most prominent skyscrapers in every big city, facilities funds are specialized nonprofit lending institutions. They are one of a broader class of lenders known as "development lenders" or CDFIs that are designed and capitalized to enable them to make some types of loans that commercial lenders find unattractive. The loans might be too small to be profitable. The borrower or project might be too risky for a variety of reasons. There may be insufficient collateral to secure the loan. The borrower may be unable to make a sufficiently large down payment. Perhaps there simply is not enough revenue to pay commercial rates of interest.

The Community Reinvestment Act – How it works for you

Pressures do exist to open bank lending to borrowers that are sometimes denied credit. The Community Reinvestment Act (CRA) has succeeded in getting banks to look more closely at potential loans they might once have rejected. The CRA also requires that banks insured by FDIC to adhere to certain guidelines. These guidelines are to the benefit of individuals and business that are located in what is referred to as "economically depressed" areas. CRA also requires financial institutions "give back" to the communities they are located in. This means that often banks will provide seminars or programs to educate community members about financial resources available to them. They may also provide lower interest rate loans to churches or other non-profit organizations to develop facilities that will benefit the community over all (i.e. day/child care facilities). The best source of information on such opportunities is your local bank.

Technical Assistance

Although making loans is a lender’s most obvious function, development lenders generally do more. Most provide technical assistance. Self-Help’s community facilities loan program published an excellent guide to understanding a child care program, The Business Side of Child Care: A Reference Manual for Child Care Advocates and Lenders (September 1997). The Nonprofit Facilities Fund of New York produces materials and offers training in facilities management. The Local Initiatives Support Corporation and its affiliate, the Community Investment Collaborative for Kids (CICK), make recoverable grants that enable providers to pay architectural, legal, and consulting fees to the members of the development team who plan the facilities project. The Child Care Capital Investment Fund has made grants to pay for an architect and a child care program consultant to jointly assess a provider’s space and make recommendations for how to improve it. The Ohio Community Development Finance Fund trains Head Start grantees in how to plan and finance new facilities. These are just some of the technical assistance initiatives sponsored by community facilities lenders.

Good Websites

http://www.schoolgrants.org/

http://www.schoolgrants.org/welcome.htm

http://www.providerwatch.com/resourcelinks.html#state

Daycare regulations listed by state.

http://www.rurdev.usda.gov/nc/comfacil.htm

http://www.ccdcorp.org/daycare.htm

http://kingdom-business.com/Churchfinance.htm

Loans

http://www.religiousloans.com/index.jsp

http://www.churchloans.com/

Building a Child/Day Care Center What you should know!

Building a Child/Day Care Center
What you should know!