Frequently Asked Questions—Positive Social Purpose Lending Program
Q. What is the Positive Social Purpose (PSP) Lending Program?
A. The PSP Lending Program is designed to earn a market rate of return through loans made to real estate projects that impact low- and moderate-income individuals, families and communities.
Q. How long has the program been in existence?
A. The PSP Lending Program started in 1990. The program has had several names over its history. Today it is called the Positive Social Purpose (PSP) Lending Program.
Q. How large is the PSP Lending Program?
A. The program began in 1990 with a $25 million commitment. Over the years, the program has cumulatively financed over $2 billion in affordable housing and community development loans. The total outstanding balance fluctuates over time as loans are paid off.
Q. Is the PSP Lending Program a direct lender?
A. No, the program does not make direct loans or originate loan transactions. It works through a network of partners that we refer to as intermediaries that present Wespth with opportunities to purchase loans supporting community development projects.
Q. What is an intermediary?
A. Within the PSP Lending Program, an intermediary is a third-party organization that finds loan opportunities for Wespath and that provide services to support the PSP Lending Program. Intermediaries provide assistance in evaluating loans, collection of borrower payments, and monitoring of properties. Additionally, intermediaries may provide credit enhancement to Wespath. See the PSP Lending Program article, “Credit Enhancement and the Positive Social Purpose Lending Program”, for more information on credit enhancement.
Q. In which type of projects does the program invest?
A. The PSP Lending Program invests in three main categories of projects:
multifamily rental housing;
community facilities, such as charter schools, health care, day care and other facilities that support low- and moderate-income communities; and
Q. What type of financial return does the PSP Lending Program seek?
A. The program seeks a market rate of return that is comparable with investments of similar maturity, risk and structure that other investors such as banks might make.
Q. In which locations does the PSP Lending Program invest?
A. The program is geographically diverse and has made investments in all 50 U.S. states and the U.S. Virgin Islands. Through our international microfinance program, we have made investments in South Africa, South America, Eastern Europe and Southeast Asia. You can also view a map with many of the Wespath-financed properties.
Q. Who benefits from the PSP Lending Program investments?
A. Wespath participants benefit from the positive financial returns; targeted individuals and families and underserved communities benefit from new or redeveloped assets, social services and job opportunities; and we all benefit from more vibrant and stable neighborhoods that have quality schools and the necessary supporting services that contribute to thriving communities.