Breaking Ground
Breaking Ground:Maria Barry, Community Development Banking National Executive, Bank of America
By Darryl Hicks
11 min read
Bank of America Community Development Banking (CDB) provided $7.85 billion in loans, tax credit equity investments and other real estate development solutions in 2022, surpassing the previous record of $6.7 billion generated in 2021.
The person overseeing this remarkable effort is Maria Barry, who became CDB’s national executive in September 2009. CDB has produced five consecutive record years, representing more than $26.6 billion of debt and equity financing and helping to create more than 60,000 affordable housing units.
Barry also oversees an exciting new program—called the Middle-Income Housing Preservation Fund—that BofA will use to help finance affordable housing for middle-income wage earners making 80 to 120 percent of area median income, who make too much to live in subsidized housing and too little to comfortably afford market-rate housing.
In addition to overseeing CDB, Barry is actively involved in mentoring men and women within BofA, and throughout the industry, to help them achieve future success both personally and professionally.
Tax Credit Advisor sat down with Barry to learn more about BofA’s affordable housing initiatives and her mentoring efforts.
Tax Credit Advisor: In 2022, BofA’s tax credit investments amounted to about $2.7 billion, the bulk of which involved Low Income Housing Tax Credits. How many LIHTC projects does BofA typically invest in each year? How many are in your pipeline? What regions of the country are you most active in?
Maria Barry: BofA participates in over 100 deals a year, providing both equity and debt financing. We also work with our developer partners to place permanent loans elsewhere outside the bank. We are very much a one-stop shop. One of the great things about BofA is that we are all over the country and so we’re active in all of the major cities. In 2022, our West Coast team also exceeded a three-year goal to double the number of affordable units that we financed in California.
TCA: What types of LITHC projects do you find most appealing and why? Given the seriousness of the affordable housing crisis are there any new markets that you’re looking to invest in this year or next?
MB: It starts with our clients and the deals they’re working on. We also look at our Community Reinvestment Act (CRA) needs across the country. We look for strong projects that are going to be successful for our clients and for the residents. A lot of the developments we finance, particularly now, have great resident services and that really is what helps create the most vibrant communities. These developments tend to be safer, and the residents thrive and encourage each other to finish school, grow, get good job training, take care of themselves and eat well. It all kind of flows together, but it starts with our clients.
TCA: CDB also invested $200 million in Historic Tax Credits (HTC) and New Markets Tax Credits (NMTC) last year. How many HTC and NMTC projects does BofA typically invest in each year? How many are in your pipeline? What regions of the country are you most active in making these investments? Do you often twine these credits with LIHTC or will you finance deals that just have HTCs or NMTCs? Are there any plans at BofA to increase HTC or NMTC investments?
MB: We invest in seven to ten HTC projects every year, while our NMTC investments are primarily in funds that support about 20 to 25 deals annually. We’re always looking for new opportunities in both of those pipelines. The lead time tends to be about 12 to 18 months, so we probably have about a year-and-a-half of HTC deals in our pipeline, so let’s say ten to 15. Demand for HTCs has been highest along the East Coast and in the Midwest, but we have invested in California too. For NMTCs, most of those deals are located on the West Coast and Midwest. We do work on deals that combine LIHTC and HTC—many of them historic mill redevelopments—which is helpful from a capital stack standpoint, being able to have that additional HTC subsidy in the project. Most of the HTC projects involve multifamily developments, but we’ve also financed some theaters and multi-use spaces.
TCA: Is there an HTC or NMTC project that stands out from 2022 that you’d like to highlight because of the impact it had on the community?
MB: Yes, on the historic side, there’s a project in St. Louis that involved the Butler Brothers Building. It’s a historic warehouse that takes up an entire city block and was vacant for more than a decade. It was designated as being blighted by the City of St. Louis but is now a mixed-use residential building with ground-floor retail that is helping to transform an entire neighborhood. There’s an NMTC project called Broadway Use Center Support Corporation that involves a 20,000-square-foot medical facility in Chicago that provides primary care, behavioral and social support services and an LGBT cultural program. It’s a great example of what NMTC can do.
TCA: I’d like to move now to your loan programs and, in particular, the Middle-Income Housing Preservation Fund that was recently announced in partnership with Enterprise. What can you share about it?
MB: We’re really excited about this. We have worked with Enterprise for a long time, so this is another initiative that we decided to work on together. We’re going to leverage Enterprise’s acquisition, due diligence and investment management platforms to identify opportunities and the goal is to preserve middle-income housing. This is an equity investment on our part. There will be a corresponding debt piece, but that’s not something we’ll be providing. It’s probably going to be more agency-type debt. The term will be around seven years to coincide with the debt on the property. Our hope is that the equity investment will bring down the overall cost of capital to preserve the rents and maintain the affordability of the building. We’re in the early stages of deploying capital. We are looking at projects that are well-positioned and where we have a partner who shares our view and goal of maintaining affordability. We want properties that will perform well and have enough reserves so that they can be fixed up as time goes on. The goal here is to help people access housing. We’re calling it middle-income housing because it’s housing for people who make too much to be able to live in a tax-credit property but don’t have enough resources to live in a traditional market-rate development. Our hope is that this gives families the ability to live closer to where they work and have enough funds for critical needs, such as transportation, food and healthcare. In terms of who can access these funds, we’re mostly focusing on clients of BofA and or Enterprise, and as for potential markets, we’re looking at major growth areas where rents are outpacing wages for middle-income earners.
TCA: Presumably, these are acquisition rehabs?
MB: Yes.
TCA: If the bank is looking to help provide equity that will help sustain more moderate rents, does that impact what you look for in terms of yield?
MB: We’re open to looking at yields that would be less than the traditional private equity product for these developments.
TCA: In terms of making the numbers work is there a percentage of units that will be allocated to middle-income?
MB: Ideally, the entire building would be middle-income. However, we would look for at least half of the units to be allocated to middle-income housing and then we’d ask for a longer-term commitment to keeping those units affordable.
TCA: How many projects have received funding so far?
MB: We just launched the fund. We have some deals that we’re looking at right now that seem to fit the profile. We are targeting the third quarter to close our first deal.
TCA: Last year, BofA provided $5.2 billion in debt commitments to finance affordable housing deals. What other BofA loan programs are most popular with developers?
MB: Combining four and nine percent LIHTCs has been in place for a while and we continue to see it quite a bit. Additionally, income averaging and including HTCs in deals are very common. Our developer clients are trying to be as creative as possible to balance the budget and make the deals work. We’re mostly providing construction financing on the debt side, and I’m hearing that construction costs are starting to plateau a bit, but I have not heard of them going down. A lot of the work right now is really finding ways to structure the deal to make the capital stack balance so that it can close and move forward. A big part of that is getting the right subsidies in place early in the process.
TCA: Aside from your affordable housing activities, you’ve become an important mentor for young professionals. How did this become a passion for you and what impact is it having?
MB: I mentor both men and women, inside and outside of BofA. There are two programs at the bank that I am actively involved with. One is called LEAD, which stands for Leadership, Education, Advocacy and Development. I’m the co-executive sponsor in Rhode Island. Anyone can join. It offers practical guidance on work-life integration and well-being programs that promote good physical and mental health so that people can continue to do great work in a sustainable way. LEAD also provides great leadership experience by giving members the opportunity to take on the responsibility for managing sessions, programs and events, and identifying and bringing in guest speakers. It prepares them for bigger roles because they’re responsible for organizing events for a larger group (LEAD RI has 714 members), and they can work with people from all over the bank and across different business lines. The other program is called Power of 10. It was started ten years ago by the head of commercial banking. She gathered ten women from the bank whom she wanted to sponsor and mentor. We attended meetings on a broad array of topics, very organic, things like executive presence, eating well, wellness training, exercising, life improvement, time management, you name it. She then asked us to all create our own Power of 10. So overnight ten became 100, which was amazing. As one of the original ten, I have the opportunity to sit on the bank-wide Operating Committee. Now we have hundreds of groups, throughout the bank and all over the world. The groups meet monthly and pick their own topics. The goal is to help people grow and develop, connect with others in a meaningful way and give members more tools for their toolbox.
TCA: Is there a curriculum for the LEAD program, or is it self-driven?
MB: As one of the bank’s 11 employee networks, there is a national LEAD organization within the bank that shares programs with local entities, such as the one I serve as the co-executive sponsor for in Rhode Island. We leverage national programs, but then we’ll also create our own local programs based on members’ interests. For Women’s History Month, we hosted an in-person event with a wide array of guest speakers and panels to share ideas and best practices around this year’s theme, Resiliency.
TCA: What goals do you have for CDB over the next 12 to 24 months?
MB: There’s such a tremendous need for more affordable housing, as we all know. BofA will continue looking for ways to create more units, through partnerships, like the one we have with Enterprise to create more middle-income housing and our BIPOC initiative. We will also continue to invest in LIHTC, HTC and NMTC, which play a critical role in transforming communities. We’re focused on delivering our proprietary financial education platform, Better Money Habits, to residents in the developments we finance. These are educational financial planning and management programs created by the bank that our teammates go out and deliver to residents that can put them on a path to success.
