Mayor Freddie O’Connell, alongside the Community Foundation of Middle Tennessee (CFMT), First Horizon, the Metro Housing Division, and other partners, has announced the launch of the Nashville Catalyst Fund. This initiative aims to create, preserve, and develop more affordable housing in Nashville.
The Nashville Catalyst Fund was established to provide quick and flexible capital to mission-driven developers, enabling them to navigate Nashville’s competitive real estate market effectively. The Fund will start with an initial $75 million—$20 million from Metro, a $50 million credit facility led by First Horizon, and $5 million from Vanderbilt University—with plans to raise an additional $25 million.
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Mayor Freddie O’Connell highlighted the potential of this public-private partnership to build upon existing affordable housing tools, projecting that it will help create and preserve at least 3,000 affordable housing units in Nashville over the next decade. The Fund aims to offer fast, flexible loans to assist affordable housing developers in preserving rental homes and increasing housing production.
The loans will target developers working on income-restricted housing for 30 years and beyond, as well as transitioning unregulated housing into income and rent regulations to benefit those most in need. Metro Housing Director Angie Hubbard emphasized that the Fund aligns with the Affordable Housing Task Force’s goal of creating 55,000 housing units by 2030.
Hal Cato, CEO of the Community Foundation of Middle Tennessee, expressed that solving Nashville’s affordable housing shortage requires a collaborative approach, and the Catalyst Fund represents a significant step in this direction.
Metro’s $20 million investment comes from American Rescue Plan Act (ARPA) funds. Following a competitive procurement process, Metro partnered with Forsyth Street Asset Management and the Community Foundation of Middle Tennessee to structure the Fund and attract investors.
The Fund is designed to offer loan products not available elsewhere in the market, including acquisition loans, pre-development loans, and bridge loans. These products are intended to support non-profit and emerging BIPOC developers within the affordable housing sector, enabling them to start projects without waiting for public subsidies or grants.
Carol Yochem, First Horizon Bank Region President, expressed pride in supporting the Catalyst Fund, emphasizing the importance of affordable housing for Nashville’s continued growth.
The Fund’s daily management will be overseen by Forsyth Street Asset Management, in collaboration with the Community Foundation of Middle Tennessee and Pillars Development, with additional support from Nelson Community Partners. An Investment Committee, led by Jim Gingrich, will govern lending decisions.
Vanderbilt University Chancellor Daniel Diermeier noted the university’s commitment to the community and the importance of providing innovative options for affordable housing in Nashville.
The initial $75 million investment is expected to facilitate the creation or preservation of over 3,000 units within the next decade. The sustainable nature of the Fund means that this initial investment could be recycled into over $300 million in investment over the next ten years. The Fund seeks an additional $25 million through ongoing fundraising efforts.
For more information about the Nashville Catalyst Fund or to apply for a loan, visit www.nashvillecatalyst.org.
About First Horizon
First Horizon Corp. (NYSE: FHN), with $81.8 billion in assets as of March 31, 2024, is a leading regional financial services company, dedicated to helping clients, communities, and associates unlock their full potential with capital and counsel. Headquartered in Memphis, TN, the banking subsidiary First Horizon Bank operates in 12 states across the southern U.S. The company and its subsidiaries offer a range of services including commercial, private banking, consumer, small business, wealth and trust management, retail brokerage, capital markets, fixed income, and mortgage banking. Recognized as one of the nation’s best employers by Fortune and Forbes magazines, more information is available at www.FirstHorizon.com.
About Vanderbilt University
Founded in 1873, Vanderbilt University is renowned globally for its transformative education and research. Located in Nashville, Tennessee, the university offers a collaborative culture that empowers future leaders. Vanderbilt University provides an immersive residential undergraduate experience and is home to nationally and internationally recognized graduate schools. More information about Vanderbilt University can be found on their website.
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