THE HELMS FUND

Questions and Answers Version 1 June 15, 2011 1. Question What is a CDFI (Community Development Financing Institution)? Answer CDFIs originated during the Clinton Administration to provide specialized community development lenders to serve the needs of communities that lacked access to capital. Almost 1,000 CDFIs have been formed since 1995. Some well known CDFIs include Shore Bank in Chicago, Enterprise Community Development Fund and LISC. 2. Question Will the Helms Fund be a resource for Goodwills experiencing financial stress? Answer No. The Helms Fund provides financing for financially stable Goodwills that need supplementary financing for mission and retail expansion. 3. Question Can my Goodwill get all its financing from the Helms Fund? Answer No. The Helms Fund provides supplementary financing to cover the portion of a project that will not be financed by local banks. 4. Question Will my Goodwill still have to contribute equity to capital projects? Answer Yes. On a case-by-case basis, the Helms Fund will require each Goodwill to invest capital in each of its projects. Generally this will be about 10% of the project cost (not the appraised value). 5. Question Why isnt the Helms Fund part of the Member Service Center? Answer The Helms Fund is organized as a Community Development Financing Institution (CDFI). The CDFI designation will help to maximize investments by banks and socially responsible investors. The US Treasury certifies CDFIs and their regulations require that each CDFI be an independent entity that is not controlled by any other entity. 6. Question Will the Helms Fund provide guarantees or cross guarantees for bank debt? Answer During the first 5 years, the Helms Fund probably will not provide any bank guarantees. As a young loan fund, providing those guarantees would require designation of capital to cover the guarantees and that would reduce the project funding that the Fund could provide. 7. Question Our Goodwill has successfully completed 2 bond financings for new

stores. Our bank has required a general pledge of corporate revenue and assets to secure those bonds. If we use the Helms Fund to finance a new store, how will we work this out with our bank? Answer Since this is a new program, we are entering a developmental phase of lending policy with major banks. Generally in housing finance this has been worked out in one of two ways. The first option would be to utilize the existing loan covenants regarding bank approval of additional debt. This would allow the new store to be recognized and financed in addition to the outstanding bonds, which would remain in place. The second option (probably not anyones favorite choice) would be to structure a new nonprofit operator similar to the 501c3s that operate HUD 811 projects. If that option were used, the Goodwill would lease and operate the store from the captive nonprofit. It is very likely that the banks that have been most active in providing Goodwill store financings will also be major investors in the Helms Fund through their foundations and community development corporations. Those banks get additional Community Reinvestment Credits for financings done through and with CDFIs so it is reasonable to expect that the banks would be willing and able to cooperate in approving additional debt. 8. Question 9.