A Brief Introduction to the Triangle Building & Housing Corporation
As A RESULT of the report of a special committee, the 1957 Convention authorized an immediate increase in the national active fee in order to begin building a loan fund from which Triangle chapters and colonies could borrow for the purpose of financing the purchase, construction and/ or remodeling of chapter houses. This action was subsequently approved by unanimous undergraduate and alumni organization vote.
The Building Loan Fund was created because it was felt that if the Fraternity were to improve its chapter houses and increase the number of chapters at a faster rate, a new and not heretofore proposed method of financial assistance must be developed. Experience indicated that no matter what its finances and borrowing power might be, a chapter could not finance a new house without assistance that at that time was nonexistent.
A study showed that though there might be interest by local school faculty and students in establishing a colony and a subsequent chapter at a particular school, invariably there were insufficient finances available to make the important step of providing a house and its furnishings. A colony results from the formation of a local fraternity or interest group with the pre-avowed intention of becoming affiliated with a particular national fraternity as soon as the local group meets the affiliation requirements of the national fraternity and the school administration.
Many different financing procedures were proposed, but the one finally established for Triangle was unique among fraternities and has since been studied and copied by other national fraternities, including some of the largest. It is unique because it permits the loan of large sums of money for the purchase of, construction of, or expansion of a Triangle house on the best security in the world — the word and integrity of Triangle men. In the case of colonies, funds also can be borrowed to purchase house furnishings.
It was decided that these loans would be analyzed, judged, and disbursed by a group of Triangle men experienced in business who are appointed by the Triangle National Council to serve terms of four years. It is the intention that there shall be continuity; thus, the members of this group serve for life or as long as they discharge their responsibility properly and so wish to serve. This group is called the Triangle Fraternity Building Loan Fund Board of Trustees, or more casually, the BLF. (Currently the term of a BLF Trustee is five years and there is no limit to the number of terms a Trustee may serve if reappointed by National Council.)
In July of 2014 Triangle National Council voted to let the Building and Loan Fund incorporate and become the Triangle Building and Housing Corporation.
It was reasoned that our chapters, at the time that construction is planned, would have sufficient funds in the chapter’s own building fund (supervised and controlled by the chapter corporation officers) to assure TBHC that the chapter will have adequate equity in whatever transaction is being considered. It was also reasoned that frequently these funds would be inadequate to complete the transaction. For example, there could be a situation where arrangements have been tentatively made and approved by TBHC for a normal mortgage loan through an acceptable commercial lending institution, but the chapter’s own building fund will provide only part of the down payment. It is the intent that TBHC will furnish the additional money needed for the down payment. Other examples might be a colony which has no money for furniture and equipment or a chapter with a house that needs extensive remodeling in the kitchen but all available funds are tied up in the mortgage. In each of these examples, it is seen that the chapter has certain equity in the transaction.
Initially the Building and Loan Fund/Triangle Building and Housing Corporation obtained funds for lending in several ways. A portion of the national active fee, paid by each member, was transferred to BLF monthly. Income from investments and interest on loans made to chapters also served as a source of funds. Debentures were also sold to members with interest and principal paid to the investor over 5 and 10 year periods. BLF also received funds from earnings of the Triangle Permanent Fund until that fund was dissolved and its assets turned over to the Education Foundation.
Currently Triangle Building and Housing Corporation receives no income from member fees. Income from investments and interest on loans to chapters provide the majority of funds for future chapter loans. Chapters are also encouraged to deposit excess income with the TBHC so that these funds can be used for chapter loans. Interest is paid on money deposited and the funds are readily available to the Chapter when the time comes for future housing purchases or renovations. Of course contributions to the Building and Housing Corp. are welcomed at any time.
Loans are always made to the chapter corporation, never to the active organization .Application for a loan or loan guarantee is made to TBHC by corporation officers on a form provided by the TBHC secretary- treasurer. This form gives the trustees practically all of the information required to judge the need and responsibility for the loan
In order to maximize the use of TBHC funds Chapters are encouraged to seek local financing for housing purchases and renovations. If necessary TBHC is able to provide a loan guarantee, agreeing to continue to make monthly payments to the local financial institution should the chapter be unable to make the agreed upon payments.
After a loan or loan guarantee has been approved by TBHC, a contract is made between TBHC and the chapter corporation. Currently loans for the purchase of chapter housing or for major renovations are made with a minimum interest rate of 7% and a maximum term of ten years. Loans for minor repairs and renovations or for emergency repair purposes generally require an interest rate greater than 7% and a term of three to five years. Loan terms may be adjusted by the trustees to satisfy special needs and conditions. Monthly payments are required and all payments are processed automatically via ACH withdrawals from the chapter bank account.