How to Start a Nonprofit and Secure Millions in Grants for Affordable Housing with Sherri Sengsouvanna

Introduction: Why This Episode Matters

If you’ve ever wondered how nonprofits can change the game in affordable housing, this conversation will give you the blueprint. On the Affordable Housing & Real Estate Investing Podcast, Kent Fai He sat down with Sherri Sengsouvanna, a nonprofit founder and veteran housing developer, who secured a $2.4 million grant to create quality affordable housing.

Sherri’s story is powerful because it proves that you don’t need to be a giant developer or a billionaire-backed foundation to make a real impact. By forming a nonprofit, learning how to access grants, and building partnerships, everyday investors and advocates can create sustainable housing solutions.

Kent Fai He, affordable housing developer and host of the Affordable Housing & Real Estate Investing Podcast, brings Sherri’s wisdom to the forefront so investors, developers, and advocates can see what’s truly possible when mission meets strategy.

What Are the Benefits of Forming a Nonprofit for Affordable Housing?

Many people think nonprofits can’t “make money.” Sherri makes it clear that’s a myth. Nonprofits can cashflow from real estate while also gaining unique tax and funding advantages.

• Community Development Organizations (CHDOs) get special preference under state housing finance tax credit programs.
  
  

• With three low-income board members out of five, you can qualify for up to a 50% property tax abatement.
  
  

• In Sherri’s case, working with the right attorney helped her nonprofit secure a 100% property tax exemption, saving $25,000 a year that could be reinvested into housing.
  

For anyone running thin margins in affordable housing projects, these benefits can turn a borderline deal into a profitable and sustainable one.

How Can You Start a Nonprofit for Real Estate Development?

Starting a nonprofit may sound intimidating, but Sherri explains that it’s accessible for everyday people:

• File through your state and the IRS. If your nonprofit expects less than $50,000 annual cashflow for the first three years, you may qualify for the EZ form.
  
  

• Attorneys who specialize in nonprofits can help, though Sherri points out it isn’t rocket science—she even had her first attorney waive fees after hearing her story.
  
  

• The key is having a clear mission. For housing nonprofits, serving families under 80% of Area Median Income (AMI) typically qualifies you for nonprofit status.
  
  

As Sherri says: “Anybody with a couple hundred dollars can file a nonprofit. But sustaining it takes knowledge, experience, and support.”

How Do Nonprofits Access Millions in Housing Grants?

Sherri’s breakthrough came after Hurricane Harvey, when she applied for Community Development Block Grant Disaster Recovery (CDBG-DR) funds. Her nonprofit was awarded $2.4 million to build 13 affordable homes.

Her step-by-step advice for others:

1. Follow the money – Sign up for state housing agency newsletters, funding notices (NOFAs), and HUD alerts.
   
   

2. Partner with builders – Approach subdivision developers before funding arrives and secure agreements to purchase homes if your grant is approved.
   
   

3. Prepare for financing gaps – Many grants are reimbursement-based, so you may need a lender to cover costs until funds are released. Sherri turned to a hard-money lender for short-term financing when banks wouldn’t take the risk.
   
   

4. Tell your story – Funders want to know why your mission matters. Sherri emphasizes that “your story is your strongest resource”.
   
   

How Can Nonprofits Help Tenants Transition Into Homeownership?

One of the most inspiring parts of Sherri’s model is her “move in, move up, move out” system:

• Families start in affordable rentals.
  
  

• When they go “over income,” instead of being penalized, they’re given a path to rent-to-own homeownership.
  
  

• Nonprofit cashflow is reinvested into buying new homes, recycling opportunities for the next family.
  
  

This solves the common poverty trap where tenants fear better jobs because they might lose housing assistance.

Key Insights from Sherri Sengsouvanna

• Forming a nonprofit opens doors to funding that for-profits can’t easily access.
  
  

• CDBG disaster funds follow major storms—savvy developers can position themselves to provide housing where it’s most needed.
  
  

• Storytelling is a fundraising superpower—people give to causes they believe in.
  
  

• Nonprofits can and must generate cashflow to stay sustainable.
  
  

• Affordable housing should be indistinguishable from market housing—quality matters for dignity and community stability.
  
  

Memorable Quotes

“Anybody with a couple hundred dollars can file a nonprofit. But sustaining it takes knowledge, experience, and support.” – Sherri Sengsouvanna

“The best resource you have is your story. If you keep telling your story, the checks will come.” – Sherri Sengsouvanna

“I’m not trying to be the biggest developer, I’m just trying to be the best.” – Sherri Sengsouvanna

“Nonprofits need to cashflow to stay in business. It’s counterintuitive, but true.” – Sherri Sengsouvanna

Frequently Asked Questions

Do you need a nonprofit to get housing grants?
Not always. For-profits can apply to certain grants, but many programs prioritize or exclusively fund nonprofits, especially when serving vulnerable populations.

What kinds of grants are available for affordable housing?
Community Development Block Grants (CDBG), disaster recovery funds, tax credit allocations, and local/state housing trust funds are common sources.

Can nonprofits make money?
Yes. Nonprofits can generate rental cashflow, receive developer fees, and fund operations. The difference is that profits must support the mission rather than private shareholders.

How do I know if affordable housing is the right path for me?
Sherri advises volunteering at shelters, nonprofits, or housing groups to see if serving certain populations resonates with you before starting your own nonprofit.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments. His conversations with leaders like Sherri Sengsouvanna highlight actionable strategies for investors and advocates who want to create impact while building sustainable returns.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.