After a year in which conversations of racial equity took center stage, including within the real estate and development realms, a Community Development Financial Institution (CFDI) is looking to bridge the gap in the DC region.
Today, Capital Impact Partners announced a $20 million loan fund targeted toward non-white developers in the DC area. The Diversity in Development DMV Loan Fund (DiD-DMV) will create a lower barrier to entry for developers of color by providing more accessible lending terms.
With loans of $500,000-$5 million, the funds could provide acquisition financing to developers at up to 100% loan-to-value (LTV); Capital Impact's typical lending terms are up to 90% LTV, and most non-CFDI lending institutions have LTVs up to 75%. The fund would also eschew what would usually be a higher interest rate, expand credit access, and for a period of up to five years, would usually require monthly payments of interest only.
To be eligible, the proposed development would need to deliver at least five housing units, at least 20% of which would have to be affordable to households earning up to 80% of median family income (MFI). Applicants for a DiD loan may also be awarded a grant of up to $100,000 if at least 20% of prospective units would be affordable to households earning up to 60% of MFI.
“For too long, there has not been a level playing field for emerging developers of color trying to enter the real estate market," Diane Borradaile, Chief Lending Officer at Capital Impact Partners, said. "As a result, too many communities are not being appropriately represented when it comes to shaping the future of their city."
Two developments have already been selected as the first beneficiaries from the Fund: a mixed-use development in Deanwood that is currently crowdfunding equity, and an affordable development on Alabama Avenue SE that received zoning approval in 2019.
This article originally published at https://dc.urbanturf.com/articles/blog/loan-fund-launches-for-dc-area-developers-of-color/18469.
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