Capital Impact Partners Awarded $4.95 Million to Support Housing Developers of Color Through the CDFI Equitable Recovery Program
These funds will be used to provide loans, grants, and development services to developers of color who build rental housing in disinvested communities across the United States
APRIL 14, 2023 (Arlington, VA) – The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) has announced that Capital Impact Partners was awarded a $4.95 million grant through the CDFI Equitable Recovery Program.
The CDFI Equitable Recovery Program will strengthen the ability of CDFIs to ensure that low- and moderate-income communities continue to recover from the COVID-19 pandemic and invest in long-term prosperity. The CDFI Fund awarded $1.73 billion to 603 organizations nationwide.
“This award will help us address the decreased access to affordable housing for low-income families, a problem that has only been exacerbated by the COVID-19 pandemic,” said Raymond Guthrie, chief investment officer and head of capital deployment for Capital Impact Partners. “With these funds, we can expand our strategy of creating more affordable housing while also building up the capacity of local real estate developers of color.”
Helping Underrepresented Developers Grow Their Businesses
The award from the CDFI Equitable Recovery Program will be used to support developers of color with loans, grants, and development services.
A portion of the award will be utilized to provide grants, enabling developers of color to build equity and cover early-stage project costs such as predevelopment legal, architectural, and engineering fees; conducting feasibility studies; acquiring properties; and building a project balance sheet to attract debt. This type of funding, which strengthens projects, often is not offered by conventional lenders.
This award will also be leveraged with balance sheet capital to provide loans for acquisition, construction, and permanent financing.
Developers of color are often challenged while seeking financing from conventional lenders — who want to invest in developers with significant experience and often reject projects as higher-risk when located in disenfranchised neighborhoods with lower appraisal values, are smaller, generate less revenue streams, and fall outside traditional underwriting standards.
Developers who are unable to access traditional financing often turn to high-cost and extractive financing options to fill capital gaps, or they fail to bring their projects to fruition.
“While many traditional lenders are pausing capital deployment in this uncertain market, Capital Impact Partners is embracing the opportunity,” said Mindy Christensen, senior vice president, head of community lending for Capital Impact Partners. “We are proud to partner with developers by providing the integrated financial and non-financial capital needed to build up underestimated communities.”
Capital Impact Partners will utilize ERP funds to provide development services to support Equitable Development Initiative programming in Detroit; the Washington, D.C. Metropolitan Area; the San Francisco Bay Area; and Dallas — and to expand the initiative into new regions. The Equitable Development Initiative provides developers with training, mentorship, and potential access to capital.
About the Equitable Development Initiative
Capital Impact Partners launched the Equitable Development Initiative in Detroit in 2018 to help emerging developers of color grow their businesses in an industry where they are vastly underrepresented. For example, less than five percent of housing developers in the United States are people of color, and only one-third of housing developers in this country are women.
The initiative has since expanded into the Washington, D.C. Metropolitan Area; the San Francisco Bay Area; and Dallas. More than 200 developers of color have completed the program so far.
Many of these developers have since worked on mixed-use and residential projects in disinvested communities, creating more affordable housing and helping the local economy.
About Capital Impact Partners:
Capital Impact Partners is transforming how capital and investments flow into communities to provide people access to the capital and opportunities they deserve. We work to champion key issues of equity and social and economic justice by deploying mission-driven financing, capacity-building programs, and impact investing opportunities.
Capital Impact is part of the Momentus Capital branded family of organizations, including CDC Small Business Finance and Ventures Lending Technologies. Collectively, we offer a continuum of financial, knowledge, and social capital to help local leaders build inclusive and equitable communities and create generational wealth. This includes a comprehensive package of loan products, impact investment opportunities, training and business advising programs, and technology services that advance locally-led solutions.
A nonprofit Community Development Financial Institution, Capital Impact has disbursed more than $3 billion since 1982 to create access to critical social services, grow entrepreneurs, and create quality jobs. Capital Impact’s leadership in delivering financial and social impact has resulted in the organization being rated by S&P Global and Fitch, and recognized by Aeris for its performance.
Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local teams in Austin, TX, Dallas, TX, Detroit, MI, New York, NY, and Oakland, CA.
Learn more at capitalimpact.org or momentuscap.org.