Connecting Developers of Color To Capital
In an effort to support a more diverse pool of local real estate developers, Capital Impact Partners has launched a loan product to support developers of color across the country to develop projects in and with their local communities.
The Diversity in Development loan product expands Capital Impact’s long-time commitment to equitable development and inclusive growth by deploying low-cost and flexible financing to support acquisition and predevelopment expenses.
It is our goal to clear pathways to success for developers of color who face barriers to entering the real estate industry due to a lack of capital, equity, and experience as a result of structural racism and disinvestment over the course of generations. In doing so, we can help ensure that developers are more representative of and responsive to residents of color nationwide.
Key features of the Diversity in Development Loan Fund:
- Flexible Loan Range from $500K to $10 million
- Below market interest rates Applicable Treasury rate plus 500 basis points
- Loan to Value
- Predevelopment: up to 90% LTC
- Acquisition: up to 100% LTV
- Predevelopment + acquisition: up to 125% LTV
- Low equity requirement set at 5% minimum
- Variety of Uses ranging from predevelopment to acquisition
*Note: Final terms and ranges will be based on a number of factors including project size and location.
Advantages of borrowing through Capital Impact Partners:
- Since 1982, we have partnered with communities to invest more than $2.5 billion into local projects including multifamily affordable and workforce housing, health care facilities, healthy food businesses, and education facilities.
- Through our Equitable Development Initiative, our Housing Equity Accelerator Fellowship, and our Growing Diverse Housing Developers program, we have provided training and mentorship to more than 240 developers of color across the country, providing us with insight into how to best support their community-focused projects.
- With offices in key metropolitan areas across the country, we are familiar with local market conditions and deepened our commitment to fostering an environment to advance community-led solutions.
- As a mission-driven organization, we are committed to supporting projects that create social and economic justice.
As a developer of color focused on nontraditional projects that create unique opportunities to expand affordable housing, it can be a challenge to secure capital. Capital Impact's Diversity in Development DMV Loan Fund fills a necessary gap in the marketplace by focusing on mission-based projects that support community needs while also ensuring they can be built in a cost-effective manner.
Durrani Development Corporation
Capital Impact has been very proactive and diligent about their organization’s racial equity journey and what that means for the products they are developing and the people they are serving. They are mission-aligned with us, and that is another reason I encourage other Black developers to work with Capital Impact.
FINANCING BLACK DEVELOPERS THAT SUPPORT D.C. NEIGHBORHOODS
After graduation from our Equitable Development Initiative, Thomas Houston and Talayah Jackson had a vision to transform a vacant lot in Washington, D.C.’s Ward 7 into a 17,000 sq. ft. building with affordable housing, a locally-owned grocery store, and office space for local entrepreneurs. Their nonprofit organization, Medici Road, just needed the right financing partner. Through our Diversity in Development loan product, we were able to provide a nearly $1 million loan to jumpstart the project and bring important services to this D.C. neighborhood.
Creating Impact Through Local Projects
As we foster equitable access and opportunity, these projects exemplify how we are financing projects led by developers of color:
4726 Sheriff Rd NE | Washington, D.C.
- Led by two Equitable Development Initiative graduates – Thomas Houston and Talayah Jackson.
- Capital Impact provided a nearly $1 million loan to support Mr. Houston’s nonprofit community development corporation, Medici Road, with the acquisition of a vacant lot to be developed into a 17,000-square-foot building with affordable housing, retail, and office space.
- The 12 condo units are anticipated to house 54 residents and will be for sale at prices affordable to D.C. residents earning 80% MFI.
- The ground floor co-working space will support local entrepreneurs and a locally owned and operated grocery store – the farthest east true grocery store in D.C.
Alabama Ave Apartments | Washington, D.C.
- Capital Impact provided a $2.475 million acquisition loan and a $900,000 predevelopment loan for this project, which will transform under-developed lots into a three-story affordable housing community.
- The project is led by Durrani Development Corporation, whose principal, Mustafa Durrani, has lived and worked in the D.C. area since arriving in the United States as a political refugee at the age of 3.
- The development includes 32 one-bedroom units, 28 two-bedroom units, and 26 three-bedroom units.
- Eighteen of the family-sized units will serve as Permanent Supportive Housing for residents earning 30% MFI. Of the remaining units, 9 will serve residents earning 60% MFI and 59 will serve residents earning 50% MFI.
STORIES OF IMPACT
In an effort to better ensure that real estate developers of color in Detroit are able to participate in the city’s revitalization in a way that reflects the city’s diversity, we launched the Equitable Development Initiative.
Housing Equity Accelerator
Our HEAF program facilitates new opportunities for real estate developers of color while also increasing affordable and workforce housing across the Washington metropolitan area, in partnership with Amazon.
Even as developers of color work to scale their businesses, they still face barriers to success. Our GDHD program helps development firms led by experienced developers of color to grow their capacity and expand their affordable housing production into the future.