Supporting Investments that Preserve Affordable Housing and Prevent Displacement
Washington, D.C.’s Department of Housing and Community Development (DHCD) has selected Capital Impact to manage its DHCD Preservation Fund across the District.
Capital Impact is leveraging funding from DHCD to deploy at least $20 million in low-cost and flexible financing to private nonprofit and mission-driven for-profit developers that have multifamily housing projects in the District.
A unique aspect of the program is how it works to support the Tenant Opportunity to Purchase Act (TOPA). The Act gives residents of for-sale, multifamily, residential properties the right of first refusal to buy their properties, allowing them to work with mission-driven developers to purchase the buildings. This helps keeps rents affordable and prevents residents from being displaced in the face of rapid gentrification in mixed-income neighborhoods.
Capital Impact believes that mixed-use, mixed-income neighborhoods with easy access to employment and critical social services contribute to the vibrancy and economic growth of the city.
We are thus focusing our efforts on projects east of the Anacostia River as part of a larger strategy to create community stability. Preserving long-term affordability and avoiding displacement of residents and families is key in this area of the city that is increasingly a target for development.
Key features of the D.C. DHCD Preservation Fund:
- Eligible projects must have at least 5 units, be located entirely within the District of Columbia, and have at least 50% of the units reserved for households earning less than 80% of the median household income.
- Loan proceeds can be used for acquisition and pre-development costs, including third-party assessments, environmental remediation, and critical repairs.
- Preference will be given to projects that most meet Capital Impact Partners’ community impact standards.
- Developers must commit to maintain affordability for a minimum of 10 years.
- Loan amounts between $1 million and $10 million
- Interest rate not to exceed 5%
- Term of up to 4 years
- Up to 125% Loan-To-Value (LTV)
- Min 1.1x Debt Coverage Ratio (DCR)
Advantages of borrowing through Capital Impact Partners:
- Headquartered in Arlington, VA, we have invested more than $66 million in Washington, D.C., including: affordable housing, health care and education facilities.
- We have the ability to offer a variety of financing options from predevelopment through stabilization.
- As a mission-driven organization, we are committed to supporting projects that create social impact and drive social justice.
STORIES OF IMPACT
Developer Spotlight: Richard Hosey
When Richard Hosey returned to his hometown in 2008, the economic downtown had completely changed the city he remembered. Now the Detroit native has focused his efforts on returning the city to its former greatness.
Supporting D.C.’s Underinvested Neighborhoods
As a parent, Diana has a lot to manage among her three children. Fortunately, she discovered a unique opportunity to find a good school & health care in one place. Across Washington D.C., we are working to support projects that “co-locate” important services that are vital to healthy communities.
Filling the Gap for Washington D.C.’s Uninsured
Without health insurance, Michele Reynolds’ options for quality care were limited. But that all changed when Unity Health Care built a brand new facility in Washington, D.C.’s Ward 5.