Loans for the development of affordable housing

In many poor neighborhoods, single and multifamily residential buildings have decayed as a result of neglect by absentee landlords and the inability of local property owners to secure financing for home improvement. Development of affordable new or renovated housing can be the first step in community revitalization.
A number of CDFIs make low-income housing a priority. But the high cost of multi-unit housing projects often necessitates finding a bank partner who will put up most of the money. The role of the CDFI in this partnership is to take most of the risk by financing preliminary phases of development and giving the bank priority in recovering collateral in case of foreclosure. These loans are usually repaid with a combination of rental income and government subsidies.

Real stories

Dale Braithwaite, a resident of the south side of Chicago, rehabilitates and manages apartment buildings with financing from South Shore Bank.