Capital Impact Partners Launches $ 20 Million Diversity in Development Loan Fund and Grants Program in Washington, DC to Support Real Estate Developers of Color



“For too long there has not been a level playing field for emerging developers of color trying to enter the real estate market. As a result, many communities are not adequately represented when they do. is about shaping the future of their city. By listening to their needs and tailoring a loan product to them, we hope to be able to amplify their vision, “said Ellis Carr, President and CEO of Capital Impact Partners and CEO of CDC Small Business Finance.

The under-representation of black developers is blatant. NAIOP, the Commercial Real Estate Development Association, reported in a 2013 survey that only 4.4 percent of commercial real estate professionals were black. In August 2020, only 5 percent of Urban Land Institute members described themselves like black or african american.

Through the DiD-DMV Fund, Capital Impact will provide flexible, low-cost pre-development and acquisition loans, unlocking critical seed funding that is so often denied to developers of color or only available through hard money. or predatory lenders.

In addition to supporting developers of color, the Fund is designed to create social impact by supporting efforts to provide essential services to low-income communities and individuals. To be eligible for a loan, at least 20 percent of the housing units in a potential project must be affordable to households earning 80 percent or less of the average family income (MFI).

The DiD-DMV Fund builds on a similar initiative that Capital Impact launched in Detroit in 2020.

“This fund will allow developers of color to pursue projects that help revitalize their communities – creating affordable housing and community spaces that community members believe add value and benefit their neighborhoods,” said Diane Borradaile, Director of Loans at Capital Impact Partners. “The DiD-DMV fund will foster inclusive growth by ensuring that developers in the region better reflect the demographics of the communities in which they operate. Community-led projects further ensure that dignity and agency remain at the center of the development process.

In addition to Capital Impact’s equitable development initiative

The Fund complements the action of Capital Impact Equitable development initiative (EDI), a program that provides training, mentorship and increased access to capital to help developers of color advance their careers. The program launched for the first time in Detroit in 2017 and saw 86 participants. In 2019, Capital Impact extended EDI to the DC region where 51 developers worked under the program.

Access to capital through DiD-DMV Fund is not exclusive to EDI graduates, which means any local developer who identifies as a person of color and has a project that meets the Fund’s eligibility criteria can apply.

Borrowers who have participated in the EDI program can also apply for up to $ 100,000 in grants to help cover equity needs. Developers who prioritize higher housing affordability by reserving at least 20 percent of the units in their project for families or individuals earning 60 percent from MFIs or less may also be eligible for these grants.

Two first diversity projects in development-DMV funded

Capital Impact also announced the first two projects funded under the new DiD-DMV loan fund.

Sheriff Road Housing, Offices & Grocery | Ward 7

Capital Impact has worked with EDI graduates Thomas houston and Talayah Jackson to finance the acquisition of vacant land in the Deanwood neighborhood of Washington, DC Ward 7. Almost $ 1 million The loan will help their nonprofit community development company, Medici Road, develop a 17,000 square foot building with affordable housing, retail and office space.

“Capital Impact has been very proactive and diligent about their organization’s racial equity journey and what that means for the products they develop and the people they serve. They are aligned with our mission, and c ‘that’s another reason I encourage other black developers to work with Capital Impact, ”said Houston.

The 12 condo units are expected to house up to 54 residents and will be on sale at affordable prices to DC residents earning 80 percent of the MFI. Creating affordable housing is a critical path to intergenerational wealth creation and a way for longtime residents to stay in their rapidly gentrifying neighborhoods.

The ground floor of the building will feature coworking and office spaces for local entrepreneurs as well as what will be DC’s easternmost large-scale grocery store. The grocery store should be a franchise owned by and employing local residents. The project is expected to generate 55 construction jobs.

Alabama Avenue Apartments | Ward 8

Just south of the Sheriff Road project, Capital Impact supported an 86-unit new-build affordable housing project in the Randle Heights neighborhood of Ward 8 of DC.

This project is led by Durrani Development Corporation, the principal of which, Mustafa Durrani, Arrived in United States political refugee at the age of 3 and grew up in Northern virginia. After successfully running his own government contracting business, Mr. Durrani now pursues his passion for real estate development with an emphasis on affordability and green building. Mr Durrani is also opening several Spanish immersion daycares throughout the region, which will focus on bilingual English and Spanish lessons for children aged six weeks to six years.

“As a color developer focused on non-traditional projects that create unique affordable housing expansion opportunities, it can be difficult to secure capital. Diversity in Capital Impact Development – DMV Loan Fund fills a necessary gap in the market by focusing on the mission of projects that meet the needs of the community while ensuring that they can be built profitably, ”said Durrani.

Capital Impact offers a $ 2.475 million acquisition loan and another $ 900,000 pre-development loan for this project, which will transform underdeveloped lots that currently house a vacant building into a brand new affordable housing community. The proposed 87,085 square foot three story (plus cellar) project features a uniform mix of one, two and three bedroom units.

Eighteen of the family units will serve as permanent supportive housing for residents earning 30 percent from MFIs. Of the remaining units, 59 will serve residents earning 50% MFIs and 9 will serve residents earning 60% MFIs. With this tiered income approach, Mr. Durrani’s project aligns with Capital Impact’s philosophy of supporting inclusive growth that benefits residents at different income levels.

Diversity in Development – Key Terms of the DMV Loan Fund

the Diversity in Development – DMV Loan Fund terms include:

  • Loans $ 500,000 at $ 5 million
  • The loans will be mainly used for acquisition and pre-development
  • Loans can be used for housing and community facilities projects in the DC metro area
  • Housing projects must include at least 5 units with a minimum of 20 percent affordable units at 80 percent MFI or less
  • Up to 100% Loan-to-Value (LTV) for acquisition loans and up to 125% LTV when combining acquisition and pre-development financing
  • Senior real estate guarantees preferred, but subordinated loans will be considered
  • Minimum equity contribution of 5 percent
  • Loan term up to 5 years
  • Interest payments only in most cases
  • Interest rate equivalent to the applicable US Treasury rate plus 500 basis points with a floor of 5.5%
  • Equity grants available in certain cases

Capital Impact’s commitment to inclusive growth across DC

With its seat at Arlington, Virginia, Capital Impact has launched a number of local initiatives to promote more equitable access to essential services. This includes:

  • Provide capital and technical assistance to local entrepreneurs of color through the Color Entrepreneurs Fund.
  • In partnership with the Washington DC Ministry of Housing and Community Development (DHCD) to manage its DHCD Preservation Fund. Thanks to this effort, we are deploying more than $ 50 million in flexible, low-cost funding to mission-driven developers to prevent tenants from being relocated by preserving thousands of affordable housing units across the district through the Tenant’s Possibility to Buy Act (TOPA).
  • Expand the opportunity for people in local food businesses of color to engage in the robust food ecosystem and increase health equity through $ 1 million Nourish DC Fund.

To date, Capital Impact has invested more than $ 200 million through Washington Metropolitan area to support more than 100 projects providing affordable housing, health care, education and healthy food services.

For more information or to inquire about a loan from the Diversity Development Loan Fund – DMV, please visit our website or contact Seth Whetzel at [email protected].


Through capital and engagement, Capital Impact Partners helps people create communities of opportunity that break down barriers to success. Through mission-based funding, social innovation programs, capacity building and impact investing, we work to advocate for key issues of social and economic equity and justice. Our commitment to the community aims to ensure that individuals have access to quality health care and education, healthy food, affordable housing, cooperative development and the ability to age with dignity.

A non-profit community development financial institution, Capital Impact has disbursed more than $ 2.5 billion since 1982. Our leadership in financial and social impact has enabled Capital Impact to be rated by S&P Global and recognized by Aeris for our performance. Based at Arlington, Virginia, Capital Impact Partners operates nationwide, with local offices in Austin, Texas; Detroit, Michigan; New York, New York State; and Oakland, California. Learn more about

SOURCE Capital Impact Partners

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