The community development financial institution, or CDFI, has been supporting housing affordability in the US for more than 45 years. Its Cleveland-based group has originated the first two loans from a fund designed to build affordable housing in the city and give renters a chance to buy the homes they live in.
The Cleveland Housing Investment Fund provided a $2 million loan to CHN Housing Partners for its Parkside Homes single-family home development in East Cleveland, a predominantly Black neighborhood with one of the lowest median family income levels in the US. The $22.2 million development is being built on vacant lots.
CHN plans to give the property’s renters the option to buy their homes outright when its 15-year Low Income Housing Tax Credit compliance period expires. “Fifty-five families will move into brand new, high-quality homes in the coming months and begin their homeownership journey,” said CHN’s Kevin Nowak.
Housing crisis
The Cleveland Housing Investment Fund, or CHIF, was launched in March to improve affordable housing access in a city with some of the sharpest rent increases in the US. It provides loans as well as equity-like financing of $1 million and $5 million for small- and mid-sized affordable housing developments that struggle to find financing.
LISC is aiming to create up to 3,000 new rental units for individuals and families earning less than 80% of Cleveland’s Area Median Income. LISC wants renters to have the opportunity to buy at least 100 of those units.
Senior housing
CHIF’s second deal is a $2 million construction loan for Volker Development’s Walton Apartments complex in Clark-Fulton, a majority-Latino neighborhood in West Cleveland. The 52-unit complex is for renters aged 55 and over.
Between the two projects, “we’re adding more than 100 homes and demonstrating how flexible capital can close financing gaps, remove barriers to opportunity, and accelerate housing solutions neighborhood by neighborhood,” said LISC Cleveland’s Kandis Williams.
CHIF is deploying the $38 million it has raised from the Cleveland city government and KeyBank toward its fundraising goal of $100 million.
Regional capital
Separately, Mission Driven Bank Fund, armed with $170 million from banks and corporations to help close the racial wealth gap, has made its 11th investment in Ohio’s Warsaw Federal Savings and Loan. The mutual bank is one of just two minority depository institutions in Cincinnati.
Warsaw Federal will use the investment to provide financial services, tools and education to local businesses and individuals in the greater Cincinnati area. “Our doors are open to everyone,” said Robbie Suggs, the bank’s president and CEO.
Mission Driven Bank Fund, managed by Black-led asset management firm Elizabeth Park Capital Management and impact investor Calvert Impact, has a pipeline of 300 mission-driven MDI and CDFI banks the managers believe could make a dent in the racial wealth gap by expanding the financial capacity of local banks to finance homeowners and small businesses (see, “How the Mission Driven Bank Fund is tackling wealth inequalities in US communities”).
