The Chicago-based Community Investment Corp. (CIC) recently announced a five-year $400 million loan fund to help resuscitate the area’s affordable housing market.
The nonprofit will fund the rehabilitation of 10,000 affordable rental units, primarily in low- and moderate-income areas of the region where credit is scarce.
“In many of the neighborhoods where we lend, we are the only game in town,” said CIC President Jack Markowski in a statement. “Direct credit from other institutions, whether they are large multinational banks or smaller community lenders, has been in short supply. But our history proves that lending in these communities has been and will continue to be good business.”
The revolving loan fund pools capital from 40 institutional investors, including Bank of America, JPMorgan Chase, Citibank, Northern Trust, and Harris Bank. The fund provides a lending stream to borrowers who rehab affordable housing in buildings with six or more units. Investors receive returns when the loans are repaid.
Since 1984, CIC has used this financing model to support the rehab of 42,000 affordable housing units. Yields for investors have averaged 6.8 percent over the last 20 years. Loans from the new funding pool will be designated for borrowers rehabilitating affordable multifamily rental housing in Cook, DuPage, Kane, Lake, McHenry, and Will counties.