FILLING A MARKET NEED
Despite the headlines touting a rental comeback, many neighborhoods continue to struggle with distressed buildings, low values, and a stubborn need for affordable rental. Yet investors have had a hard time finding financing to redevelop groups of these buildings – a gap preventing more expansive neighborhood revitalization. This CIC program will help these neighborhoods by financing loans for 1-4 unit buildings in distress, and transforming eyesores into affordable rental housing.
CIC President and CEO Jack Markowski has said, “In areas with no demand from owner-occupants, 1-4 unit buildings continue to deteriorate, dragging entire blocks down with them. This program will get groups of buildings fixed up and occupied – which will revitalize neighborhoods and add to the affordable rental stock.”
The program provides a take-out term loan for groups (9-unit minimum) of formerly distressed 1-4 unit buildings already purchased and rehabbed by investors to complement public and private redevelopment efforts in low- and moderate-income communities. To maximize neighborhood impact and to facilitate property management most of the properties should be located in a neighborhood cluster consisting of 32 blocks (approximately 0.25 square mile) in Cook, McHenry, Lake, DuPage, Will, or Kane Counties, and there is an additional requirement that the community already features investment in the form of local institutions, mass transit, neighborhood organizations, or other such concrete commitments.
For a full fact sheet and terms, go here. Then, contact a CIC Loan Officer for more details.
THE BACKSTORY: The Preservation Compact, a diverse policy collaborative housed out of CIC to keep rental housing affordable and in good condition, delved into the dynamics of 1-4 unit buildings suffering during the economic downturn. The findings were surprising: these buildings comprise a whopping 48% of the rental stock in Chicago alone, and areas with concentrations of these buildings were hit disproportionately hard by the crash. This program is a response to that market situation.
Investors providing lending or reserve capital for this new program include PNC Bank, Northern Trust, BMO Harris, Urban Partnership Bank, First Savings Bank of Hegewisch, Leaders Bank, First Eagle Bank, and four Wintrust banks (Northbrook Bank, Lake Forest Bank, Village Bank and North Shore Community Bank). The Illinois Attorney General’s Office provided a two-million dollar grant, and the MacArthur Foundation provided a program-related investment.