Capital Impact Partners has announced the launch of a $20 million loan fund and grant program aimed at supporting developers in the Washington, D.C., metro area who face barriers to entering the real estate industry due to lack of capital, equity, and experience as a result of structural racism and disinvestment.

The Diversity in Development – DMV Loan Fund will provide low-cost, flexible pre-development and acquisition loans, unlocking critical early-stage financing that is often denied to developers of color or only available through hard money or predatory lenders. Preference will be given to participants and graduates of Capital Impact's Equitable Development Initiative, a program launched in 2017 that provides training, mentorship, and access to financing to minority developers. To qualify for a loan, at least 20 percent of a prospective project's housing units must be made affordable for households earning 80 percent or less of the area's medium family income (MFI).

In addition, EDI graduates are eligible to apply for up to $100,000 in grants to help cover equity requirements. Developers who prioritize greater housing affordability by reserving at least 20 percent of their project's units for families or individuals earning 60 percent of MFI or below may also be eligible.

The first two projects supported by the fund are EDI graduates Thomas Houston and Talayah Jackson, whose nonprofit community development corporation, Medici Road, received a loan of nearly $1 million to acquire a vacant lot in Washington, D.C.'s Ward 7 and develop a 17,000-square-foot building with affordable housing, retail, and office space; and Mustafa Durrani's Durrani Development Corporation, which was awarded a $2.475 million acquisition loan and a $900,000 pre-development loan to transform underdeveloped lots in Ward 8 into an affordable housing community.

"For too long, there has not been a level playing field for emerging developers of color trying to enter the real estate market," said Ellis Carr, president and CEO of Capital Impact Partners and CEO of CDC Small Business Finance. "As a result, many communities are not being appropriately represented when it comes to shaping the future of their city. By listening to their needs and tailoring a loan product for them, we hope we can amplify their vision."

(Photo credit: Capital Impact Partners)