Chicago Fills Big New Preservation Pool
- Jun 05, 2015
Today there’s an extra $200 million available for affordable housing financing in metropolitan Chicago, courtesy of Community Investment Corp. The multi-family rehabilitation lender recently completed the raising of a $200 million preservation pool that will provide loans for the acquisition and rehab of affordable rental housing in the Windy City area.
CIC knows its business; the Community Development Financial Institution reeled in investments from 37 financial local and national financial institutions for the pool. The lengthy list of participants includes The Northern Trust Co., BMO Harris Bank, PNC Bank, Fifth Third Bank, Wintrust Financial Corp., The Private Bank, Associated Bank, Citi Community Capital, MB Financial Bank and First Midwest Bank.
“Through investing in CIC, banks are able to expand their reach, and to pool their risks and returns to address needs that each bank is unable or unwilling to tackle alone,” Jack Markowski, President of CIC, told Commercial Property Executive. “CIC acts as a vehicle for banks to invest in small multi-family lending, reach communities they otherwise wouldn’t, and receive Community Reinvestment Act consideration for their participation. Investors understand that CIC has the specialized expertise, which is required to effectively finance the preservation of small multi-family properties.”
A part of CIC’s Multi-family Loan Program–which focuses primarily on privately owned rental housing–the new fund will cover quite a bit of ground. CIC calculates that the pool will assist in the preservation of a minimum of 7,500 affordable units, many of which are more than a century-old, for approximately 18,000 residents. Financing will be available for projects across Cook, McHenry, Lake, DuPage, Will and Kane Counties, in predominantly low- and moderate-income communities, where private multi-family lending has been on a severe downswing since 2005. CIC has been stepping in to help make up the difference for a long time.
“Over the years, with prudent lending, hands-on loan servicing, and careful management, CIC has kept loan delinquencies and loan losses to remarkably low levels. As a result, CIC has been able to continue its lending activities despite challenging economic conditions,” Markowski added. “Today, CIC stands as the leading provider of credit and other services to preserve affordable rental housing in low- and moderate-income communities throughout metropolitan Chicago.”
Affordable housing properties in Chicago that have benefited from CIC’s program include the 33-unit community at 6034 S. Prairie Ave.; the 18-unit building at 6158 S. Langley Ave.; and 6938 S. Cregier Ave. St., a property featuring 32 residences. In Cook County alone, the shortage of affordable rental units totals an estimated 176,000, according to research from DePaul University’s Institute for Housing Studies.