CDFI Friendly South Bend

CDFI Friendly Affordable Housing Loan Fund

The need for affordable housing in South Bend is at an all-time high. Renovating vacant and/or dilapidated properties has long been a solution in many low-income neighborhoods, but developers in recent years have found it increasingly difficult to secure bank and other conventional financing for these projects due to an “appraisal gap.” This occurs when the expected appraisal value of a finished property is too low to secure the loan amount needed to rehab the property, leaving a gap in financing.

To combat this problem, CDFI Friendly South Bend has launched its Missing Equity program. Under this program, CDFI Friendly provides developers with the collateral necessary to close the gap in financing, allowing dilapidated properties to be rehabbed and returned to the affordable housing pool. Then, once a supported project is completed and the property is refinanced – typically after five years – the collateral is returned, enabling a continuous development cycle of much-needed affordable housing in the South Bend community.