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Construction Loans

Pre-Construction Loans

Pre-Construction Loans

OVERVIEW

Detroit Development anticipates the most borrowers will be small- to medium-sized developers, rehabbers, and contractors. We will also consider projects being developed by non-profit developers, including community development corporations and faith-based institutions with proven track records. Detroit Development will make Construction Loans into real estate development projects that can yield positive social impact in low- and moderate-income Detroit neighborhoods.

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CRITERIA, LOAN SIZE, AND TERMS

To qualify for a Pre-Construction Loan, projects should meet one or more of the following criteria:

Project is located in or adjacent to Detroit neighborhoods that are lower income

Create for-sale or rental housing that is affordable to low/moderate-income households in Detroit

Create homeownership opportunities for low/moderate-income households in Detroit

Create jobs for lower income Detroit residents

Strengthen access to community services for lower income Detroit residents

Strengthen commercial districts in predominantly low- to moderate-income Detroit neighborhoods

Otherwise economically or socially strengthen predominantly low- to moderate-income Detroit neighborhoods

Construction loan amounts range from $50,000 to $200,000

Terms lengths are generally 6 to 24 months

USE OF PROCEEDS

Pre-Construction Loans may be used for the following:

Infrastructure improvements

Construction of models

Façade improvements

Late-Stage Pre-Development Loans

Late-Stage Pre-Development Loans

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OVERVIEW

Detroit Development will make investments/loans for pre-development or pre-construction purposes in affordable housing projects, multi-family rehab, and other projects including commercial developments that stimulate neighborhood revitalization. These loans are intended to fill the gap between early "soft" stages of pre-development (i.e., concept development expenses, permit expenses, infrastructure needs, etc.) and the point at which a project can qualify for construction financing. Detroit Development will make pre-development loans available to both for-profit and non-profit developers who have a track record and capacity, but lack of funds to proceed with the project and/or the balance sheet strength to leverage additional funding.

CRITERIA, LOAN SIZE, AND TERMS

To qualify for a Late-Stage Pre-Development Loan, projects should meet one or more of the following criteria:

Project is located in or adjacent to Detroit neighborhoods that are predominantly low-income

Create for-sale or rental housing that is affordable to low/moderate-income households in Detroit

Create homeownership opportunities for low/moderate-income households in Detroit

Create jobs for low-income Detroit residents

Strengthen access to community services for low-income Detroit residents

Strengthen commercial districts in predominantly low-income Detroit neighborhoods

Otherwise economically or socially strengthen predominantly low-income Detroit neighborhoods

Loan amounts usually range from $50,000 to $200,000

Loans will generally have repayment terms of 12 to 48 months

Loans may be written with interest-only features for a portion of the loan term

USE OF PROCEEDS

Late-Stage Pre-Development Loans may be used for the following:

Land acquisition

Architectural drawings

Environmental remediation

Purchase of materials prior to construction

Advance pre-sale marketing efforts

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