Late Stage Pre-Development Loans

Overview

Detroit Development will make Investments/Loans for predevelopment or preconstruction 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 predevelopment (i.e., concept development expenses, permit expenses, infrastructure needs, etc.) and the point where a project can qualify for construction financing. Detroit Development will make predevelopment loans available to both for-profit and non-profit developers who have a track record and capacity, but the lack of cash to move the project forward and/or the balance sheet strength to leverage additional financing.

Criteria, Loan Size and Terms

TO QUALIFY FOR A PRE-DEVELOPMENT LOAN, THE PROJECT SHOULD MEET ONE OR MORE OF THE FOLLOWING CRITERIA:

  • Project located in or adjacent to Detroit neighborhoods that are predominantly lower-income
  • Create for-sale or rental housing that is affordable to low/moderate income households in Detroit
  • Create homeownership opportunities for lower/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 lower income Detroit neighborhoods
  • Otherwise economically or socially strengthen predominantly lower-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

PRE-DEVELOPMENT LOAN PROCEEDS ARE NOT LIMITED TO, BUT IN GENERAL, CAN BE USED FOR THE FOLLOWING:

  • Land acquisition
  • Architectural drawings
  • Environmental remediation
  • Purchase of materials prior to construction
  • Advance pre-sale marketing efforts