The Real Estate Council Community Fund
Q: What is The Real Estate Council Community Fund?
A: The Community Fund is a Community Development Financial Institution (CDFI) that provides access to capital in the form of loans and technical assistance for real estate projects in low-income areas of Dallas and Collin Counties.
Q: Is it a part of The Real Estate Council Foundation?
A: The Community Fund is the next chapter of social venture investment for The Real Estate Council Foundation. It allows us to leverage existing funding sources and long-term relationships in the nonprofit sector while accessing funding sources that are focused on CDFIs.
Q: Who is in charge of the Community Fund?
A: The Community Fund is its own legal entity but falls under the governing structure of The Real Estate Council Foundation. It does have a separate Advisory Board and its own Governing Board, which include the following representatives from the community:
Lucy Billingsley, The Billingsley Company
Paige Flink, The Family Place
Thornton Hardie III, The Rees-Jones Foundation
Susan Hoff, United Way of Metropolitan Dallas
Richmond McCoy, UrbanAmerica Advisors, LLC
Gregory D. May, Orix Foundation
Victor Toledo, West Dallas Chamber of Commerce
Cynthia Yung, The Boone Family Foundation
CHAIRMAN Gilbert Gerst, Bank of Texas
Sue Fish, Financial and Business Consultant
Mattye Jones, Coats Rose
Yelda Tuz, Bank of America
Q: Who will contribute to the Community Fund?
A: We are seeking funding from foundations, corporations, financial institutions and individuals. We are also seeking certification and funding from the U.S. Department of Treasury CDFI Fund. To date we are thankful for the funding of the following donors:
Bank of America
The Meadows Foundation
Q: What are the goals of the Community Fund?
A: Our Community Fund’s goals align with the goals of The Real Estate Council Foundation and the U.S. Treasury’s CDFI Fund to:
- Promote economic development, develop businesses and create jobs
- Develop affordable housing and promote homeownership
- Provide community development financial services, financial literacy programs and alternatives to predatory lending
Q: What types of financial products will the Community Fund offer?
A: Loan products will include:
- Pre-development loans
- Subordinate debt
- Participation loans
- Gap/bridge financing
- Capital campaign bridge loans
- Construction loans for community facilities, childcare and healthcare facilities
- Revolving loans for microenterprise nonprofits
Q: Who will be the customers of The Fund?
A. Customers will include:
- Nonprofit developers of affordable housing
- Community service providers
- Charter schools
- Childcare providers
- Healthcare facilities
- Other nonprofit and for-profit developers who are developing in low to moderate income neighborhoods
Q: Will The Real Estate Council Foundation still be making grants to community initiatives?
A: Yes, the Community Fund is a new and exciting service we are offering that works together with our grants and our pro bono professional services programs to make our community a better place for all.
Q: What kinds of projects will the Community Fund finance?
A: Projects will include:
- Development and renovation of affordable housing both multifamily and single family
- Acquisition, development or renovation of commercial or mixed-use facilities
- Pre-development loans for housing or community facilities
- Bridge capital campaigns for facilities/charter schools
- Bridge loans for government funding sources
- Bridge tax increment funds
- Microenterprise revolving loan funds
Q: How does the Community Fund’s lender profile differ from that of traditional lenders?
A: Our loans will be inherently higher risk by conventional lending standards. Loans will be made when there’s a lack of collateral or insufficient collateral but also little repayment risk. We will make loans in areas that have an inability to access traditional loans due to lack of comparable projects such as in highly distressed neighborhoods, i.e. West Dallas, Southern Sector.
Q: Are these risky transactions?
A: While these loans are riskier by traditional lending standards, we mitigate that risk through our pro bono professional services. This hands-on involvement is a hallmark of The Real Estate Council Foundation. The highly successful program is in place and ongoing, so the Community Fund will provide additional volunteer opportunities for our members.
Q: Will you charge interest and fees for a loan through the Community Fund?
A: Yes, each loan will be customized in both term, repayment, interest rate and fees. The loan interest rates will be at the same rate as a conventional lender would charge, however, these types of loans do not have access to patient capital.
Q: What is the maximum term of loan that the Community Fund would offer?
A: Maximum term will be five years, but each loan will be customized to fit the particular repayment ability of the borrower.
Q: Will the loans require collateral?
A: In most cases, the Community Fund will require collateral, which will be determined by the type of loan request.
Q: Will you make mortgage loans for single-family homes?
A: No, we will not make long-term loans to direct purchasers but rather will make bridge loans to the developers of affordable housing.
Q: How can I get involved?
A: If you’re interested in volunteering your time for our pro bono professional services program or one of the Community Fund committees, or would like to apply for a loan from the Community Fund, contact Foundation Director Robin Minick.