Mission Finance in the Motor City

Brief

Mission Finance in the Motor City

Abstract

Mission-oriented lenders seek both financial and social returns. Mission lenders extend riskier loans to developers, offer flexible underwriting and loan features, use debt financing to leverage mainstream and private capital, facilitate the provision of grant and tax credit subsidies, and also provide technical assistance to developers. Together, direct mission investment and leveraged funds contributed 42 percent to total investment in commercial, industrial, multifamily, and institutional real estate in Detroit between 2013 and 2015.Among mission lenders, CDFIs played a particularly strong role, contributing 60 percent of mission funding between 2008 and 2015, and 14 percent of total lending during that timeframe.

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