How to Work with Detroit LISC

Detroit LISC is committed to providing creative and flexible financial products that meet a variety of real estate development needs.  We work with groups to consult, problem solve, and assist with all types of financing opportunities:

  • Establishing the feasibility of a project at an early conceptual stage
  • Predevelopment funding to secure other critical funding commitments and to complete the work needed to start construction
  • Construction and permanent financing that cannot be met by conventional means

Detroit LISC provides loans, lines of credit, grants, recoverable grants, and equity investments to help community development organizations revitalize their neighborhoods.  Community projects typically include:

  • For-sale and rental housing
  • Community facilities (child care centers, schools, health care facilities, playing fields)
  • Economic development projects, including industrial, office, and retail buildings

The Following Products Are Available:

Technical and Financial Resources  

Grants

LISC provides technical and financial resources to help community development organizations become strong and stable neighborhood institutions characterized by effective and responsible fiscal management and capable of carrying out a range of community revitalization activities.  Detroit LISC provides grant funding to assist organizations in developing affordable housing and commercial and retail space, as well as other community development activities.  Grants are designed and provided to be consistent with the Detroit office strategies and local community development needs.

Project Feasibility and Predevelopment Activities

Recoverable Grants

Recoverable grants are forgivable loans at 0% interest.  They are used to cover specific predevelopment costs associated with a real estate development project, such as architectural work, surveys, environmental assessments, market studies, title work, and acquisition. Recoverable grants provide the high risk capital to move a project that has already demonstrated initial feasibility to the point of securing financing commitments and the start of construction.  Typical amounts of recoverable grant financing range from $25,000 to $100,000 and typical terms range from one to two years.  Repayment most often occurs at the point of closing on construction financing.

Predevelopment and Acquisition Loans

Predevelopment and acquisition loans are available for projects that are highly likely to proceed to construction.  Amounts available can be greater than the resources of a recoverable grant.  Financing can be provided for a term of one to two years and repayment is usually set to occur at the time of close on construction financing.  Collateral is required for acquisition loans.

Construction Financing

Construction Loans

Generally in conjunction with other lenders, LISC provides construction loans for projects. Construction loans are repaid at the time of sale or closing on the permanent loan.  Collateral is required for construction loans.

Working Capital Loans and Lines of Credit

LISC can provide short-term loans to bridge other sources of financing (which are generally committed) that the community development organization will receive over time to support its real estate development activity.

Guarantees

LISC issues a guaranty when it commits to responsibility for the repayment of another lender’s loan for a real estate project in the event of default by the borrower.  The size of the guaranty and terms are based on the structure of the financing for the project and an assessment of the risk that is appropriate to mitigate on behalf of the conventional lender.

Permanent Financing

Mini Permanent Loans

LISC has the ability to make loans with a term between two and seven years.  Almost always a LISC mini-perm loan begins as a construction loan that converts to a mini-perm loan when certain conditions are met at the time of completion of construction.  Collateral is required.

Equity and Intermediary Capital

Through the National Equity Fund (NEF), LISC provides equity investments for projects that support community revitalization across the country, including affordable housing, commercial and retail buildings, and arts and community space.

Low Income Housing Tax Credits

LISC can help a community development organization acquire the equity it needs for residential and mixed-use projects through the syndication of Low Income Housing Tax Credits (LIHTC).

New Markets Tax Credits

LISC can place equity or long term financing into commercial and mixed-use projects through an investment of New Markets Tax Credits (NMTC).