Despite their real estate know-how, community insights, and cultural competence, housing developers of color have faced unparalleled obstacles accessing capital due to decades of systemic racism in housing. To meet traditional lending standards, many developers have been forced to partner with larger or more established sponsors, which can siphon off developer fees and limit the possibilities for future growth. 

As a direct response to this systematic inequity, Enterprise launched Equitable Path Forward, a five-year, $3.5 billion initiative to build on our commitment to advance racial equity in the housing industry.

As part of this initiative, Enterprise Community Loan Fund – Enterprise’s CDFI – created more expansive underwriting guidelines for developers of color based on surveys and a review of previously denied requests. The guidelines were amended across Loan Fund’s product offerings to reflect risk mitigants currently unrecognized or undervalued in the underwriting process, as we continue to uncover and examine additional racial biases – such as appraisal bias – that have been baked into our lending processes.

Two examples of projects financed through EPF include:

• An $8.7 million loan to complete the construction of the Cunningham Apartments, a 37-unit multifamily development project that will serve formerly homeless veterans in Washington, D.C. Veterans are at a greater risk of homelessness than the civilian population, and often have complex support needs due to combat exposure, PTSD, and other adverse life experiences. The Cunningham Apartments project supports a Black-led mother and son development team with a strong track record of successfully owning and operating housing for veterans in the D.C. Metro area, providing housing for some of our nation’s most vulnerable populations.
• Our $2.5 million loan to the Second Chance Center to acquire a site for the new development of 128 affordable homes in Denver, with services targeted to formerly incarcerated persons and with 55 homes set aside for permanent supportive services. The borrower, a Black-led nonprofit developer, is building its pipeline of projects serving formally incarcerated persons who need services to be able to live successful and fulfilling lives after incarceration.

These examples are just a fraction of the overall investment Loan Fund has made in support of Enterprise’s EPF initiative. Since launching EPF, ECLF has invested $157 million with 45 developers of color, estimated to leverage $2.4 billion in support of the creation or preservation of 5,850 affordable homes and 315,000 square feet of community and commercial space. If successful, our approach to underwriting can serve as a blueprint for other lenders to revise their criteria to value community engagement and experience equitably, and not rely solely on entrenched financial benchmarks that perpetuate historic barriers to capital access.