Opportunity Investment Fund Supported by Mayor Emanuel

On June 21, 2018, Mayor Rahm Emanuel announced the City of Chicago’s participation in the Opportunity Investment Fund (OIF), a streamlined model developed in partnership with Community Investment Corporation and The Preservation Compact to encourage the creation and preservation of affordable rental units in strong markets.

Over the past two years, The Preservation Compact and CIC, in partnership with the City of Chicago and other government and private lender partners, have developed the new fund and loan product to create and preserve affordable units in strong housing markets. Initially supported by the JPMorgan Chase Foundation through pilot program funding, the OIF provides low cost mezzanine debt for acquisition in strong markets and an alternative to heavily subsidized financing structures.

Studies have shown that where a person lives plays a major role in the person’s health, economic well-being, and overall quality of life. The OIF will create more opportunities and choices for low and moderate income families looking to move into stronger markets in the Chicago region.

As reported by WBEZ, the fund will provide low-cost mezzanine debt to developers who purchase existing, functioning rental buildings in strong markets. In exchange, the developer must keep at least 20% of those units affordable for at least 15 years. CIC will serve as fund manager and program administrator.

The Preservation Compact has been working with the City, financial institutions, and community partners to develop the $30 million OIF over the last two years. The City of Chicago will provide a proposed $5 million of the total $30 million in private and other investments for the fund.

MB Financial has committed $4 million to the fund. CIBC Bank USA, BMO Harris Bank, Byline Bank and TCF Bank assisted in the development of the structure of the fund, and are considering investments in it. The Illinois Housing Development Authority is also considering committing resources to the fund and $3 million of support has been provided by the U.S. Department of Treasury’s Capital Magnet Fund.

For additional information, download the City of Chicago’s press releases from June 21 and June 26, and see coverage by WBEZ, Chicago Tribune, and Chicago Cityscape.

Developers interested in accessing OIF funds to purchase a multifamily property in a strong market can learn more about the program structure and current terms here.

As background, The Brookings Institution featured a blog by Stacie Young, Director of The Preservation Compact, explaining how the Opportunity Investment Fund is an example of an efficient approach to increase affordability in strong markets.