Mezzanine Debt Fund
The Fund
Access low-cost mezzanine debt up to 90% loan-to-value! Purchasing in higher-cost neighborhoods is now possible.
The Mezzanine Debt Fund provides flexible, low-cost subordinate debt to developers who purchase existing, functioning rental buildings in higher-cost and emerging neighborhoods.
Depending on the project, the Fund can pair well with agency debt, or serve as bridge or gap financing. New construction or substantial rehab projects may also be eligible.
Loan fund borrowers may also qualify for a new property tax relief program!
Process and Terms
Borrowers secure a first mortgage from their chosen lender, covering up to 80% of a multifamily building’s value. The fund covers an additional 10% of a building’s value at favorable terms, cutting a borrower’s equity requirement in half.
| Rates | Rates are highly competitive: please contact us for a project-specific term sheet. |
| Term | 10 years |
| Amortization | Interest only |
| Payments | Must pay, interest only |
| Combined LTV | 90% |
| Prepayment | No penalty |
| First Mortgage Provider | Community Investment Corporation (CIC), a CIC partner lender with subordination agreement, or any outside bank of your choice willing to partner. |
| Affordability | 20% of units, but owners are not expected to artificially lower rents. Using existing subsidy programs, developers maintain cash flow through the same process and speed of traditional multifamily financing. We can help connect you with sources of subsidy. |
| Property Tax Relief | Fund affordability requirements may help borrowers may qualify for property tax relief under a new property tax incentive. Borrowers may be able to receive a 25% reduction in assessed value if they meet the other requirements of the incentive. |
Eligible Areas
The Fund finances projects throughout the Chicago Metro area, focused on areas that are higher cost, or where costs have been increasing.
Not sure if your project qualifies? Review the map below or reach out to Phillip Moore, CIC’s Managing Director of Lending at phillip.moore@cicchicago.com.
Please note: the map is simply a visual guide–CIC can finance projects outside of these areas on a case by case basis.