Lending

Predevelopment loans are short-term, usually the first dollars into a project, and often the most difficult type of financing to access because they cover expenses accrued even before construction begins. Such soft costs include land or building acquisition, site stabilization, interim maintenance, environmental surveys, appraisals, taxes, insurance coverage, as well as legal, architectural and consultant fees. With this type of loan, CDF must have confidence that the project will move forward and the loan will be repaid.

A construction loan is a short-term loan used to build or rehabilitate a building. Construction loans are interest-only with a typical duration of 12 months.

A permanent mortgage loan is used when a construction loan rolls over into a permanent mortgage and includes a longer term and amortization schedule.

We are proud to assist nonprofit organizations with lending products that help the organization pursue capital projects or bridge capital campaigns.

CDF has a long history of financing affordable housing development, from new construction to rehabilitation projects and both single-family and multi-family developments.

We support small, minority- and women-owned general contractors as well as nonprofit developers with short-term financing for capital projects, facility improvements, equipment purchases, and program expansion. This type of flexible, affordable financing is not available from traditional lenders.

Cincinnati Development Fund has a keen interest in financing projects that include energy efficiency features, healthy foods, historic preservation, and storefront activation. If your project includes any of these focus areas, be sure to mention it to one of our loan officers.

We would love to hear about your project! Set up a time to talk with one of our loan officers so we can learn about you and your plans and so we can share information about Cincinnati Development Fund and how we work. You may also complete our Loan Inquiry Form.

You are encouraged to complete an application (predevelopment or construction/permanent). Please send accompanying materials like project plans, development budget, operating proforma (if applicable), personal financial statement, global financial statement, and other items included on our checklist.

With the information you submit, our lending team will begin to underwrite the project. Using our standard underwriting guidelines, we will seek to understand the project’s sources and uses, operating costs, rent revenues, management plans, the development team, the borrower’s experience, the collateral, and the financial strength of the project and the borrower. We will also schedule a site visit to see the property.

During this period, our loan officers may require more information or engage in discussions about the project feasibility, possibly making changes to the budget or project assumptions.

At this stage, the lending team sends a recommendation to our Loan Committee for their review. They will either accept or reject the recommendation or will require additional information before making a final decision.

Once the loan has been approved, loan closing documents will be prepared by our attorneys. You will receive various documents to review. Once the agreements are acceptable to all parties, the loan can be closed.

The loan closing will typically take place at a title company, law office, or CDF’s office. The borrower may be required to bring funds to the closing or wire funds in advance.

Once the loan closes, we will work together throughout the life of the loan. We will oversee construction loans with monthly walkthroughs and through our draw process. For permanent loans, we will require asset management reports and annual walkthroughs.