DRIFund provides direct financing to those most in need through its affordable housing initiatives in low and moderate income areas.
Press Release (ePRNews.com) - FT. LAUDERDALE, Fla. - Jul 27, 2017 - DRI is certified by the US Department of Treasury as a Community Development Financial Institution (“CDFI”). To earn CDFI certification, DRI Fund provides direct financing to those most in need through its affordable housing initiatives in low and moderate income areas.
CDFIs are mission-driven financial institutions that are dedicated to providing financial services to meet the needs of economically disadvantaged individuals within underserved communities. CDFIs invest in local communities and the residents who live there by providing critically needed financing often unavailable from mainstream financial institutions.
One example of this loan origination program is DTW Realty Group LLC, a small minority owned developer and property management firm who lost its financial partner after procuring 10 properties for rehab. Due to aggressive rehabilitation requirements from the public entity seller, DTW risked losing their entire investment. Although the management team had extensive experience, its recent formation and the project location made traditional financing options impractical.
“It had historically been challenging in the City of Detroit. DRI stepped in at a time when there were a lot of skeptical capital resources…It (the project) worked out for all parties, for ourselves, DRI Fund, the occupant, the customer as well as the resale side. It turned out to be a win-win all together,” says Aaron Smith, DTW Realty Group.
DRI interviewed management to understand their business model, their minimum cash need and identified weaknesses in their exit strategy. After the assessment, DRI structured a plan to streamline their business process, identified a faster lower cost mechanism for title insurance and lowered their cash consumption by arranging terms with legal & title resources that deferred payment until close. Finally, DRI matched the local DTW with an international real estate broker that allowed him a safe exit strategy: the sale completed properties at high margins, while retaining property management income.
In addition to innovative financing, DRI offers development services to borrowers by providing intensive financial education counselling, debt management planning, business plan development and strategies for reducing monthly homeownership costs.
DRI is an investment manager that is also certified by the US Department of Treasury as a Community Development Financial Institution (“CDFI”). DRI was initially formed in 2011 to manage a project sponsored by HUD’s Neighborhood Stabilization Program. The project involved the creation of affordable housing in Detroit through the rehabilitating and sale of twenty-seven vacant homes in the area. Through this program, DRI realized that many of the communities they invested in were lacking access to loans from banks and other traditional sources of credit. DRI saw an opportunity to become certified as a CDFI and provide homeownership opportunities to people who were creditworthy, but didn’t meet all the requirements that most lenders needed to originate a loan.
From there sparked several other initiatives designed to address financing issues facing underserved communities today such as DRI’s non-performing mortgage acquisition initiative. This program is designed to preserve homeownership opportunities and stabilize distressed communities through innovative loan modifications and other option that create positive community outcomes. The people and communities that DRI invests in are at the heart of its business model and all management decisions take into consideration a double bottom line approach to business.
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