$7.5M from PNC Bank to help create, preserve affordable housing through Detroit Housing for the Future Fund 

$7.5M from PNC Bank to help create, preserve affordable housing through Detroit Housing for the Future Fund 

  • The LISC-managed Detroit Housing for the Future Fund launched with $48M in September.
  • Part of Mayor’s commitment to build “One Detroit, for All of Us.”
  • The fund helps close financing gap for developers building new or preserving existing affordable housing units in the city. 

DETROIT – Mayor Mike Duggan and PNC Bank announced today the bank’s $7.5 million commitment to creating and preserving affordable housing across the city through a major investment in the Detroit Housing for the Future Fund (DHFF).  

Announced by the mayor last year, the DHFF represents the largest single private commitment to affordable housing in the city’s history. The purpose of the DHFF is to direct private capital to support affordable housing developments in need of gap financing. Since the fund’s launch seven months ago three DHFF projects representing $31 million in total development with a DHFF investment of $7.8 million already have been announced, despite COVID-related and seasonal construction shutdowns. 

So far, $48 million of the fund’s goal of $75 million has been raised.

“Development is happening in neighborhoods across the city, but it doesn’t mean much if the Detroiters who stuck with the city during the tough times can’t afford to stay and participate in its comeback,” said Mayor Duggan. “PNC Bank’s generous commitment helps ensure that all Detroiters, no matter their income, will have the opportunity to live in any neighborhood they choose.”

The Duggan administration has made affordable housing a top priority as it works to help Detroiters stay in their homes amid increasing rents. The administration set a goal of preserving 10,000 units of existing affordable housing and the development of 2,000 units of new affordable housing through multiple public and private housing initiatives including DHFF. As of today, more than 1,000 new affordable housing units have opened or are under construction in the city while nearly 7,000 existing affordable units either have had their affordable rents extended for another 15-30 years or are in the pipeline to have them extended.

“Providing critical capital to support the creation of affordable housing in Detroit reflects PNC’s long-term support of neighborhood revitalization, education, and economic development in the City,” said Ric DeVore, PNC regional president for Detroit and Southeast Michigan. 

How DHFF works

Developers, especially housing developers, often have difficulty finding capital to finance gaps in development or redevelopment costs. This DHFF helps fill that gap by providing access to capital and financial products specifically designed to address the challenges affordable housing developers face.

The DHFF helps to support the preservation of regulated and naturally occurring affordable housing (NOAH) units throughout the City to keep them affordable, as well as the development of new mixed-income and affordable housing in targeted multi-family housing areas. The DHFF primarily finances housing that is affordable to households at or below 60 percent of area median income (AMI) but will give priority to projects with lower incomes in order to direct the funds where the need is greatest. For example, 60% of AMI for an individual is $33,600, and $48,000 for a family of four.

$7.5M part of PNC’s larger commitment to Detroit

PNC Bank has a long history of lending, investing, and providing charitable support in Detroit. Some key projects over the past couple of years include:

  • Develop Detroit’s Sugar Hill mixed-use development in Midtown. PNC made a $10 million New Markets Tax Credit investment in addition to a $4 million loan. Fourteen of the 68 apartments are set aside for affordable housing, with a focus on housing veterans.
  • The Abington Apartments redevelopment in New Center. PNC provided $1.5 million in historic tax credit equity.
  • The Chroma Building redevelopment by The Platform in the Milwaukee-Junction neighborhood.  PNC used its Opportunity Zone Fund to offer $6.2 million in equity and approximately $4.7 million in debt financing.
  • PNC’s greatest investment in Detroit has been in early childhood education for the city’s children. Since 2010, PNC Foundation has invested more than $4 million in Detroit preschoolers through PNC Grow Up Great®, PNC’s $500 million, multi-year early childhood education initiative. PNC Grow Up Great has impacted thousands of Detroit children through classroom programming, field trips, teacher training, and more.  In addition, local PNC employees have devoted thousands of hours volunteering for Grow Up Great programming in schools in the Detroit Public Schools Community District.
Partnership with LISC

The DHFF is managed by LISC Detroit, which for more than 30 years has been dedicated to helping revitalize the city’s neighborhoods by working with local leaders to invest in housing, health, education, public safety, and employment. LISC Detroit is part of the Local Initiatives Support Corporation, which is the largest nonprofit community development financial institution in the country. 

“Affordable housing is essential for creating vibrant communities that are home for Detroiters of all walks of life,” said Tahirih Ziegler, Midwest Program Vice President of LISC. “The affordable housing shortage is one of the biggest issues facing our city right now, and the time to address it is now. We are incredibly thankful to the corporate partners who stepped up to help us and answered our call as we work together to make a better, more equitable Detroit.”

Other key funders in the DHFF’s initial capitalization include JPMorgan Chase, which committed $15 million to the fund last fall, including $12.5 million in low-cost loans and a $2.5 million philanthropic investment. The fund is anchored by a $15 million commitment from JPMorgan Chase and a $10 million guarantee from The Kresge Foundation. An additional $15.5 million in low-interest lending has been committed by Flagstar Bank, Citizens Bank, and First Independence Bank. 

“Housing is a foundation for stability in a person’s life. Ensuring that Detroiters have access to housing that is quality, safe and affordable is one of our department’s biggest goals,” said Julie Schneider, Director of the Housing & Revitalization Department, who has led the development of the fund. “The Detroit Housing for the Future Fund will be a key piece to tackling inequality and housing instability in our city. I would like to thank LISC and the fund’s corporate givers for helping us work toward a better Detroit for all Detroiters.”

Developers can go to www.detroithousingforthefuturefund.org to apply or learn more about the fund.

About PNC Bank

PNC Bank, National Association, is a member of The PNC Financial Services Group, Inc. (NYSE: PNC). PNC is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.