In many cases, the only way to preserve a property is through purchase by a nonprofit or mission-driven for-profit corporation, typically with local public financial support. Some communities have established their own predevelopment, acquisition and interim financing programs to facilitate these transactions.

Predevelopment, acquisition and interim financing help affordable housing developers compete with often deeper-pocketed market rate developers to acquire at-risk subsidized and unsubsidized properties and preserve long-term affordability:

  • Predevelopment financing helps cover the costs associated with investigating potential leads and conducting the due diligence necessary for determining whether a particular preservation transaction can work.
  • Acquisition financing helps a developer purchase and hold a property until additional financing is available to support redevelopment or rehabilitation activities.
  • Interim financing provides resources to affordable housing developers to operate the property until it is recapitalized and permanent financing is put into place.

While some of these financing needs can be met by the private sector, in many cases public resources are also needed. This is especially true for smaller nonprofits that do not have as ready access to capital as larger organizations. Even larger nonprofits and for-profits may have difficulty accessing financing to purchase larger properties quickly enough to compete with other purchasers.

In creating property acquisition funds, communities often build partnerships with Community Development Financing Institutions (CDFIs) that bring additional financing capital and services. CDFIs such as Enterprise Community Partners, the Low Income Investment Fund (LIIF) and the Local Initiatives Support Corporation (LISC) are partnering with local governments and regional bodies in a handful of expensive housing markets nationwide to expand the availability of lending capital for the acquisition of rental properties, often with an emphasis on transit-served neighborhoods.

Case Studies

New York City Acquisition Fund

A major element of New York’s preservation strategy is the city’s Acquisition Fund. The fund provides $230 million in affordable financing for the acquisition and preservation of affordable homes. The fund was capitalized with $8 million in city funds, combined with $32 million in loan guarantees from private philanthropic organizations, to leverage more than $190 million in private financing. The fund, which provides bridge financing for the acquisition of properties, has preserved or created over 7,000 affordable housing units as of 2015.

For More Info:


Denver Regional Transit Oriented Development (TOD) Fund

The Denver Regional TOD Fund is a land acquisition fund supporting the preservation and creation of affordable housing near current and future transit stations in the Denver region. Since 2010, this partnership between the Urban Land Conservancy, Enterprise Community Partners and the City and County of Denver, along with several other investors, has facilitated the preservation or creation of more than 626 affordable units by extending $13.5 million in capital available at a low interest rate to enable the purchase and holding of sites by affordable housing developers for up to five years. Originally limited to acquisitions within Denver County, the fund was expanded in 2015 into a $24 million regional resource that can also be used to preserve affordable properties or future affordable development opportunities throughout the Denver region.

For More Info:

Brad Weinig, Enterprise Community Partners
Email: [email protected]

Oregon Housing Acquisition Fund

The city of Portland and the state of Oregon have worked together since 2007 to offer a revolving loan fund to finance the purchase of at-risk, affordable properties and preserve their affordability until permanent financing is available. The Oregon Housing Acquisition Fund offers two types of loans: one for at-risk, subsidized properties and the other for market rate properties that will be converted to affordable units. The Fund also has a Green Pilot program that offers financial support for integrating green and sustainable building practices into the renovation of preserved properties, to help minimize operating costs and create healthier living environments for tenants.

The Housing Acquisition Fund is part of an umbrella initiative known as the Oregon Housing Preservation Project, which aims to preserve 6,000 at-risk units statewide (80% of the state’s estimated at-risk stock). As of 2013, OHPP had achieved 78 percent of this goal. The Acquisition Fund and the Oregon Housing Preservation Project are both administered by the Network for Oregon Affordable Housing.

For More Info:

Rob Prasch, Network for Oregon Affordable Housing
Email: [email protected]