PHILADELPHIA (KYW Newsradio) — For years in Philadelphia, leaders have discussed how to develop more affordable housing, and how to get the community more involved. These discussions have led to the creation of the Philadelphia Accelerator Fund, formed three years ago and now officially up and running.
As of Monday, the non-profit loan group has $10 million to lend.
The fund’s goal is to level the playing field for small Black and brown developers who lack access to capital, while addressing the city’s affordable housing crisis and taking on neighborhood blight.
Dawud Bey, CEO of Fine Print Construction, is planning a 42-unit project in Point Breeze. He said the program is a great benefit for small developers.
“I understand the process of building, but I didn’t have the wherewithal to get the type of financing that I needed to take my company and my programs to the next level,” Bey said.
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He adds that young people in the community need to see that people who look like them are making these entrepreneurial moves.
“I’m a self-professed social impact developer, so being able to have access to bring my dreams and aspirations to fruition is actually a great thing for us,” he said.
Bey added his project may cost between $5 million and $8 million, and he may have to come up with $475,000 in equity requirement funds that he typically wouldn’t be able to have access to. With the Philadelphia Accelerator Fund, he’s able to do it.
The city passed an ordinance three years ago that allows anyone to acquire vacant city property inexpensively and without competition, as long as their project includes 51% of affordable housing.
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PAF Chairman Mohamed Rushdy said this could have caused small minority developers to be left out, due to all of the financial qualifications needed to do the job,
“What that means is you’re going to be sidelining a lot of people that have been historically living in the neighborhoods that have the ability to develop affordable housing, but have no access to capital,” Rushdy said.
PAF says it aims to also focus on smaller-scale and nonprofit developers, projects with what the group calls deep housing affordability and permanent affordability with minimal public subsidies.
They also aim to partner with borrowers who desire "equitable development of Philadelphia communities."
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According to the group, a series of elements makes this program different from others:
- A no-red-tape process which means easier, faster loan processing.
- Underwriting that considers the project’s community impact, not the individual’s credit score.
- Flexible lending with six different types of loans including acquisition and pre-development.
- Support services including mentoring.
70% of the funds come from investors, and 30% through philanthropy. The fund expects to reach the $100 million mark by 2025.
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