The Catalyst Fund is a partnership between Cinnaire and the Delaware State Housing Authority (DSHA) designed to address vacant property in communities in Delaware disproportionately impacted by the COVID-19 pandemic. Through the Catalyst Fund, both for-profit and nonprofit developers can apply for construction financing and subsidy needed to renovate vacant homes or build new homes on vacant land for affordable homeownership. Administered by Cinnaire, the Catalyst Fund will make up the gap between the cost of acquisition and renovation that too often stands in the way of equitable community revitalization in Delaware’s neighborhoods.
The CDC has recognized that “neighborhoods people live in have a major impact on their health and well-being.” Research has revealed correlations between high rates of vacant or abandoned properties in a neighborhood with worse physical health and mental health outcomes.
Vacant and abandoned properties also present a barrier to economic recovery. When neighborhoods face high concentrations of vacant properties or when properties remain vacant for long periods of time, the cost of renovation or redevelopment is often greater than the after-improved value, putting scalable and targeted revitalization efforts financially out of reach. In many neighborhoods facing high levels of vacancy, there is also a significant homeownership gap, negatively impacting neighborhood stabilization and growth. This is often compounded by the rising costs and limited availability of “move-in” ready homes for sale in these markets.
The Catalyst Fund will also take steps to encourage the participation of new and emerging developers in order to expand the pool of local developers to help scale development activity and support equitable revitalization and inclusive economic opportunity. The Catalyst Fund will be designed to reach new developers to engage them in returning vacant properties to productive use. The Catalyst Fund will expand opportunities for homeownership while increasing diversity in the state’s real estate development community.
By expanding opportunities for real estate developers with roots in local communities to participate in growth and revitalization efforts, the Catalyst Fund will help chart a new path toward inclusive economic opportunity and neighborhood revitalization.
To meet federal guidelines for the State and Local Fiscal Recovery Fund (SLRF) program and focus the resource, DSHA has identified specific geographic areas as eligible for Catalyst Fund activities.
The map identifies highly distressed neighborhoods with high levels of vacancy and abandonment. Strategies should be focused on stabilizing neighborhoods through reducing vacancy and promoting increased homeownership.
To find out if your community is eligible, please refer to the interactive eligibility map provided by DSHA.
For profit or 501(C)(3) non-profit developers — A developer (Owner) is any corporate entity, partner, or individual responsible for initiating and controlling a real-estate development project and ensuring that all phases of the development process are accomplished.
Emerging developers — An Emerging Developer is defined as a developer with some level of real estate development training that is seeking to build real estate experience. An emerging developer:
Eligible Areas — Parcels must meet one of the following definitions in order to be eligible for Catalyst Fund construction financing and sales gap subsidy:
Blighted Structure: a structure is blighted when it exhibits objectively determinable signs of
deterioration sufficient to constitute a threat to human health, safety and public welfare.
Furthermore, DSHA considers a structure to be blighted if it does not meet the State of Delaware
Housing Code or the local building code.
Vacant: an existing property is considered vacant when it has been empty for more than one year.
ARE YOU AN ESTABLISHED NONPROFIT DEVELOPER WITH STABLE SOURCES OF CONSTRUCTION FINANCING?
For more information on how the Catalyst Fund will work, please contact DSHA at CatalystFund@destatehousing.com
For more information on construction lending and underwriting, please contact Cinnaire at DeCatalyst@cinnaire.com.