Colorado Housing Accelerator Initiative

Description: The Colorado Housing Accelerator Initiative (CHAI) is an impact-first social enterprise fund that focuses on middle-income housing projects (60%-120% AMI) in Colorado through both debt and equity funding. The fund is sponsored by Weave Finance LLC, a for-profit organization working with mission-driven clients. The initiative’s mission is to speed up the delivery of mission-driven capital to affordable housing projects across Colorado, and it funds preservation, new construction and adaptative re-use projects. There is the possibility of bridge, construction and mini-perm terms. It can invest up to $2 million, and senior, subordinate, mezzanine and equity securities are available.
Weave has developed two funds. The first is a $12 million debt fund pooled through both private and government contributions that is designed for program-related investments. The second fund is a $15 million equity fund, $9 million of which was funded by the Colorado Housing Finance Authority. It has a return of 5%-6% and is a limited partnership focused on mission-related investments. They have a Private Placement Memo that serves as a business plan and outlines the terms of investments. They seek underrepresented developers. And through their Tenant Equity Vehicle (TEV), tenants get 2% cash back on their return payments (and sometimes annual bonuses).
They are pairing the debt (steady return) and the equity (variable return), and they have reached break-even with foundation donations and government contributions. Weave will be fully deployed soon, and the goal is $50 million with 50-50 debt to equity.

What makes it different: CHAI supplements existing programs, such as the Low-Income Housing Tax Credit, by focusing on missing middle households as well as offering a TEV to help renters build wealth.

Resource: https://chaifunds.com/approach