The Community Development Trust (CDT), a New York-based real estate investment trust that provides capital for the preservation and creation of affordable housing, has announced its donation of a $1.2 million first mortgage loan to Detroit-area nonprofit Southwest Housing Solutions on Daystar Estates, a 48-unit, single-family-home development on the city’s east side.
The CDT’s donation represents the largest-ever combined contribution of homes to Southwest Housing Solutions in its 44-year history, says Tim Thorland, executive director for the organization.
The move gives control of the Daystar properties – located in an area bordered roughly by Mack Avenue and Connor, Dickerson and Charlevoix streets – to Southwest Housing Solutions and enables the company to begin the neighborhood’s redevelopment, the CDT says.
The original borrower defaulted on the Daystar Estates mortgage loan in 2015. As the first mortgage holder, the CDT evaluated its possible alternatives related to the investment and concluded that it did not want to put the properties through an extensive foreclosure process, according to Joan Berkowitz, the firm’s senior vice president of asset management.
The property was developed using low-income housing tax credits, the federal housing program that makes rent affordable to lower-income tenants, asserts the CDT.
Thorland adds that the donation “provides us with the opportunity to ensure the preservation of these units as quality, safe and affordable rental properties. We also plan to work with the families who move into these homes and establish a conversion-to-ownership plan that will be completed over the next four years.”
Jacqueline Bejma, executive director of LAND Inc., a local not-for-profit commercial real estate development organization, says, “Rehabilitation of these housing units is a much-needed step in the right direction for the future of the east side. Nearly 50 quality, newly rehabbed new homes, coupled with the ongoing $20 million investment in nearby Chandler Park’s new recreational, landscape and stormwater mitigation efforts, make Detroit’s east side neighborhoods a wonderful and affordable option for existing and new young families and professionals looking to live in the city and be a part of our promising new future.”