Metro Denver Impact Facility - Urban Land Conservancy

Metro Denver Impact Facility (MDIF)

Metro Denver Impact Facility (MDIF) is the financial cornerstone for ULC’s successful real estate acquisitions.

Launched in 2018 in partnership with FirstBank, MDIF’s focus is to combat the real estate affordability crisis in the Denver region.

Funding affordable housing and community space in today’s market requires creative solutions. The $75 million Metro Denver Impact Facility (MDIF) is a revolving source of patient, low-cost capital that aims to combat the region’s affordability crisis through the acquisition and preservation of affordable housing, facilities for nonprofits, schools, and spaces that benefit the community.

MDIF is supported through a collective of lenders, led by FirstBank, which committed $37.5 million in a 10-year revolving credit agreement. Other MDIF partners include the Colorado Division of Housing, Colorado Housing and Finance Authority, Colorado Health Foundation, Gates Family Foundation, Colorado Trust and Gary Community Ventures.

A flow chart that says Senior Debt + ULC Equity + Unsecured debt + PRI capital = metro denver impact facility

How MDIF Works

FirstBank’s loan is the principal debt and the bank underwrites each acquisition for all the MDIF lenders. As the creator and sole borrower from the facility, ULC oversees the development plan, the structure of permanent financing, and the disposition of acquired properties. In most cases, ULC retains ownership of land through a 99-year land lease. MDIF achieves below-market interest rates by blending discounted bank funds (driven by the Community Reinvestment Act of 1977) with extremely low-cost nonprofit, public and philanthropic dollars.

Funding Structure:

FirstBank invests $37.5M (senior debt) at 4.25%, manages the fund locally and underwrites each deal, also evaluating the need for additional project financing to address capital needs.
ULC contributes up to 10% cash equity for each property acquired and is responsible for putting together development plan and permanent financing.
Unsecured debt is invested at a rate of 0% to 1%.
Foundation/philanthropic, typically lent via program related investments (PRI capital) seeking modest financial returns of .05% to 2%.

Benefits of Funding Structure:

Loan terms are up to ten years (with no purchases after year eight)
Up to 90% loan-to-value ratio
Interest-only at low, blended interest rate — fixed at 3%

Proven History & Experience

As of 2023, MDIF has funded 40% of ULC-owned properties, to the tune of $81 million. ULC has a strong track record of creating, leveraging, and paying back revolving loan funds for affordable real estate investments. Innovative financing methods like MDIF and others — such as the $15 million regional TOD Fund and the $10 million Calvert Facility Fund — allow ULC to deliver on its mission and make a difference in the lives of thousands of Coloradans.