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How It Works
CDT helps to expand the flow of much-needed long-term capital to the community development industry by serving as a secondary market for affordable housing loans on both new and existing multifamily rental properties. Our Debt Program focuses primarily on fixed-rate mortgages that may not be efficiently priced by traditional secondary markets-whether because of their small size ($5 million and under), configuration (scattered-site and urban rehabs), affordable aspects, or lack of rated credit enhancement. For their part, affordable housing lenders that sell loans to CDT gain a number of benefits from the transaction, including an increase in liquidity, an opportunity to expand their debt product offerings, and the ability to earn CRA credits.
The core business of CDT's Debt Program is the fixed-rate forward commitment product. Generally used to finance newly constructed communities with Low Income Housing Tax Credits, this product provides our customers with a key tool for funding permanent mortgages, without assuming interest rate risk and long-term capital risk. In addition to our forward commitment business, CDT also purchases individual loans and portfolios of seasoned loans on a negotiated basis.
