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Building an Equitable Chicago • August 26, 2025

Creative Financing Strategies for Equitable Development

by Molly Heyen
Crowdfunding image of many people contributing money to an idea.

Introduction

Financing is often the biggest barrier for equitable developers. Traditional lending requirements can be too rigid, while community-oriented projects may not fit neatly into conventional underwriting models. Yet, creative financing strategies can help bridge the gap, making it possible to bring socially impactful projects to life.

This post explores financing tools and approaches that mission-driven developers in Chicago can leverage to move their projects forward.

1. Grants and Subsidies

Local and federal grants can provide non-repayable funds to support pre-development, construction, or operational costs. In Chicago, programs may target affordable housing, small business development, or community revitalization.

  • Pros: Reduces reliance on debt, strengthens community alignment.

  • Cons: Highly competitive, time-intensive applications, and strict compliance requirements.

2. Tax Credits

Tax credit programs such as Low-Income Housing Tax Credits (LIHTC) or Historic Preservation Tax Credits can provide significant equity.

  • Pros: Attracts private investors, makes otherwise infeasible projects possible.

  • Cons: Complex structures, requires specialized advisors, and often adds layers of oversight.

3. Community Development Financial Institutions (CDFIs)

CDFIs specialize in lending to projects that traditional banks may view as too risky. They understand community-driven models and can offer more flexible terms.

  • Pros: Mission-aligned, more flexible than traditional banks, strong community ties.

  • Cons: Interest rates may be slightly higher than conventional loans, and funding capacity may be limited.

Crowdfunding image of many people contributing money to an idea.

4. Crowdfunding and Community Investment

Platforms for real estate crowdfunding and local investment pools allow communities to invest directly in developments. This not only raises capital but also builds community buy-in.

  • Pros: Enhances community ownership, diversifies funding sources.

  • Cons: Regulatory hurdles, requires strong community trust, smaller individual investments.

5. Public-Private Partnerships (PPPs)

As mentioned in earlier posts, PPPs can be powerful tools for securing resources while advancing community priorities. Creative developers can align with municipalities or anchor institutions to co-develop projects.

6. Blended Capital Stacks

Most successful equitable developments use a combination of these tools. For example:

  • A loan from a CDFI, paired with tax credits

  • A grant for pre-development costs, layered with traditional financing

  • Community investment supplemented by anchor institution support

How I Can Help

As an advisor, I help developers:

  • Research and identify appropriate funding programs

  • Connect with CDFIs, grant programs, and impact investors

  • Build relationships with professionals who specialize in tax credits and layered financing

  • Evaluate which financing strategies best match their project’s scope and mission

Conclusion

Financing equitable development requires creativity, persistence, and the right partners. By blending traditional and innovative approaches, mission-driven developers can secure the capital needed to bring community-focused projects to life.

If you’d like guidance on exploring financing options for your project, I’d be happy to help you get started.

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