CFSB helps local nonprofit finance its mission

CFSB’s expertise, connections assist Near Northwest Neighborhood in developing “missing middle” housing

Construction is now underway on the first small-scale, multi-family development in decades to be built in South Bend’s Near Northwest Neighborhood, thanks in part to lending assistance from CDFI Friendly South Bend. 

A significant portion of the $750,000 development is made possible through loans from IFF, a leading funder of Midwest nonprofits and one of the community development finance institutions in CFSB’s network.

CFSB Executive Director Sam Centellas (second from right) and other local leaders break ground on the new development at 821 Cushing in South Bend.

Courtesy WNDU.

The development will be owned and managed by the Near Northwest Neighborhood, Inc., a nonprofit community development corporation dedicated to the preservation and revitalization of the neighborhood. 

The NNN’s new construction at 821 Cushing Ave will feature four 2-bedroom apartments of roughly 900 square feet each. The income-restricted apartments will be available to households at or below 80% of area median income, allowing the NNN to further its mission of providing affordable housing to low- and moderate-income residents. 

Designed to look like one large house, the project will match the character of this residential neighborhood of single-family homes. The fourplex will address a common problem – a lack of affordable housing located in walkable neighborhoods close to the city center. Local community development experts call this gap the “missing middle.”

The NNN’s new construction at 821 Cushing Ave will feature four 2-bedroom apartments of roughly 900 square feet each.

(Digital Rendering)

How the “middle” went missing

For nearly a century, zoning ordinances in cities like South Bend have limited development in many residential neighborhoods to single-family homes, pushing apartment complexes or similar multi-family developments to the suburbs. As rising home prices have made home ownership increasingly unaffordable, renters have been relegated to those outer neighborhoods where rental options exist.

Planners know this lack of affordable housing within single-family neighborhoods – the “middle” that is now missing – creates an economic imbalance that impacts livability citywide.

In 2020, the City of South Bend revised its zoning ordinances to create opportunities for developers to meet this need. The about-face means smaller, multi-family projects like 821 Cushing are now encouraged. 

Unfortunately, the new zoning ordinances alone aren’t enough to spur the development city leaders envision. For nonprofit developers like the NNN, even small-scale developments still have large price tags.

For 821 Cushing, only about 60% of the project’s cost will be met by grants, including city-administered Community Development Block Grant (CDBG) funds. To make up the difference, the NNN sought lending assistance from CDFI Friendly South Bend.

Designed to look like one large house, the 821 Cushing project will match the character of this residential neighborhood of single-family homes. The fourplex will address a common problem – a lack of affordable housing located in walkable neighborhoods close to the city center.

Courtesy City of South Bend, 2019 Near Northwest Neighborhood Plan

CFSB helps nonprofits stay centered on mission

Nonprofit organizations face unique financing challenges. Because nonprofits often do not have traditional business models with steady cash flow, traditional lenders often decline to finance them. When those nonprofits seek alternatives, it is the mission of CFSB to help them find non-traditional financing solutions. 

“A nonprofit executive is focused on their mission. They may not have time to become an expert at finding financing,” says CFSB Executive Director Sam Centellas. “We have that knowledge and expertise. When they reach out to us, we help the nonprofit stay centered on their community impact without having to worry about the intricacies of different types of finance,” Centellas says.

Once the NNN reached out for help securing loans for 821 Cushing, CFSB mobilized its network of Community Development Financial Institutions. CFSB ultimately connected the NNN with the lending it needed from IFF, the Midwest’s largest nonprofit CDFI specializing in funding for nonprofits and service providers. IFF will be providing $375,000 in financing for the fourplex at 821 Cushing and a similar duplex project. 

A ceremonial groundbreaking for 821 Cushing was held on September 22, 2022. The project is expected to be completed by mid- to late 2023.