Homework Question on Financing Mixed-Use Development
- Watch this video.
- Comment on some aspect of the CNU session on financing mixed-use development.
- Why is mixed-income/mixed finance characterized as a “mess” and how can the situation change?
- How important is the financing issue?
- What does mixed-use have to do with poor people?
- What are the problems and the proposed solutions for getting mixed-use development built?
Homework Answer on Financing Mixed-Use Development
The mixed-use development is usually affected by the legal and structural factors. Either a private or a public party may own the land that is used for the development. There are high risks associated with this kind of development, and thus the lender prefers a sponsor who has a record of high and quality performance in such projects. Some of the parties involved in the development of these projects include the borrower, lenders, and the municipality. The loan term is mainly determined by analyzing the project feasibility and the project’s individual components.
Why the Mixed-Income/Mixed Finance is characterized as a “Mess”
The finances available for the mixed income are not enough to start the mixed income housing projects. The developers cannot be financed, and the homebuyers cannot secure the mortgages. This is mainly due to the fact that the mixed-use buildings are not classified under the traditional asset classes, and thus do not receive much attention in relation to lending. The private lender has to align their lending practices to the federal guidelines.
Importance of Financing
It is impossible for a project to be implemented without finances. The best form of financing a project is through the public/private partnerships. Gorman and Company Inc. is one of the companies that have reaped the benefits of the partnerships toward a successful implementation of a project.