Deutsche Bank, in partnership with Enterprise Community Partners, recently launched Enterprise Social Fund, an innovative investment fund that aims to raise and invest $15 million in low-income community revitalization efforts. The project addresses a crucial need for affordable housing as indicated by a 2003 American Housing Survey conducted by the U.S. Census Bureau. It revealed that in more than 12 million U.S. households, more than 30 percent of individual incomes are allocated to rent and utilities, leaving little for food, health care and other necessities.

The fund expects to construct or rehabilitate 3,000 homes for low-and moderate-income families while promising near-market returns to investors. With such incentives, the fund seeks to engage socially accountable corporations and affluent individuals with no prior experience in community development. $12 million is slated to come from institutional investors and $3 million from affluent individuals, with Deutsche Bank guaranteeing 20 percent of the fund’s total capitalization.

According to the press release, Enterprise has placed more than $300 million over the last 23 years in loans for pre-development, acquisition, rehabilitation and construction of affordable housing and community facilities, with an average loan loss rate of less than 1 percent. The fund will be managed by Enterprise Community Loan Fund, Inc., a supporting not-for-profit entity of Enterprise Community Partners, Inc. Loan decisions will be overseen by an advisory board of business professionals and experts with experience in community development finance. Nationwide, community development corporations build more than 60,000 affordable homes and apartments each year.