The Vacant Building Credit Enhancement Fund is a focused revolving loan fund that offers additional financing tools in the rehabilitation of vacant commercial buildings. The City seeks to support the redevelopment of vacant and underutilized commercial structures throughout South Bend by providing targeted loans to promote commercial real estate projects.
This Loan Fund seeks to incentivize commercial developments that pose unique economic challenges and can provide supplemental funds to aid in the completion of a real estate project with rehabilitation components. Loans are at fixed rates that are generally below market rates.
To assist in administering the program, the City has partnered with the Business Development Corporation (BDC), a designated Priority Certified Development Company by the U.S. Small Business Administration. Founded in 1982, the BDC supports entrepreneurs and business owners with the goal of stabilizing and revitalizing local communities.
What is the Vacant Building Credit Enhancement Fund?
The Vacant Building Credit Enhancement Fund provides loans up to $500,000 for qualified redevelopments. The minimum loan is $200,000. Preference will be given for projects located on the major corridors within South Bend, but all commercial buildings within the City that meet the program requirements are eligible.
Loans through this fund must be matched by additional capital, including financing by a traditional lender. If approved, the loan can provide funds of up to 40 percent of the total project costs. Origination and annual maintenance fees do apply, and loan terms generally match those of the primary lender.
Who and what is Eligible?
To qualify, revitalization projects must meet certain requirements. Commercial real estate projects can include incremental development of large industrial buildings, mixed-use (including those with a residential component), or single-use commercial real estate project. Program funds can be used for the acquisition, construction, redevelopment, and/or rehabilitation of real estate. The property must be located in the City of South Bend, and a project with primary lender that maintains a physical presence in the City will be given preference. Each loan request is reviewed on its own merits but may also be compared to other submissions for the program.