CZI Innovative Housing Finance RFA

Everyone deserves a safe, stable, accessible and affordable place to call home — and we believe that strong, equitable housing infrastructure is essential and foundational for thriving communities. At the Chan Zuckerberg Initiative (CZI), we’re dedicated to rebuilding our housing system — with racial and economic equity at its core, and with collaboration and coalition-building as a guiding principle — so that everyone can live, work, and thrive in California.

California faces a significant shortage of housing, with the state estimating it needs to build 2.5M new homes, with 40% below market, by 2030. This shortage and the high cost of housing has made it increasingly difficult for many Californians to find affordable housing options. Some of the challenges to producing or preserving housing include the high cost of construction and land, barriers to financing newer models of housing, and a lack of sufficient funding for affordable housing.

Innovative financing plays a crucial role in addressing these challenges by increasing access to capital, reducing financing costs, and seeding new approaches to housing development. By investing in funds held by intermediaries, CZI aims to support the ecosystem of mission-driven lenders and advance financing solutions that build on initial demonstrations to scale their impact and catalyze meaningful progress toward California’s housing goals.

The Innovative Housing Finance Request for Applications (RFA) will support funds that finance the production and/or preservation of housing in California. Funds should support multiple rental and/or owner-occupied housing projects that will benefit low and moderate-income households, and should fit into one of the following approaches:

• Bring down the cost to produce or preserve housing (e.g., construction cost reductions, surplus lands projects, streamlined or lower cost financing, insurance coverage and premiums, land banking, etc.).
• Fund housing project types with unique financing barriers (e.g. lot splits, ADUs, development on surplus lands, tenancy in common, cooperatives, etc.) with a focus on taking advantage of recent land use reforms.
• Unlock or leverage other sources of funding (e.g. pension funds, climate funds, CRA, hospitals, private sector, tenant vouchers, etc.) through a new approach.

Selected organizations will be considered for funding in 2024 and 2025 through program-related investments (PRIs), with each investment size in the $1-3M range.

The Innovative Housing Finance RFA will open on April 16 at 8 a.m. PT. Interested organizations are invited to submit a Letter of Inquiry (LOI) before 5 p.m. PT on May 16, 2024.

Organizations interested in funding through the Innovative Housing Finance RFA must meet the following criteria:

• Organization Characteristics:
  • Organization is a nonprofit or for-profit enterprise that develops funds to support housing projects. Organization may be an intermediary lender that serves multiple borrowers or an organization that manages funds for its own housing projects. If the organization is a for-profit, the fund must be structured to allow a PRI to meet IRS charitability requirements.
  • Organization has been operational for three or more years, with an operating budget of $1M+ and $5M+ of assets under management.
  • Organization has a demonstrated track record of successfully launching and managing a fund.
• Fund Characteristics:
  • Finances the development or preservation of multiple housing projects for low and/or middle-income households (defined as up to 120% AMI).
  • The overall fund (inclusive of CZI capital) will lead to at least 50 units or households supported, with the potential to address a housing type/need that could scale to hundreds of thousands of households in the longer term.
  • Operates in CA, with the majority (at least 75%) of CZI funds invested in CA.
  • The financing solution should be replicable across multiple markets in CA or statewide. The pilot can focus on a smaller geographic area initially but should have a well-defined strategy for scaling the model and impact.

All proposals submitted through the RFA will be evaluated based on the following criteria:

• Mission & Strategy: Organizational focus on developing innovative approaches to address housing financing challenges. The proposed fund is aligned with the mission and vision of the organization, and builds upon the organization’s existing strategy.
• Relevant Experience: Organization has experience and a demonstrated track record of successfully launching and managing one or more funds. Leadership and staff have deep experience in the innovative finance sector, and ideally also in the housing sector and with the intended beneficiaries of the fund.
• Impact & Scale: Proposal addresses a key financing challenge in the housing ecosystem with the potential to support the production and/or preservation of hundreds of thousands of units in the long term with relevance across different market types. Organization has a clear theory on how this product could be scaled and adopted more broadly to increase impact, including unlocking other sources of capital.
• Strategy & Learnings: Organization demonstrates a clear and nuanced analysis of the opportunities and challenges to the fund, with the ability to define what short and long-term success looks like. Preference will be given to organizations with a clear strategy on how to measure and evaluate impact and share learnings.
• Equity & Inclusion: Organization has a focus on designing for and prioritizing historically disadvantaged communities to advance racial equity and economic inclusion. Preference will be given to organizations that have demonstrated a long-term commitment and connection to the communities they serve.
• Fund Viability and Leverage: Fund is designed with measures to increase financial sustainability. Fund maximizes impact by leveraging other sources of funding. Fund is structured to align incentives between the fund manager, investors, and beneficiaries, with preference given to organizations that are willing to invest their own sources of capital into the fund alongside a CZI investment.

Letters of Inquiry (LOIs) must be submitted online through the SurveyMonkey Apply portal at apply.chanzuckerberg.com. All LOIs must be completed and submitted no later than Thursday, May 16, 2024, at 5 p.m. PT.

The LOI process will include submitting organizational background information, a description of the fund, and a high-level financial summary. Organizations selected for further consideration will be contacted by June 3, 2024, and will be asked to submit a full proposal through SurveyMonkey Apply by June 27, where we will request more detailed information on the fund proposal, project staff, project budget, and fund modeling and impact.

Organizations that are not selected to move forward to the proposal stage after submitting an LOI will be notified of this decision in June 2024. For organizations that submit a full proposal in June, we may request follow-up calls to discuss the proposal. Information on potential CZI investments, timing, and details for organizations that submit full proposals is expected to be shared with applicants by September 2024.

All submitted applications will be kept confidential, except as necessary for evaluation or to comply with any applicable laws. All applications submitted through the shared portal will be shared with a team of reviewers including CZI employees, consultants, and outside subject matter experts, selected at the sole discretion of CZI. CZI will also aggregate and anonymize data and learnings from the RFA to inform future program development, which may be shared externally.

Q: What qualifies as a fund?

This can include a standalone fund or an investment into an organization’s balance sheet that is restricted to a certain use case that aligns with the focus approach areas for this RFA.

Q: Can my organization apply if we are not based in California?

Yes, as long as your organization meets the minimum eligibility criteria and the fund operates in CA, with the majority (at least 75%) of CZI funds able to be invested in CA housing projects.

Q: How will CZI’s investment be structured?

Investments into funds submitted through this RFA will be program-related investments (PRIs) and may be structured as equity, debt, or an unfunded guarantee. Investment sizes will generally range between $1-3M, with a maximum term of 10 years. If your proposal is recommended for funding, we will work with you to determine the investment terms.

Q: Can funds from CZI be used to cover operational costs?

In addition to a PRI, CZI may provide up to 10% of the PRI amount as a grant for operating costs.

Q: What stage does the fund need to be in to apply for funding?

We will consider investments directly into funds that are in the design phase, ready to launch, or already launched.

Q: What are examples of projects that are out of scope for this RFA?

• Financing to directly support an individual housing development.
• Equity investments directly into a single housing development entity.
• Funds without an innovative financing component (e.g. providing gap financing in ways that have already been proven).
• Consumer mortgage loans directly to households.
• Lending exclusively or primarily outside of CA.
• Advocacy or political campaigns to support building more housing or adopting new policies.

Q: Can I apply as a joint partnership?

There should be one applicant who meets the minimum organization eligibility criteria that would receive the funds and interface with CZI, but applicants are welcome to partner with other organizations on the design of the fund as they deem appropriate/needed. Please note these current or intended partners in your submission.

Q: Can I share my idea with the CZI team for feedback prior to submitting an LOI?

Due to the anticipated high volume of submissions, we cannot provide individual feedback on ideas or proposals.

Q: How many proposals will be selected through this RFA?

The number of proposals selected for funding will be determined based on the number of submissions that are aligned with our team priorities and a good fit for a CZI investment based on the eligibility requirements and selection criteria.

Q: What if I already have funding from the Chan Zuckerberg Initiative? Can I still submit a letter of inquiry to the Innovative Housing Finance RFA?

Yes. We encourage all current and past grant and investment partners who meet the eligibility criteria to consider submitting an application.

Q: Can I save my LOI/application and return to it at a later date?

You can safely save and resume your proposal any time before the proposal deadline. You will also be able to check the status of your proposal once it has been successfully submitted. Due to the anticipated high volume, we will not be able to follow up on incomplete or inaccurate information. Please be sure that your proposal is complete prior to submission.

Upon submission of your proposal, you will receive an email confirming receipt. Please let us know if you did not get a confirmation email by emailing us at housinginnovation@chanzuckerberg.com with the subject line “Missing Email Confirmation.”