A strong local food ecosystem is essential to community health and economic prosperity — and in Washington, D.C., food deserts (areas without full-service grocery stores) in communities living with lower incomes are a significant factor in persistent food insecurity. Building local food businesses in underinvested communities can help support healthier neighborhoods, build economic prosperity, and increase access to high-quality jobs.
In 2021, Capital Impact Partners and the Government of the District of Columbia – along with a group of partners – launched the Nourish DC Collaborative, an initiative that supports the development of locally owned food businesses in D.C. communities to create vibrant, healthy neighborhoods.
Nourish DC offers flexible loans, grants, and technical assistance to emerging and existing food businesses. While it serves the entire District, the collaborative focuses on supporting businesses in underestimated neighborhoods, which are more often owned or led by people of color.
In this blog series, learn how food business owners are supporting their local communities and how technical assistance offered through Nourish DC helped them create change.
Since the racial reckoning of 2020, the term racial equity has been used consistently to talk about the goal of organizations like ours. Racial equity works to address hundreds of years of injustice perpetuated on the basis of race in this country: from the Indian Removal Act to chattel slavery and Jim Crow to the Chinese Exclusion Act and Japanese internment, and so many other examples of discrimination and oppression. In this light, the need for racial equity is clear, but what about racial healing?
Read about how we, at the Momentus Capital branded family of organizations, are working alongside our communities and partners to start the healing that is needed to build equitable, inclusive communities.
As we begin 2024, we at the Momentus Capital branded family of organizations want to thank all of you – whether you are a borrower, a partner, an investor, or a member of the Momentus community – for being part of our work to reimagine and build an economic system that includes everyone.
Read what our President and CEO, Ellis Carr, has to say about the impact you helped us create in 2023 and about the outlook for the year to come on the Momentus Capital blog.
Across the Momentus Capital branded family of organizations, we know that to maximize our impact, we need to first understand it. Building and sustaining healthy, inclusive, and equitable communities requires capital and resources – but without measuring outcomes, it’s impossible to develop effective interventions at scale.
That’s why we’ve developed a comprehensive Impact Framework to help us track the results of not only our loan offerings but also the capacity-building programs, technical assistance, and tools that make up our continuum of capital (PDF).
This framework is at the center of our decision-making process as we work toward our mission of helping to build inclusive and equitable communities by providing people access to the capital and opportunities they deserve.
So, what are we measuring, and why?
To learn more about what we are measuring and why, read the full article on Momentus Capital’s blog.
Across the Momentus Capital branded family of organizations, our mission is to ensure people and communities have the capital and opportunities they deserve to overcome a history of systemic disinvestment.
To support underestimated communities in achieving positive social and economic outcomes, we need a shared understanding of what that looks like, and why those outcomes are so important. This blog will outline how we at Momentus Capital define economic stability and why it is important, how it is tied to the other social determinants of health, and how we are working to promote economic stability through our work.
By Alexander McDonald, Senior Director of Lending Operations
For communities to thrive, they need resources — but too often, small business owners, developers, and local community development leaders lack access to the capital they need to drive progress.
Across the Momentus Capital branded family of organizations we are on a mission to change that through a community-first approach to lending grounded in our commitment to diversity, equity, and inclusion. And for us, that includes much more than the actual continuum of capital we deliver, but also HOW engage with our borrowers and partners to do that. Every aspect of our lending operations is built on our values, which means taking out a loan from Momentus is a much different experience than borrowing from a traditional financial institution.
But our approach doesn’t just feel good. It also leads to exceptional outcomes. The secret to our success? Putting the borrower first with superior client service, competitive products, and scaffolded support.
And our lending operations team is at the heart of what makes Momentus unique.
To learn more about how our lending operations team works with borrowers and supports social impact, please read our full blog on the Momentus Capital website.
By Masouda Omar, Head of Small Business & Community Development Credit – Lending Operation
As a Community Development Financial Institution (CDFI), Capital Impact Partners has played a part in both upholding and dismantling systemic racial bias in the credit system.
Since our inception, we have served sectors, industries, and borrowers not served by the traditional financial system.
Like many CDFIs, Capital Impact provides more flexibility than traditional lenders in some key areas like loan-to-value limits and financial covenants that borrowers must meet.
However, our credit guidelines – the policies that guide our loan structures and lending decisions – are built on the traditional approach to credit that has deep roots in a financial system that intentionally excluded people of color for much of its history. Often, our lending team seeks one or several “exceptions” to our credit guidelines to accommodate the diverse needs of our diverse borrowers.
Creating flexible financing is both a mindset and an approach. To do so, we need input from our clients and communities to rethink and reshape our products and requirements. When done correctly, this approach gears us away from the extractive patterns of traditional financing and closer to confirming that when people are given the opportunity to succeed, their communities, local residents, and our country thrive.
We have spent the last several years providing capacity building and support to diverse developers across the country. Having seen in our own lending that diverse developers were not well represented and hearing the barriers that they face in scaling up to work on more and larger projects, we determined that we needed to take bigger steps to address the need.
How We Are Doing Things Differently
In that light, we spent the better part of 2022 reviewing and revising our lending requirements and processes to be more equitable, to better support developers and borrowers of color from all walks of life in having access to the capital and opportunities they deserve. Additionally, we created the Diversity in Development loan product to provide access to capital that will help developers scale and thrive.
As a part of the Momentus Capital branded family of companies, it also became important for Capital Impact to revise and improve efficiencies in lending approval processes to account for a combined strategy.
Because one of the most important parts of transformation is transparency, we want to share the recent updates to our credit guidelines with our communities, partners, and other stakeholders.
Equitable Development Initiative graduates benefit from training and access to capital.
An Overview of Our New Credit Guidelines
Racial Equity Commitment
Developer Experience
Staying true to our vision, we want to be able to support diverse developers who might not have had the opportunity to build and sustain a track record in the markets where they are active.
Old guideline: requirement of three completed and operating projects
New guideline: one completed project and have been in operation for 3+ years
We are committed to looking at the borrower as a whole, taking into account their background including education, work history, participation in the Equitable Development Initiative (EDI) or other capacity building initiatives, as well as any relevant experience with joint venture partners and consultants.
Developer Equity
We wanted to lighten the load on a borrower to bring a certain amount of cash to each project.
Old guideline: 25 percent equity requirement for predevelopment costs in cases where there is real estate collateral
New guideline: 10 percent equity requirement for predevelopment costs
We have also expanded what we are willing to count towards equity to include subordinate or soft debt, and tax credit equity. Our Diversity in Development loan product further reduces the cash equity requirement to 5 percent for acquisition, predevelopment and construction costs, and increases the loan-to-value threshold as high as 125 percent for acquisition and predevelopment. Up to 3 percent of that equity can come from sources like grants.
This change benefits borrowers by allowing them to preserve their funds and use them toward working capital, growing/expanding their business, hiring staff, etc.
Guarantee Requirements
Given that most of the borrowers we work with have limited resources, we have eliminated the requirement of a strong guarantor possessing liquid assets and cash flows.
We still expect people who own 20+ percent of a business and are actively engaged in the business to issue guarantees, but we now look at guarantees as an assurance of the borrower’s commitment to the project rather than as a source of repayment.
Small Multifamily Project Guidelines
We are mindful that not every developer has the expertise and capacity to pursue larger-scope projects with more than 20 units. This, however, should not impede them from having the opportunity to start smaller projects that may be a better fit for their current experience level.
Old guideline: stringent requirements on projects under 20 residential units; did not allow developments with less than 10 units
New guideline: Eliminated requirements on projects under 20 residential units and now allow developments with fewer than 10 units
Smaller unit projects often have higher credit risk because a single vacant unit could jeopardize the project’s ability to make loan payments. However, smaller projects are an important stepping stone for many developers trying to build their portfolios, and we can mitigate the risk with other things like operating reserves and technical assistance.
That being said, we do have minimum loan sizes (now $500,000), but this does not have to impede borrowers from coming to us, as we are actively building a partner network to which we can refer clients in need for smaller loan sizes.
Streamlining Lending Approval Processes
As a mission-driven organization, it became all the more important for us to improve efficiencies in lending approval processes so as to be able to serve entrepreneurs and their communities seamlessly.
To that end, we have worked on the follow updates:
Eliminated credit committee approval to be able to issue term sheets to borrowers;
Reduced the size of our credit committee and streamlined approvals for lower-dollar loans;
Moved away from issuing commitment letters upon loan approval, and switched to issuing approval letters that are less of a legal document and more of a summary of terms. The reasoning behind this is that we want to avoid putting borrowers in a position where they have to make legal decisions prior to engaging legal counsel, and we also want to streamline our process to close loans more quickly.
Pivoting to Achieve Financial Equity for Our Communities
The changes above are only a starting point. We are committed to adapting to the needs of our borrowers by adding new products and continuing to evolve our credit guidelines in a way that meets the needs of our borrowers. In addition, we are building out a more robust network of technical assistance for our borrowers that ultimately reduces credit risk to both the borrower and the lender. One great example of that is our Equitable Development Initiative (EDI). Through EDI, we aim to provide capacity building in the form of training, mentorship, access to technical assistance, and predevelopment grants (where/when available) to diverse developers, so as to enable them to succeed in projects appropriate to their levels of expertise.
We are continuing to think through how we can fold equity into our credit guidelines to transform how capital and investments flow into communities. We are excited to share more about our journey as we grow and evolve to serve communities.
Contact us today to start a conversation about how Momentus Capital can support your journey to success.
At Momentus Capital, we envision a future where everyone has the capital and opportunities they deserve – especially those who have been excluded from both for so long.
Our President and CEO Ellis Carr reflected on the contrast between Independence Day celebrations and a set of Supreme Court decisions that challenged promises about democracy, opportunity, and the pursuit of happiness.
His reflections tackle a few areas:
How promises about democracy, opportunity, and the pursuit of happiness have been shaken;
How these decisions will have negative consequences on fellow citizens who have faced long decades of discrimination; and
Momentus’ commitment to continue to speak and work in support of underestimated communities.
Community Development Financial Institutions (CDFIs) were born out of the civil rights movement to ensure that nonprofits and businesses — particularly those in communities of color and communities with lower incomes — have equitable access to loans. Yet, CDFIs are part of a financial system embedded with discriminatory lending practices which need to collectively be addressed in order to fully achieve the intended goal of equalizing access to financial resources for all people.
Momentus Capital’s family of organizations, including Capital Impact Partners, CDC Small Business Finance, and Ventures Lending Technologies, is working to help support economic mobility and wealth creation through more equitable access to capital for communities that have been long overlooked by traditional financial organizations.
In line with this commitment, and in recognition of discriminatory lending practices identified within CDFIs, Capital Impact Partners collaborated with Nonprofit Finance Fund (NFF) to identify and address policies and practices that contribute to it. We conducted research to understand how some local and national CDFIs have successfully taken steps to address inequity within their own lending practices.
Affordable housing development firms led by people of color – both nonprofit and for-profit – are highly underrepresented in the housing industry, yet are a critical resource for strengthening the housing development ecosystem as a whole and expanding the supply of homes that are affordable. Currently, people of color are estimated to make up less than 5% of the developers in the country.
To support the growth of and opportunities for developers of color in the Washington metro area, as well as increasing the amount of affordable housing regionally, Capital Impact Partners partnered with Amazon to create our Housing Equity Accelerator Fellowship (HEAF). The fellowship provides training, mentorship, and grant capital to support wealth building for developers and their firms, and community building through increased affordable housing.
One of our HEAF participants is Ronette “Ronnie” Slamin, founder of Embolden Real Estate. In this blog profile by HAND, she discusses her journey to becoming a real estate developer, how she views real estate development as a tool to address infrastructure issues, and being intentional about creating space for women and people of color.
Ronnie Slamin, second from the left, started her development company Embolden Real Estate in 2021.
The HAND network is hard at work to address the growing housing affordability challenge across the Capital Region. Five Minutes With is a series highlighting these members and other stakeholders. This informal conversation delves into their recent projects, the affordable housing industry, and more. In this edition, we had a conversation with Ronette “Ronnie” Slamin, founder of Embolden Real Estate. Check out our dialogue below to learn about her development firm, what she believes women leaders of color in the real estate industry can do to move the needle in a different direction, and the importance of explaining the multiple levels of housing affordability.
HAND: Can you tell us about Embolden Real Estate and about how you landed in the real estate development industry?
RS: Embolden Real Estate is the company that I founded in 2021, a development firm with consulting services related to project management, entitlements, and community engagement. The name of my company came to me when I was reading a book on education, as I’ve always wanted to work at the intersection of housing and education to improve educational outcomes.
I landed in the industry of real estate by way of an undergrad professor Joseph E. Corcoran at Boston College, who was a successful developer and a pioneer of mixed-income housing. I had returned from a summer service trip to Jamaica and was interested in ways to improve the infrastructure in the remote town I volunteered in. Coincidentally, I took his class and realized that real estate development was a great tool to address infrastructure issues such as roads, homes and schools.
HAND: What excites you about working in the real estate development industry?
RS: I am excited about how every day in real estate development is different and how many hats you must wear, from project management, financing, design, construction, property management and sometimes even a social worker. As a person who gets bored easily, I love that it’s always changing and keeps you on your toes. I also love that you can see the result of your hard work just by walking past projects you have completed.
Knowing that you’re providing families a home, a place to create memories, a place to feel safe, and a place to grow is very rewarding and motivating.
Ronette “Ronnie” Slamin, founder of Embolden Real Estate
HAND: Keeping in mind the history of racism and its impacts on housing, how can leaders of color or, more specifically, women leaders of color in the real estate industry move the needle in a different direction?
RS: The history of racism in the housing industry is a painful reality with deep-rooted impacts that continue to be felt today. I think as an industry, we can move the needle in the right direction by being intentional about creating diverse work cultures and pushing for affordable housing to be in high opportunities neighborhoods.
As a woman of color, I believe we need to be intentional about creating a welcoming space for women and people of color, and by doing so, we will create a welcoming space for all. Research shows that women usually take on more family and household responsibilities. As an industry, we can make an effort to support women by scheduling events at different times (not always in the evening), offering better benefits, and flex work from home. To support people of color in the industry, I think it first starts by increasing exposure to the field. The real estate field is an unknown industry to many, so I think we will start seeing more diversity by creating that exposure and awareness of the opportunities.
HAND: Do you believe there is a “secret sauce” to addressing housing affordability and creating more equitable communities in our region? If so, what do you think that is? What do you think is the most significant obstacle?
RS: I don’t think there’s a secret sauce, but I would say I think it requires creativity and collaboration. Housing affordability is a huge issue that will not be fixed overnight and requires different tools based on the deal. I think if we can work together we will be able to have a huge impact. I would consider the largest obstacle to be marketing and optics. I think the word affordable housing has just become such a loaded term, and with many definitions, we often do not realize that we may not be talking about the same thing. When you mention the word affordable housing, you can sometimes raise red flags where, even if many in the community would qualify for that affordable housing. So, I think marketing needs to explain the affordability levels, the quality, and the great positive outcomes that can come from affordable housing.
HAND: What is your “why”? What keeps you motivated to continue your work in this space?
RS: I stay motivated to work in affordable housing because of its impact on residents and communities. Knowing that you’re providing families a home, a place to create memories, a place to feel safe, and a place to grow is very rewarding and motivating.
HAND: What might you be doing if you weren’t working in this industry?
RS: I would probably be in the sports industry if I were not in real estate. I was working towards being a sports broadcaster or agent before taking that real estate development class in college.
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