Recoverable Grants
This type of grant usually
assists a CDC in the very early stages of a real estate project prior to the
commitment of construction or permanent financing. While LISC expects to
be fully repaid, these recoverable grants can be forgiven, if necessary, if the
development plan is not successful or is abandoned.
Typical costs covered
by a pre-development grant include services of a development
consultant, architect, engineer, surveyor and attorney, and for an
environmental assessment, marketing plan, feasibility study, or tax credit
application.
One variation on the typical recoverable grant is a revolving
recoverable grant, which serves as a predevelopment line of credit for groups
that are developing a number of properties and need a constant source of
predevelopment funds up front.