The Local Initiatives Support Corp. said it has started the first real estate investment trust to focus on affordable housing and community development.

The new REIT, Community Development Trust, closed a $29 million private placement of common stock on Tuesday. Among the 17 financial institutions investing in the trust were Allstate Insurance Co., Bankers Trust Co., Fannie Mae, and Washington Mutual Inc.

The REIT will help banks meet their Community Reinvestment Act requirements by purchasing fixed-rate mortgages.

The nonprofit group said the REIT would maintain the properties it invests in as affordable housing rather than try to convert them to middle- income or luxury housing.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.