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.