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InvestUP is partnering with developers, lenders and government to increase workforce housing across the region.

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InvestUP is partnering with developers, lenders and government to increase workforce housing across the region.


Build U.P. Development Objectives: Investment decisions made by Build U.P. shall be guided by the following objectives, which are not prescriptive (i.e., mandates without exception) but are rather intended to serve as preferences designed to guide decision-making and best practices for investment decisions:
  1. To invest a significant proportion of program funds into newly created or newly redeveloped housing.
  2. To focus on developments that are effectively shovel ready.
  3. To ensure, to the extent that is appropriate and feasible, an equitable geographic distribution of investment across the Upper Peninsula.
  4. To support developments that grow and retain regional population.
  5. To support developments that can demonstrate a relationship to meaningful job growth and retention.
  6. To support terms that incentivize local lenders, municipalities, and developers to participate in a project.
  7. To support projects where a local community is supportive and willing to invest in the development.

Build U.P. Investment Products:

Build U.P. offers the following two products to lenders, municipalities, and developers for regional housing projects. Each product is conditioned on an applicant entering into final and complete program documents acceptable to Build U.P. The Build U.P. Board may amend or expand product offerings, including new program offerings, in the future if other development objectives should be met. 

Cash Collateral Program

Intent: The Cash Collateral Program is designed to address collateral shortfalls that would otherwise not allow a qualified lender to provide financing for new housing or rehabilitated housing development in the Upper Peninsula of Michigan. The Cash Collateral Program is intended to address these shortfalls by enhancing the collateral coverage of eligible borrowers. The cash collateral award will cover all, or a portion of, a calculated collateral shortfall as described by the qualified lending institution. Qualified lenders that identify a potential eligible borrower with a collateral shortfall can make application through Build U.P. and, if approved, Build U.P. will deposit money into an interest-bearing deposit account with the qualified lender and this account will be pledged as collateral on behalf of the eligible borrower. Definitions: Qualified Lenders: Qualified lenders under this program would include: FDIC regulated banks, NCUA regulated credit unions, CDFIs, and lenders regulated by Farm Credit Services that do business in the Upper Peninsula of Michigan. Eligible Borrowers:  An eligible borrower must be engaged with a qualified lender for the purpose of this program and meet the lending requirements of the qualified lending institution. Program Principles:
  1. The cash collateral award must be used to address collateral shortfalls within a qualified lenders loan structure to complete shovel-ready projects located in the Upper Peninsula.
  2. Shovel-ready projects are projects that satisfy development objectives and are expected to start within 18 months of approval.
  3. Projects are expected to have local municipal support, including but not limited to resolutions in support of the project; in-kind support for the project; financial support for the project; and expedited plan review and permitting.
  4. Projects with the highest number of units to be rehabilitated or newly constructed will be given priority for investment.
  5. For rehabilitation projects, those projects with the greatest number of housing units available for occupancy, which have not been previously occupied within the last 18 months, will be given priority.
  6. Eligible borrowers are required to have at least 10% equity in the project substantiated by the eligible lender requesting the collateral support.
  7. Eligible borrowers with successfully completed housing developments in the region will be given priority.
  8. The maximum size of each cash collateral award for an eligible borrower for a single project cannot exceed 10% of total project costs (based on the lessor of total project costs or appraised value), with a minimum size of $50,000 and a maximum of $1,500,000 per award. (a). For projects assisted with public forms of financing (grants, loans, and tax increment financing), the cash collateral amount shall be determined by the participating qualified financial institution that is willing to provide financing to the project, but for the lack of eligible borrower collateral. Total collateral support shall be subject to the limits described in policy (7.) above unless the qualified financial institution and Build U.P. agree that the project merits a maximum size of the award as a percentage of the project greater than 10%. But in no case shall an award be more than $1.5 million.
  9. An up-front program fee of 1% of the award shall be paid by an eligible borrower to Build U.P. at time of loan closing. Each year thereafter, a 1% annual fee will be charged to an eligible borrower based on the balance of the cash collateral deposit account.
  10. The cash collateral award shall be held by the qualified lending institution in an interest-bearing deposit account in the name of Build U.P. as collateral for the loan. Build U.P. shall receive a basis point upward adjustment from the qualifying lending institution’s current stated rate for a deposit account.
  11. The qualified lender shall service 100% of the loan.
  12. A cash collateral third-party pledge agreement satisfactory to Build U.P. shall be prepared as part of this transaction.
  13. If the loan or project goes into liquidation, all avenues of collection must be exhausted prior to offsetting the cash collateral account for any shortfalls as provided in the third-party pledge agreement.
  14. The reduction process shall require that the qualified lender, on an annual basis, submit to Build U.P. reconciliation of the loan, showing all principal and interest payments made during the year.
  15. To maintain the original loan-to-value ratio, the cash collateral account balance will be reduced, and funds returned to Build U.P. based upon how much principal is paid annually. When the loan is paid off, or if the project property is sold or otherwise transferred, the cash collateral account must be released immediately back to Build U.P.
  16. The decision to offer collateral assistance under this program is the sole discretion of Build U.P., which reserves the right to reject any application.
  17. Interested, eligible borrowers should contact qualified lenders or Build U.P. for application requirements.

Residential Infrastructure Program:


The Residential Infrastructure Bond Program (Program) is designed to provide financial assistance to local units of government in the Upper Peninsula to facilitate infrastructure improvements leading to the construction of new residential developments in the community. Build U.P. will provide this assistance through the purchase of municipal bonds issued by local units.


Eligible Entities: An eligible entity under this program shall be any county, city, village or township located within the Upper Peninsula of Michigan that has municipal bonding authority and capacity.

Eligible Infrastructure: Eligible Infrastructure shall be given a broad definition but shall include water and sanitary sewer; wastewater treatment and storm sewers; road improvements; and utility placement including gas, electric and fiber lines. Eligible infrastructure must lead to construction of redeveloped or new residential developments in participating communities.

Program Principles:

  1. An eligible entity will issue a municipal bond under the appropriate State of Michigan laws and charter authorizations to finance eligible infrastructure projects.
  2. Build U.P. will invest funds to purchase bonds from eligible entities.
  3. The proceeds from Build U.P.’s purchase of those bonds will be used to finance eligible infrastructure projects.
  4. A bond purchased by Build U.P. shall be no less than $250,000 and no more than $1.5 million.
  5. The term of the bond purchased by Build U.P. under this program will be no longer than 15 years, with annual payments of principal and interest, and interest rates not to exceed 2%.
  6. Repayment to Build U.P. will be made by the eligible entities through any legal method of bond repayment, including special assessments, tax capture districts, local transportation revenue, enterprise revenues or general taxes.
  7. The timely payment of principal and interest by the eligible entity on the bond purchased by Build U.P. will be secured by the pledge of the limited tax, full-faith, and credit of the eligible entity.
  8. An eligible entity shall be responsible for the cost to document and issue the bonds to Build U.P., including bond counsel fees. However, those costs may be financed with the bond.
  9. Any purchase of a bond under the program is subject to satisfactory due diligence of the eligible entity and its ability to repay the bond. To help reduce the financial burden on the eligible entity, Build U.P. shall provide model documents and assist in identifying bond counsel if desired by the eligible entity.
  10. The decision to purchase a bond under this program is in the sole discretion of Build U.P., which reserves the right to reject any application.
  11. Interested eligible entities or developers should contact Build U.P. for application requirements.

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