Construction of affordable townhomes with a community planning group reviewing final plans supported by a revolving gap fund.
Cabarrus County, North Carolina, August 28, 2025
Cabarrus County seeded a $2 million Revolving Construction Loan Gap Fund to help nonprofits and social ventures finish affordable and workforce housing projects. Managed by a local housing nonprofit, the fund offers short-term, low-interest loans (1%–3%) to cover final construction gaps so projects can proceed. A Permanent Housing Committee of nonprofit leaders, developers, community members and lenders will review requests with technical support from a local bank. The fund is designed to revolve as loans are repaid and to grow with grants and donations, addressing a significant local housing shortfall amid rapid population and rent growth.
Cabarrus County has launched a Revolving Construction Loan Gap Fund seeded with $2 million to help nonprofit groups and social ventures finish affordable and workforce housing projects. The fund, run by a local housing nonprofit, will offer short-term, low-interest loans of about 1% to 3% to cover the final few dollars needed to break ground or complete construction.
The new fund is built to be revolving, meaning loan repayments are returned to the pool to help finance future projects. Loans are short-term and intended to fill the construction gap—not to cover all costs. Compared with typical construction loan gap rates that often sit between 5% and 8%, the fund’s 1% to 3% rates are designed to make a meaningful difference for smaller developers and nonprofits that struggle to get favorable terms from banks.
Applicants will apply through the housing nonprofit operating the fund. Loan approvals will not rely solely on a bank decision. Instead, a local Permanent Housing Committee made up of nonprofits, housing developers, community members and lenders will review requests and make funding decisions. A regional bank will provide technical support to that committee. The committee-based review is intended to give smaller, mission-driven groups a fair chance when traditional lenders may see too much risk.
The fund’s backers expect it to grow over time through interest repayments, additional government grants, private investments and donations. The county’s $2 million seed keeps the fund active from the outset and allows it to start underwriting gap loans quickly.
Cabarrus County has seen fast population growth in recent years. Nearly 245,000 people now live in the county, with roughly 46% of that population in the county seat. That city’s population tops 112,300 and grew by almost 7% between 2020 and last year. Over the last decade the city has grown by about 33%, placing it among the state’s largest cities by percentage growth.
A recent regional analysis projects the county among the top 10 in the state for population growth trends between 2024 and 2029. That study also estimated a local housing supply gap of more than 15,300 homes for sale and rent combined. For households at 80% of area median income (AMI) or lower, the gap included an estimated 1,267 homes for sale and 2,691 rentals. For a family of four, 80% of AMI is an income below about $89,750.
Local income and housing cost figures show strain. The county’s median household income sits at roughly $86,084, and about 27% of the county’s roughly 20,341 homes are considered cost-burdened, meaning residents pay more than 30% of their income toward housing. Average rent in the city is over $1,500, and year-over-year rental increases in the county are among the highest in the state.
The nonprofit operating the fund has already completed and started several projects in the city. A recent townhome project opened with 26 for-sale and lease-to-own units. The group also purchased a historic church and is converting it into a mixed-income development that includes community and artist space, with construction already underway. Work is also moving forward on a planned tiny-home village in downtown.
Another local nonprofit is developing a multi-phase campus on about 10 acres of an old textile mill site to provide transitional housing and services. That project will include several apartment buildings, a program center that will act as a day care, retail and commercial space to create jobs and health services, and training programs aimed at helping residents move into stable housing over a three- to five-year period. The full project is estimated at about $13.5 million and is expected to take several years to complete.
Nonprofits and social ventures working to build affordable or workforce housing in the county can apply through the housing nonprofit that manages the fund. Loans are meant to cover the last costs that allow construction to proceed. Decisions will be reviewed by the Permanent Housing Committee with bank technical support. Repayments are expected to return to the fund so it can lend again.
The new $2 million seed fund offers a flexible, community-led tool to close the last financing gap for housing projects that increase the supply of affordable and workforce homes. With rising construction costs and fast population growth, local leaders are positioning the fund as a short-term, low-cost bridge to get projects built and help stem affordability pressures in the county.
Nonprofits, community groups and social ventures building affordable or workforce housing in the county are eligible to apply through the managing housing nonprofit.
Loans are short-term and offered at low interest rates, generally between 1% and 3%. They are meant to fill final construction gaps rather than fund entire projects.
A local Permanent Housing Committee made up of nonprofits, housing developers, community members and lenders reviews and approves loans, with technical support from a regional bank.
No. The fund is designed to cover the last portion of financing needed to start or finish construction so projects can move forward.
Repayments are returned to the fund to support future loans. Planners also expect to add to the fund with government grants, private dollars and donations.
By helping complete affordable and workforce housing projects, the fund aims to increase supply and reduce pressure on rents and home prices over time.
| Feature | Details |
|---|---|
| Seed funding | $2,000,000 from county allocation |
| Fund type | Revolving construction loan gap fund |
| Loan term | Short-term bridge loans |
| Interest rate | Approximately 1%–3% |
| Typical market comparison | Construction gap loans often range 5%–8% |
| Approval process | Decisions by a Permanent Housing Committee with bank technical support |
| Eligible applicants | Nonprofits and social ventures building affordable and workforce housing |
| Primary goal | Provide the last dollars needed to proceed with construction and increase affordable housing supply |
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