Investment by community development finance institutions (CDFIs): Residential property investments
SI2003/9 Schedule 1(7)
There are restrictions on the amount of investment that an accredited CDFI can make in enterprises that acquire, construct, develop or hold interests in property:
- investment of money raised under the CITR scheme in residential property is prohibited outright (see below), and
- the extent to which investment in non-residential property is regarded as a relevant investment is limited (see CITM3092).
There are examples of property-related investments and how they would be categorised in CITM3094.
CDFIs are not permitted to use money raised under the CITR scheme to invest directly or indirectly in residential property and any CDFI that does so jeopardises it accredited status - see CITM2120. Investment of funds raised outside of the CITR scheme is not restricted in this way.
Any investment that directly or indirectly funds the acquisition, construction or development of residential property is not a relevant investment for the purposes of SI2003/96 Regulation 8 (see CITM3030).
For these purposes residential property includes most buildings that are used as, or which are suitable for use as, a dwelling. These would include live/work units, whose design is intended to provide flexible accommodation that can be used for residential, business or mixed purposes.
Annex D of the Department for Business, Energy & Industrial Strategy’ (BEIS’s) “Material Concerning the Accreditation of Community Development Finance Institutions” (see CITM2130) includes a full definition of residential property, including details of certain specialised uses and whether or not each is regarded as use as a dwelling. The table below summarises the relevant Annex D material.
|Used as a dwelling||Not used as a dwelling|
|Boarding accommodation for students/pupils||Children’s home|
|Residential accommodation for armed forces||Home/institution providing residential accommodation with necessary personal care to persons who are elderly, disabled, suffering from a past or present drink/drug dependence or mental disorder|
|Monastery, nunnery||Hospital or hospice|
|Institution that is sole/main residence for at least 90% of its residents||Prison|
|Hotel or Inn|
Note that where an institution or home is providing residential accommodation to those in need of personal care, it only falls outside the definition of “dwelling” if the necessary personal care is provided along with the accommodation.
For example, an “extra care sheltered housing” development (“very sheltered housing” development) where some meals and personal care were provided alongside the accommodation would not be regarded as being in use as a dwelling. But sheltered accommodation where no personal care was provided would be regarded as being in use as a dwelling, albeit that there may be a warden available on whom the residents could call in an emergency.