Microsoft announced the first loan it will grant as part of its $500 million affordable housing initiative Thursday, seven months after launching the program.
The software giant will provide a $60 million, 15-year loan at below-market interest rates to the King County Housing Authority, an independent organization established by Washington State to manage affordable housing and provide other services. King County contains Seattle and Redmond, Wash., where Microsoft is headquartered.
Microsoft’s capital, along with funding from the county and Housing Authority, brings the total to $245 million. The funds will allow King County Housing Authority to buy five residential apartment complexes in Kirkland, Bellevue, and Federal Way. Taking ownership of the 1,029 apartments will ensure they stay affordable for low- and middle-income residents, Microsoft says.
“Because of their location, these affordable properties were at high risk of experiencing rapidly escalating rents or redevelopment as higher-cost housing,” the company said in a press release.
In January, Microsoft said it would dedicate $500 million to fund construction of affordable homes and homeless services in the Seattle region in an effort to alleviate a growing housing crisis driven by the city’s tech boom. King County estimates that the number of affordable rental homes for low- and middle-income families has decreased by 36,000 in the region. Rents increased 43 percent between 2012 and 2017.
The affordable housing fund is the largest philanthropic pledge in Microsoft history. The tech giant is providing $475 million in loans to affordable housing developers over three years and donating another $25 million in grants for homeless service providers.
Although Thursday’s announcement marks the first investment from Microsoft, the company has already started donating grants as part of the initiative. In June, Microsoft donated $5 million to a new affordable housing fund launched by Plymouth Housing.