Habitat’s MicroBuild® Fund 1
The world’s first impact fund dedicated to affordable housing finance.
Home improvements are often among a family’s most important investments. A stronger roof, finished floor, a private toilet or an extra room can improve health, safety and opportunity for years to come. But many low-income households lack access to affordable, formal financing options that could help them make critical improvements sooner and more safely.
Created as the world’s first impact fund focused exclusively on affordable housing finance, Habitat for Humanity’s MicroBuild Fund 1 helped address that gap by partnering with financial institutions that serve low-income households. Through investment capital and technical assistance, MicroBuild 1 enabled these institutions to offer or expand their loan products for home construction, improvements and land-related investments.
“With expanded space, our lives have taken on a new dimension, where my children and I can thrive.”
Najareen, Housing loan borrower (India)
From its launch in 2012 to its scheduled close in 2025, the MicroBuild Fund 1 helped more than 235,000 families across 33 countries to access affordable housing finance loans.
$100 million
original fund capitalization
$230 million
disbursed through new and renewed loans
62 financial institutions
supported
1.18 million
people benefiting from improved housing
Beyond the fund’s direct investments, participating institutions mobilized an additional $1.26 billion to expand their housing-finance portfolios, demonstrating that affordable housing finance can attract capital at a much larger scale.
MicroBuild Fund 1 showed that financial institutions can sustainably serve lower-income households with housing loans designed around their needs and circumstances, delivering benefits across the housing finance sector.
For families
Meaningful, self-directed home improvements are possible when loan products are scoped to households’ needs and circumstances.
For investors
There are opportunities to sustainably deploy capital into underserved markets while supporting measurable housing outcomes.
For financial institutions
Housing loan products can help financial institutions meet a significant client need while building strong overall portfolios.
How MicroBuild Fund 1 worked
MicroBuild Fund 1 provided debt financing to financial institutions serving lower-income households. Those institutions used the capital to offer housing loans that enabled families to improve or build their homes according to their needs, with greater financial capacity.
MicroBuild Fund 1 provided debt financing to financial institutions serving lower-income households. Those institutions used the capital to offer housing loans that enabled families to improve or build their homes according to their needs, with greater financial capacity.
Operating model of MicroBuild Fund 1, 2012–2025.
The fund paired financing with technical assistance from Habitat’s Terwilliger Center for Innovation in Shelter. Support included market research, housing-product design, staff training, and consumer education, particularly around construction considerations and energy efficiency improvements.
Beyond capital: Building institutional capacity
MicroBuild’s success was not driven by financing alone. Early in the life of MicroBuild 1, Habitat recognized that financial institutions often needed specialized support to design and manage housing-loan products that fully responded to families’ needs.
Alongside the fund’s investments, Habitat delivered tailored support to 52 of the fund’s 62 participating financial institutions, including training staff, improving product design and building the internal systems needed to manage their housing portfolios. Ultimately, these improvements helped institutions offer housing finance products that better matched families’ priorities and housing needs.
MicroBuild’s success was not driven by financing alone. Early in the life of MicroBuild 1, Habitat recognized that financial institutions often needed specialized support to design and manage housing-loan products that fully responded to families’ needs.
Alongside the fund’s investments, Habitat delivered tailored support to 52 of the fund’s 62 participating financial institutions, including training staff, improving product design and building the internal systems needed to manage their housing portfolios. Ultimately, these improvements helped institutions offer housing finance products that better matched families’ priorities and housing needs.
Stronger housing portfolios
Well-performing lending
Better terms for borrowers
89% reported that their housing portfolios performed as well as or better than their general lending portfolios.
More than 80% of responding institutions reported that their housing portfolios grew following MicroBuild 1’s support.
78% reported improving housing-loan terms, including greater affordability, lower interest rates and longer repayment periods.
Findings from the MicroBuild Fund 1 End-of-Fund Investee Survey. Response totals varied by question.
Responding institutions reported that housing lending helped them attract new clients, deepen their social impact, strengthen client loyalty and diversify their portfolios. The share of institutions describing housing finance as a flagship product line increased from 11% before MicroBuild’s support to 41% afterward.
“This type of loan has helped us position ourselves as more than a credit provider, but to be considered as a partner in family wellbeing.”
MicroBuild 1 investee institution
Recognition
MicroBuild Fund 1 received international recognition for its innovative approach to expanding affordable housing finance:
MicroBuild Fund 1 received international recognition for its innovative approach to expanding affordable housing finance:
Recognizing the fund’s contribution to expanding access to finance
Naming MicroBuild Fund 1 one of 10 winning initiatives recognized for nonprofit innovation
Recognizing MicroBuild Fund 1 for its innovative and sustainable approach to the global housing crisis
Contact us
For questions about MicroBuild Fund 1 or Habitat’s ongoing affordable housing finance work, email [email protected].
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The Terwilliger Center for Innovation in Shelter is a specialized unit within Habitat influencing and strengthening housing systems worldwide. Established in 2016 through a transformational gift from J. Ron Terwilliger, Habitat’s Terwilliger Center works to make housing markets more inclusive so that low-income families can build and improve their homes safely and affordably.
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Habitat’s MicroBuild Fund supports microfinance institutions with the capital and technical expertise necessary to increase the availability of housing loan products for low-income customers. See the real-world impact of the MicroBuild Fund’s investments and milestones reached in the latest annual report.