Edmonton housing fund uses values-aligned, blended financing to create affordable homes

The prime minister’s housing mantra may be, “Build, baby, build” but one Canadian non-profit argues it’s not just about building more homes, it’s about building the right kind. 

“Larger families actually wait the longest for affordable housing,” said Omar Yaqub, who serves the team at IslamicFamily.

After years of housing research with the Halal Housing Lab, the organization found a shortage of affordable two-bedroom homes, leaving many larger families overcrowded or priced out.

In response, IslamicFamily has launched the Housing Prosperity Fund, designed to test a different approach to affordable housing in Edmonton.

The approach combines family-focused housing, values-aligned finance, and community-based giving with long-term sustainability.

“Do we, by default, think about charity as a quantity game or a quality game?” said Yaqub.

The organization secured land in Edmonton, where construction is underway for Diamonds of Dunluce, an affordable housing development with half of the homes priced at least 20 per cent below market rent for 40 years

The project also targets multi-generational households, as larger families wait an average of four years for affordable housing, Yaqub said.

Incentives often encourage developers to prioritize smaller units, he added.

“If we optimize for building for larger families, we house 20 to 40 per cent more people on the same square footage,” he said.

Blended funding approach

Along with the design, the Housing Prosperity Fund is also using a different way to finance its project.

The fund uses a blended financing model through investment, lending and community-based giving.

Its partnership with SVX, is built around equity and profit-sharing rather than loans. 

“Each layer lowers the overall cost of capital, and that is precisely what keeps rents affordable while keeping the project financially sound,” said Adam Spence, CEO and director of SVX, which shares ownership of the project. 

“Blending also lets everyone participate at the level of risk and return they can accept, from a donor to an accredited investor,” Spence added.

For Yaqub, that flexibility is especially important because conventional financing is a barrier to community-led housing projects.

“We can’t build without finance,” Yaqub said. “But conventional debt locks us out.”

The fund is rooted in Islamic finance principles but follows a structure familiar to impact investors.

“Conventional real estate finance runs almost entirely on debt and interest,” said Spence.

“That works for many projects, but it excludes Muslim organizations and investors whose principles prohibit interest and leaves a whole pool of capital on the sidelines while housing needs keep growing.”

Instead of earning fixed interest, investors share ownership in the housing asset and receive returns based on the project’s actual income.

Creating affordable housing isn’t just about finding the money to build it, Yaqub said. 

It’s also about making sure those homes can stay affordable and supported for the people who live there.

The goal is for the model to be used in future housing projects across Canada, with places in Halifax and Mississauga already exploring options. 

“The amount of effort we put into this project is too much for a single project,” said Yaqub.

“The deeper lesson travels well beyond Muslim communities. Any community with housing need, local trust, and a credible project can assemble a blended capital stack around its own values,” said Spence.