Hilltop Encanto, LLC

What They Do

Hilltop Crossing, from Hilltop Encanto, LLC (Hilltop), is an initiative of longtime San Diego developers Ito Girard & Associates and La Jolla MJ Management to bring forty-seven homes in the Hilltop Crossing project on the northeastern corner of Hilltop Drive and Euclid Avenue in the Encanto community of San Diego.

Hilltop’s goal is to develop attainable homes for middle-income workforce families, also known as the “missing middle,” in order to help them build generational wealth through homeownership.

The “missing middle” includes public service providers such as teachers, nurses, and first responders who typically earn between $55k to $65k per year. Taking care of the “missing middle” is especially challenging in California due to the high cost of land and construction. San Diego’s attainable housing market consists mainly of rental units and offers little assistance to single-family homebuyers.

Hilltop is particularly focused on covering closing costs and down-payment assistance for first-time homebuyers and BIPOC communities.

San Diego natives Robert Ito—a former workforce development professional and social worker and Roxanne Girard—a retired banker—of Ito Girard & Associates, and former City Manager of San Diego Jack McGrory of La Jolla MJ Management saw the need beyond jobs to strengthen the “missing middle” and that attainable homeownership has to be a part of the holistic solution.

“Even living-wage jobs are not enough if half of someone’s income goes to rent,” Robert said.

By giving low- to middle-income families an opportunity to buy their first home at an affordable price and remain in San Diego instead of having to move to distant suburbs, the Hilltop Crossing development can bring about less time on the freeway, less pollution, and more quality time families can spend with their loved ones.

Hilltop Crossing is one of a few projects where a multi-family affordable housing developer (Affirmed Housing) and a single-family market-rate housing developer are developing mixed-residential projects on adjacent sites.

Why We Invested

Robert first learned about Mission Driven Finance while serving on the board of the Asian Business Association of San Diego. He saw clear mission alignment between his firm and Mission Driven Finance in advancing economic opportunity.

Having capital early on will better Hilltop’s chances of a favorable construction loan, which is an issue for local infill developers that do not have as much capital on-hand to cover upfront costs like engineering, architectural, and permits.

Conventional lenders rarely provide capital this early in the process, leaving developers to go out and borrow from hard-money lenders at much higher interest rates. This pre-development loan could serve as a model for investment by other social impact investors for other attainable and affordable homeownership projects.

Updates

09/2022 — Hilltop Encanto LLC successfully repaid the second loan.

05/2022 — On May 13, developers Robert Ito, Roxanne Girard, and Jack McGrory broke ground on this development. Chief Investment Officer Louie Nguyen and many elected officials helped celebrate this development by sharing why it is important to them and the communities they serve.

02/2022 — Mission Driven Finance has approved a second loan to Hilltop Encanto LLC to better their chances of a favorable construction loan, often an issue for affordable housing developers that do not have as much capital to cover upfront costs. Hilltop’s current construction buildout is on schedule—currently about a third through phase 1—and they expect to receive their second construction loan in five months to enter phase 2 in June 2022.

11/2021 — The pre-development loan has been repaid and construction has begun.