Retired teacher from Preston among investors facing substantial losses after failure of Grand Designs host's housing venture
The presenter, who has fronted the Channel 4 housing programme for two decades, has been urged to apologise after people who bought bonds were told the "best case" scenario was a 74 per cent loss but that investors could lose up to 97 per cent of their cash.
Mr McCloud launched Happiness Architecture Beauty (HAB) in 2007 and it has since been involved in several housing developments.
Several million pounds were raised through "mini bonds" sold to investors in 2017 with the potential for 8% returns annually over five years.
But earlier this month, buyers of the bonds were told in a letter that an independent review of finances found they face significant losses.
Mr McCloud resigned as a director of HAB Land Ltd on February 16 2018 and control of the company was acquired by another firm, BAH Restructuring Limited, in March this year.
The letter to investors says bondholders can expect a return of between "26 pence and 3 pence for every £1 of bond monies invested", after the completion of projects at Kings Worthy, near Winchester, and Cumnor Hill near Oxford.
One investor said she only learned that Mr McCloud had resigned as a director after receiving the letter, which outlined changes to HAB Land's management.
Gill Mascord, a 64-year-old retired teacher who invested £3,000, said the letter came "out of the blue".
"I realised it was slightly risky (to invest) and that there was a chance of anything like that, that you can lose the money, but it (the reason for investing) was mostly because Kevin McCloud was involved in it," Ms Mascord, from Woodplumpton, near Preston, Lancashire, said.
She said she was also attracted by HAB's principles, listed on its website as "sustainability" and creating "healthy towns and communities".
Ms Mascord received interest payments for the first two years, but said she had no idea the company was struggling and has called for Mr McCloud to apologise.
"It just seemed like a worthwhile development," she said. "And I suppose it seemed like it had got good backing from an expert in the field."
Mr McCloud said in a statement to the Guardian he stands "shoulder to shoulder with those who have lost money".
"I will of course do everything in my power to improve the current situation," he said.
Another unnamed investor told the paper: "I'm disappointed that what I saw as an idealistic project seems to be collapsing on a sour note, with the original directors having departed and investors seemingly left to bear the entire financial burden of a failed enterprise."
The revelation is the latest controversy to hit the business, after reports in March that the 50-home development at Kings Worthy was beset by delays and "snagging issues", with Mr McCloud apologising at the time.
Representatives for Mr McCloud did not respond to requests for comment.