Brief warns cuts to CDFI Fund could harm local economies

"CDFIs are mission-driven lenders that balance financial sustainability with a focus on borrowers and markets that fall outside conventional underwriting standards. It's a business model that channels private investments into what communities need, ranging from disaster recovery to affordable housing for seniors and veterans."

"According to Treasury data cited in the report, each dollar of CDFI Fund financial assistance historically has leveraged about $8 in private investment. Since its inception, the fund's awards have helped catalyze hundreds of billions of dollars in private capital for low- and moderate-income communities."

"The brief urges Congress to maintain stable funding and regulatory support for the CDFI Fund, arguing that predictable federal backing allows CDFIs to make long-term commitments. Though modest in size, federal investment in CDFIs is catalytic, drawing significantly larger amounts of private capital into underserved communities."

Community Development Financial Institutions (CDFIs) operate as mission-driven lenders balancing financial sustainability with serving borrowers and markets excluded from conventional lending. The federal CDFI Fund, established by Congress in 1994 and administered by the U.S. Department of the Treasury, certifies CDFIs and manages programs including the New Markets Tax Credit and Capital Magnet Fund. Treasury data demonstrates that each dollar of CDFI Fund assistance has historically leveraged approximately $8 in private investment, catalyzing hundreds of billions in private capital for low- and moderate-income communities since inception. The CDFI model channels private investments into community needs spanning disaster recovery, affordable housing for seniors and veterans, and other underserved sectors. Banks serve as major CDFI investors, often fulfilling Community Reinvestment Act obligations. Congress continues supporting stable CDFI Fund financing, recognizing that predictable federal backing enables long-term community commitments despite the fund's modest size relative to its catalytic impact.

Read at www.housingwire.com