WASHINGTON, Sept. 30, 2022 (GLOBE NEWSWIRE) — The U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) today announced that the Treasury has agreed to issue three guarantees totaling $355 million of dollars under the Community Development Financial Institutions (CDFI) Obligation Guarantee Program. The guarantees will be issued in the name of five eligible CDFIs under the program fiscal year 2022. A total of more than $2.167 billion has been guaranteed since the inception of the CDFI Bond Guarantee Program, which provides long-term fixed rate capital for projects in low-income urban, rural and Indigenous communities.
“Today’s announcement marks a banner year for the CDFI Bond Guarantee Program,” said Jodie Harris, CDFI Fund Manager. “The $355 million bond issue announced today is the largest in the program’s history. Today is also a good time to reflect on the significant impact this important long-term capital is having on low-income communities across our country – of the more than $2.167 billion approved, more than $1.4 billion dollars in cumulative investments have already been disbursed by this program since its launch in 2013.”
Fiscal 2022 program participants include:
Community Reinvestment Fund, United States will issue a $100 million bond in the name of the Low Income Investment Fund (LIIF). LIIF plans to use the proceeds of the bond to fund charter schools, rental housing, child care centers and other qualifying uses. This is the third bond issue in LIIF’s CDFI bond guarantee program, having also been part of bond guarantees in 2014 and 2016.
InBank, a new qualified issuer, will issue a $125 million bond in the name of Capital Plus Financial, to provide single-family mortgage financing and property rehabilitation to low-income Hispanic communities in the state of Texas through the Class of CDFI assets to Financing Entity.
Opportunity Finance Network will issue $130 million in bonds on behalf of the following three eligible CDFIs:
- Community Ventures (CVEN) will receive a $10 million bond loan to fund small businesses and single-family mortgages, the latter through the CDFI to Financing Entity asset class. CVEN was a previous beneficiary of a bond guarantee in 2015.
- The Charter School Development Corporation will receive a $70 million bond loan to fund charter schools.
- The Greater Minnesota Housing Fund (GMHF) will also receive a $50 million bond loan to finance rental housing in the state of Minnesota. GMHF received two prior bond guarantees in 2017 and 2019.
Established by the Small Business Jobs Act of 2010, the CDFI Bond Guarantee Program addresses a critical market need: low-cost capital to spur economic growth and kick-start community revitalization. Under this program, qualified issuers (CDFIs or their delegates) apply to the CDFI Fund for authorization to issue covered bonds with a total value of at least $100 million. Bonds provide CDFIs with access to significant long-term, fixed-rate capital to revive the economies of struggling communities.
The program enables CDFIs to execute large-scale projects including the development of commercial real estate, housing units, charter schools, daycare or health centers and rural infrastructure projects, among other asset classes. As of August 31, 2022, more than $1.4 billion in bond proceeds had been disbursed across 32 states and the District of Columbia.
About the CDFI Fund
Since its inception in 1994, the CDFI Fund has awarded more than $5.5 billion to CDFIs, community development organizations and financial institutions through: the Bank Enterprise Award program; the Capital Magnet fund; the CDFI rapid response program; the Community Development Financial Institutions Program, including the Healthy Foods Financing Initiative; the Economic Mobility Corps; the financial education and counseling pilot program; the CDFI Native American Assistance Program; and the Small Loans Program. In addition, the CDFI Fund allocated $66 billion in tax credit allocation authority to community development entities through the New Markets Tax Credit program, and closed covered bonds for more $2.1 billion through the CDFI bond guarantee program.
To learn more about the CDFI Fund and its programs, please visit the CDFI Fund website at www.cdfifund.gov.
Community Development Financial Institutions Fund, United States Department of Treasury