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Two finance partners for community development financial institutions, or CDFIs, secured guarantees from the US Treasury Department’s CDFI Bond Guarantee Program for $498 million in new bond issuances.
Community Reinvestment Fund, a Minneapolis-based CDFI, will issue bonds of $325 million on behalf of three other community lenders. Among the lenders that will deploy the proceeds of the bonds are Community Development Trust, a CDFI and public real estate investment trust that will use $150 million to invest in charter schools and affordable housing. Chicago-based IFF will secure $75 million to invest in real estate, charter schools, community nonprofits and day care facilities in 10 Midwestern states. The Reinvestment Fund in Philadelphia will secure $100 million for similar projects in its hometown, Baltimore and Atlanta.
Opportunity Finance Network, a CDFI finance intermediary, will facilitate a total of $173 million in bond loans to seven of its network members. The OFN members participating in the bond proceeds include the Greater Minnesota Housing Fund, which is focused on affordable housing preservation and renovation, and supports developers of color in the sector. New York-based Nonprofit Finance Fund lends to nonprofits and social enterprises in education, health, homelessness and housing, workforce development, and other social sectors. Santa Fe-based Homewise is a mortgage lender and home-buying coach focused on narrowing the racial homeownership gap in New Mexico.
The guarantees, the largest ever from the Treasury’s CDFI program, come as community lenders look to leverage billions of dollars in catalytic funding from the US Greenhouse Gas Reduction Fund. The Bond Guarantee Program, administered by the Treasury’s CDFI Fund, was started in 2010 to help community lenders in underserved communities secure long-term and affordable capital to finance large-scale projects. It has guaranteed nearly $3 billion in CDFI bond issuances.
