Inaugural Round of CDFI Bond Guarantee Program Opens Doors to Long-Term Capital for
Community Development Investments at No Cost to Taxpayers
September 30, 2013
Washington, DC– The U.S. Department of the Treasury announced today that
it has approved term sheets for $325 million in bonds with maturities up to 29.5
years that, when issued, will be guaranteed by Treasury for community and economic
development financing through the fiscal year (FY) 2013 round of the CDFI Bond Guarantee
Program. As the administrator of the CDFI Bond Guarantee Program, the Community
Development Financial Institutions Fund (CDFI Fund) will commence final bond closings
and issuance of guarantees during the next FY quarter. The CDFI Fund selected three
Qualified Issuers to issue the bonds and, upon the final closing of the guarantees,
to make bond loans to Eligible Community Development Financial Institutions (Eligible
CDFIs) for investments in low-income and distressed communities across the country.
The FY 2013 round is the inaugural round of the CDFI Bond Guarantee Program.
“The CDFI Bond Guarantee Program is now set to supply a significant new source of
capital for small businesses, housing, charter schools, health centers and other
economic development activities in some of the most distressed parts of America,”
said Don Graves, Treasury’s Deputy Assistant Secretary for Small Business, Community
Development and Housing Policy. “These bonds will allow CDFIs to scale their positive
impact and bring opportunity to more communities.”
The four Eligible CDFIs that will receive financing through the inaugural round
of the CDFI Bond Guarantee Program are Clearinghouse CDFI, Enterprise Community
Loan Fund, Inc., The Community Development Trust, LP and Local Initiatives Support
Corporation. Each of the four Eligible CDFIs has a proven track record and a national
footprint in community development financing. Collectively, these organizations
have a solid history of delivering innovative financial products that stimulate
job growth among low-income people and are effective at catalyzing new capital to
increase the accessibility of small business loans, quality affordable housing,
and community facilities.
The three organizations chosen to issue the bonds as the Qualified Issuers are The
Community Reinvestment Fund, Opportunity Finance Network, and TriSail Funding Corporation.
Unlike other CDFI Fund programs, the CDFI Bond Guarantee Program does not offer
monetary awards or tax credit allocations; instead, it is a federal credit program,
and bond proceeds are debt instruments that must be repaid. The program was designed
to function at no cost to taxpayers. Authorized uses of the bond loans include a
variety of Eligible Purposes, such as supporting commercial facilities that promote
revitalization and community stability; community facilities; the provision of basic
financial services; senior living and healthcare facilities for uninsured or underinsured
people; businesses that provide jobs for low-income people or are owned by low-income
people; and other community or economic development activity in low-income or underserved
urban and rural areas.
“I am immensely proud to be able to announce these initial results of the first
round of the CDFI Bond Guarantee Program, a program that will for the first time
provide significant access to long-term financing to CDFIs,” said CDFI Fund Director
Donna J. Gambrell. “Through its many programs, the CDFI Fund provides support to
CDFIs at all stages of their growth and development and, by bringing this exciting
new program to the industry, we are able to dramatically increase the scale of vital
investments in low-income and distressed communities across the nation.”
2013 CDFI Bond Guarantee Program Qualified Issuers
The Community Reinvestment Fund, Inc. (CRF) is a certified CDFI based in Minneapolis,
Minnesota. Founded in 1988, CRF has been responsible for issuing over 50 structured
financial instruments and delivering $1.5 billion in loans nationwide. CRF will
serve as the Qualified Issuer for The Community Development Trust, LP, the Eligible
CDFI. The Community Development Trust, LP is a certified CDFI that provides financing
for the preservation of multi-family affordable housing properties throughout the
TriSail Funding Corporation is a wholly owned subsidiary of Bank of America, N.A.,
which is based in Charlotte, North Carolina. Bank of America has served as a strong
partner with the community development industry, providing capital to various types
of CDFIs, community development venture capital funds, CDFI banks, CDFI credit unions,
and CDFI intermediaries. TriSail Funding Corporation will serve as the Qualified
Issuer for two Eligible CDFIs: Enterprise Community Loan Fund, Inc. and Local Initiatives
Support Corporation. Enterprise Community Loan Fund is a certified CDFI established
in 1983 that provides affordable housing, small business, and gap financing to low-income
communities. Local Initiatives Support Corporation is a certified CDFI established
in 1979 that promotes comprehensive and sustainable revitalization of economically
distressed communities across the country.
Opportunity Finance Network, a certified CDFI based in Philadelphia, PA, is a 27-year
old membership organization that supports the growth of the CDFI industry. Through
2011, its membership network of CDFIs had originated more than $30 billion in financing
to urban, rural, and Native communities. OFN will serve as the Qualified Issuer
for Clearinghouse CDFI, as Eligible CDFI. Clearinghouse CDFI is a certified CDFI
established in 1996 that offers loan products to non-profits, small businesses,
and community service organizations for low-income individuals and communities throughout
California and Nevada.
About the CDFI Fund
Since its creation in 1994, the CDFI Fund has awarded over $1.8 billion to CDFIs,
community development organizations, and financial institutions through the CDFI
Program, the Bank Enterprise Award Program, the Capital Magnet Fund, the Financial
Education and Counseling Pilot Program, and the Native American CDFI Assistance
Program. In addition, the CDFI Fund has allocated $36.5 billion in tax credit authority
to Community Development Entities through the New Markets Tax Credit Program. Learn
more about the CDFI Fund and its programs at www.cdfifund.gov.
About the CDFI Bond Guarantee Program
The CDFI Bond Guarantee Program was enacted through the Small Business Jobs Act
of 2010. The program provides Eligible CDFIs with access to long-term capital by
providing guarantees of bonds. With long-term credit at below-market interest rates,
the CDFI Bond Guarantee Program is a groundbreaking effort to accelerate community
economic growth and development. Bonds will be 100 percent guaranteed by the U.S.
Treasury, including principal, interest, and call premiums. The Federal Financing
Bank will be the sole purchaser of bonds issued under the CDFI Bond Guarantee Program.
For more information please visit www.cdfifund.gov/bond.