CDFI Impact Blog



Innovative Clean Water Financing in Rural Communities Clean Water Financing in Rural Communities<div class="ExternalClass9B6A55FD41654499AA4ACCBE1382DCC5"><div class="figure"> <img class="ms-rtePosition-1" alt="Craft3 Septic Project" src="/SiteCollectionImages/Project%20Images/Craft3_Septic_VerticalBulldozer_jpg.jpg" style="width:30%;margin-right:1%;margin-bottom:0.5em;float:left;" /> </div><p>The opportunity to witness firsthand innovative CDFI and CDE activity in communities across the country is one of the most rewarding aspects of my job. Recently, I was privileged to join Craft3 CEO Adam Zimmerman and Carl Seip, VP of Communications and External Affairs, on a site visit to a Clean Water Loan construction site outside of Tacoma, Washington.</p><p>Poor water quality can have dire impacts on people within an affected community, particularly in rural areas, which are often not served by public water systems but rely instead on individual wells to provide drinking water and septic systems to remove wastewater. These systems are in varying states of repair and can often fail to provide safe and adequate service. Studies indicate clean water and wastewater needs in rural areas approach $68 billion, and the needs in small communities (with populations of fewer than 10,000) are nearly $34 <a href="#billion">billion</a>—a daunting obstacle for communities to overcome.</p><p>More than ten years ago Craft3 recognized the depth of these challenges and developed the <a href="" target="_blank">Clean Water Loan </a>in <a href="" target="_blank">Pacific County, Washington</a> to help rural homeowners finance the repair or replacement of septic systems. The cost to replace a septic system can be a significant burden on a family’s household budget, and failing systems can pollute the environment, threaten public health, and negatively impact local industries reliant on clean water. Craft3 has since invested more than $21 million into the loan program, and has expanded the program with the support of state and local governments and private funders throughout much of Oregon and Washington. </p><p>Uniquely, they’ve structured the loan in a way that makes it particularly accessible to low- and moderate-income households, and others with credit challenges. Depending on their income, an applicant may be eligible for a reduced interest rate or deferred payments. As a result, four in ten Clean Water Loan borrowers are low-income. The availability of loans like this help keep families in their homes when they don’t have other viable options. The Clean Water Loan construction site we visited underscored this simple fact.</p><p>In one particular case, a homeowner had a series of unexpected home repairs including expensive plumbing, roofing, and the installation of a new furnace. When the family’s septic system failed, they found Craft3. Though the family had good jobs, obtaining financing was a challenge. Craft3 provided an affordable solution for their unique situation. The Clean Water Loan allowed them to get a new system installed before the rainy Northwest winter. </p><p>I have always been proud of the breadth of impact that CDFIs make—on everything from large tax-credit community facilities to small-scale entrepreneurs. It was a special moment to stand next to the homeowner as we watched a bulldozer digging into the side of a hill for her new septic system. Her relief was palpable. It is a reminder that building resilience takes many forms, and CDFIs are at the forefront.</p><p> <i>Annie Donovan is Director of the CDFI Fund</i></p><hr /> <footer> <ol><li id="billion">“Clean Watersheds Needs Survey 2012-Report to Congress,” U.S. Environmental Protection Agency. January 2016. </li><p> </p></ol> </footer></div>Annie Donovan2018-01-23T16:48:00ZLocal Impact44GP0|#6739e502-ad8d-4e57-bade-8d5d363e66c7;L0|#06739e502-ad8d-4e57-bade-8d5d363e66c7|In the Field;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532;GP0|#b7b05618-445b-40ae-b997-d6200e9475f1;L0|#0b7b05618-445b-40ae-b997-d6200e9475f1|Washington
Hoffinger Industries Continues to be a Swimming Success Industries Continues to be a Swimming Success<div class="ExternalClass2A6669298A7E4CBA8F92777E5D808F7A"><p>Phillips County, Arkansas is situated in what was once one of the most prosperous parts of the nation—the Arkansas Delta. Agriculture drove the area’s success, but mechanized farming techniques eventually made many jobs obsolete. Over time, communities withered as workers left for urban areas in search of work. Today the Delta is still dominated by agriculture but with much fewer workers needed to grow crops, jobs are a scarce commodity.</p><p> <a href="/Documents/Hoffinger-Southern%20Bancorp%20CDFI%20Impact%20Story%202-16-18.pdf" target="_blank">Click here to read the full story</a>.</p></div>2018-02-20T17:00:00ZLocal Impact46GP0|#c8a5d5bc-32cc-47a9-88a8-702f1f974786;L0|#0c8a5d5bc-32cc-47a9-88a8-702f1f974786|CDFI Certification;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532;GP0|#9007f782-92c5-422c-b7ab-e0c8caa2ff92;L0|#09007f782-92c5-422c-b7ab-e0c8caa2ff92|Arkansas
CDFI Fund Programs Reach Far and Wide, Even to the Arctic Circle Fund Programs Reach Far and Wide, Even to the Arctic Circle<div class="ExternalClass4DAD4FD324F64AB78CCA91A94CEB1C13"><p>​​In late October, CDFI Fund Director Annie Donovan and I traveled to Alaska to participate in the Annual Conference of the Alaska Federation of Natives and to meet with several organizations that have utilized CDFI Fund programs. To say that Alaska, appropriately nicknamed “The Last Frontier,” is a unique place, would be an understatement. It is common to hear that Alaska is larger in area than California, Texas, and Montana combined, but it is impossible to appreciate that fact without experiencing it first-hand. The sheer size, remoteness, and climate of the state make community development even more challenging. Fortunately, there are organizations on the ground that have seen opportunity, not obstacles, in Alaska’s uniqueness. </p><p>The scale and remoteness that community development organizations face in Alaska was evident from our arrival. To reach our first site, Director Donovan and I took an hour and a half long flight from Anchorage to Kotzebue, a town of 3,200 that is located approximately 33 miles north of the Arctic Circle. The flight across Alaska’s interior was an appropriate way to be introduced to the state, as most towns and villages in the state are only accessible by plane. Fortunately, local community development organizations, such as Alaska Growth Capital BIDCO (AGC), a certified Native CDFI, are dedicated to reaching the remote corners of the state. </p><p>In Kotzebue, we visited Utuqqanaat Inaat (A Place for Elders), a long term care facility for Alaska Native elders that AGC financed, in part, with New Markets Tax Credits (since 2002, AGC has received three New Markets Tax Credit awards totaling $90 million in allocation authority). At Utuqqanaat Inaat, Alaska Native elders receive culturally appropriate person centered care, including being served traditional foods such as moose and caribou. We sampled some ourselves! New Markets Tax Credits helped AGC bridge a critical gap in financing for a facility that provides Inupiat elders with a chance to live their senior years in a place where the language, food, and culture are more familiar than they would be in a traditional nursing home.</p><p>After seeing Kotzebue, we returned to Anchorage to learn how local organizations have used CDFI Fund awards to address affordable housing challenges in Alaska. There are many unique factors that present barriers to affordable housing in the state. For example, transporting building materials to isolated parts of Alaska and narrow construction windows caused by Alaska’s frigid climate drive the cost of housing construction beyond affordability for many <a href="#Alaskans">Alaskans</a>. Further, the average household energy costs in Alaska are more than twice the national average, costs which are often compounded by a lack of adequate insulation in many existing <a href="#homes">homes</a>. These factors make finding affordable housing challenging for many of Alaska’s most vulnerable citizens. </p><p>In Anchorage, we toured several affordable housing locations that had been financed or developed by nonprofits and Native CDFIs. We visited the Cook Inlet Lending Center, a Native CDFI with a primary mission of increasing access to homeownership. In addition to hearing about Cook Inlet Lending Center’s activities, we saw first-hand many affordable housing sites that its parent company, the Cook Inlet Housing Authority, had developed around Anchorage. The Lending Center and Housing Authority provide Alaskans with an opportunity to overcome the many obstacles to homeownership in the state by providing mortgages through the U.S. Department of Housing and Urban Development Section 184 Home Loan Guarantee Program and offering down payment assistance loans.</p><p><img class="ms-rtePosition-2" alt="Birchwood Apartments" src="/SiteCollectionImages/Project%20Images/future%20office%20of%20cook%20inlet%20and%20CMF%20housing%20sites%203.jpeg" style="width:300px;" /> We also met with staff from Volunteers of America Alaska, who gave us a tour of affordable housing sites developed and redeveloped with funding that its parent organization, Volunteers of America, received from the Capital Magnet Fund. Volunteers of America has received two Capital Magnet Fund awards totaling $9.5 million since 2010. The two housing developments we toured, Trailside Heights in Anchorage, and Birchwood Apartments in Eagle River, were beautiful, and the stories we heard from residents demonstrate the difference that programs such as the Capital Magnet Fund can make in the lives of families. </p><p> Each family we met in the housing developments was unique, but a common thread was woven through each of their stories. Every resident shared that, while they had their own challenges to overcome, their lives and the lives of their families were better off because they had found a safe and affordable home. Residents expressed that they had better access to essential healthcare services, a chance to raise their children in a safe and supportive environment, and the opportunity to strive to provide a better life for their loved ones because they’d found homes provided by Volunteers for America. </p><p>The stories we heard at Trailside Heights and Birchwood Apartments were inspiring, as were all the sites we visited in Alaska. Staff from every organization that we met acknowledged the unique circumstances they were operating in, but also that they saw an opportunity to utilize CDFI Fund programs to create a better quality of life for the citizens of their state. CDFI Fund programs are flexible enough to allow local organizations to facilitate investments that address needs in the most challenged areas in the country, even in the Arctic Circle. </p><p> <i>Clint Hastings is a Senior Portfolio Manager for the CDFI Fund’s Native Initiatives</i></p><hr /> <footer> <ol><li id="Alaskans"> <i>“Alaska Rural Homeownership Resource Guide,” Federal Reserve Bank of San Francisco. January 2017.</i></li><li id="homes"> <i>“2014 Alaska Housing Assessment,” Alaska Housing Finance Corporation. </i></li></ol></footer> </div>Clint Hastings2017-12-13T15:52:00ZLocal Impact42GP0|#ab4fe4dc-3e5a-4bf0-9957-93afe828ea67;L0|#0ab4fe4dc-3e5a-4bf0-9957-93afe828ea67|Alaska;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532;GP0|#6739e502-ad8d-4e57-bade-8d5d363e66c7;L0|#06739e502-ad8d-4e57-bade-8d5d363e66c7|In the Field;GP0|#a52ce078-0bf5-4ef8-aa4b-0b66902683da;L0|#0a52ce078-0bf5-4ef8-aa4b-0b66902683da|Capital Magnet Fund;GP0|#368ed6d6-d6bb-4a27-ad10-a1a0a87661d8;L0|#0368ed6d6-d6bb-4a27-ad10-a1a0a87661d8|New Markets Tax Credit