WASHINGTON – The U.S. Department of the Treasury's Community Development Financial Institutions Fund announced it has approved a $100 million guarantee under the fiscal year 2020 round of the Community Development Financial Institutions (CDFI) Bond Guarantee Program.
The guarantee will be issued to the Community Reinvestment Fund, USA on behalf of Clearinghouse Community Development Financial Institution. Over $1.7 billion has now 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 Native communities, Treasury said.
“After eight rounds of bond issuances, the impact the CDFI Bond Guarantee Program is having in economically distressed communities across the country is evident,” said CDFI Fund Director Jodie Harris. “From the financing of small businesses in both urban and rural settings, to needed community facilities on native lands, to critical housing for people with disabilities, the long-term affordable capital provided under this program is making a real difference.”
How the Funds Will Be Used
Clearinghouse, which is headquartered in Lake Forest, Calif., will use the bond loan to finance charter schools, commercial real estate, daycare centers, healthcare facilities, not-for-profit organizations, rental housing, senior living and long-term care, and small businesses in low-income communities in California, Arizona, Nevada, New Mexico, and in sovereign nations in the western United States, according to the Treasury.
Established by the Small Business Jobs Act of 2010, the CDFI Bond Guarantee Program responds to a critical market need for low-cost capital to spur economic growth and jump start community revitalization. Under the program, Qualified Issuers (CDFIs or their designees) apply to the CDFI Fund for authorization to issue guaranteed bonds worth a minimum of $100 million. The bonds provide CDFIs with access to substantial long-term, fixed-rate capital to invest in distressed communities, Treasury said.