WASHINGTON–Treasury’s Community Development Financial Institutions Fund has announced that Treasury has agreed to issue three guarantees totaling $300 million under the Community Development Financial Institution (CDFI) Bond Guarantee Program, including funds going toward one credit union-affiliated initiative.
The guarantees will be issued on behalf of three Eligible CDFIs under the fiscal year (FY) 2023 round of the program. Nearly $2.5 billion has been guaranteed since the inception of the CDFI Bond Guarantee Program, which provides long-term, low-cost, fixed-rate capital for projects in low-income and distressed urban, rural, and Native communities, according to the CDFI Fund.
"This announcement of $300 million in bond guarantee issuances marks the 10-year anniversary of the inaugural round of the program. In today’s interest rate environment, the availability of low-cost long-term capital is key to the work of CDFIs in distressed communities,” said CDFI Fund Acting Director Marcia Sigal.
The Participants
The FY 2023 program participants include:
- Community Reinvestment Fund, USA, which will issue a $100 million bond on behalf of B.S.D. Capital, Inc. dba Lendistry (LDST). LDST, based in Brea, California, plans to use the bond proceeds to fund small businesses, charter schools, rental housing, commercial real estate, daycare centers, and other eligible uses nationwide, with emphasis on the states of California, Florida, New York, and Washington, according to Treasury. This will be LDST’s first CDFI Bond Guarantee Program bond issuance.
- Bank of America CDFI Funding Corporation will issue a $100 million bond on behalf of Self-Help Ventures Fund (SHVF), a subsidiary of Self Help Credit Union in Durham, N.C. The bond proceeds will be used to fund new originations, loan acquisitions, and refinancing of existing loans under five asset classes that include commercial real estate, rental housing, charter schools, not-for-profit organizations, and healthcare facilities, primarily in five states. SHVF has received two prior bond guarantees in 2016 and 2021.
- In addition, Bank of America CDFI Funding Corporation will also issue a $100 million bond on behalf of California Community Reinvestment Corporation (CCRC). CCRC, based in Glendale, Calif., plans to use bond proceeds to exclusively fund rental housing in the state of California with 100% of the proposed Secondary loans being aimed at serving low-income households with most being in low or moderate income and underserved areas, Treasury said.
About the Program
Established by the Small Business Jobs Act of 2010, Treasury said the CDFI Bond Guarantee Program responds to a critical market need—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 per issuance. The bonds provide CDFIs with access to long-term, low-cost, fixed-rate capital to reignite the economies of distressed communities.
As of July 31, 2023, more than $1.5 billion in bond proceeds has been disbursed in 32 states and the District of Columbia.
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