In rural Vermont, investment dollars are helping to fund a mixed-use development with community facilities and restaurants that provide local jobs. Across the country in Everett, Washington, a unique mixed-use project combines affordable housing with job training and social services for low-income, formerly homeless, and veteran populations. In Oakland, California, loans helped keep rents affordable for 55 families, assuring they can stay in their homes for the long term.
These high-impact projects represent thousands across the country that have received support from the Community Development Financial Institutions (CDFI) Fund, a U.S. Department of Treasury program that provides capital grants and equity investments through CDFIs and other community development organizations currently operating in every state across the country.
In response to a recent executive order calling for a reduction in CDFI Fund operations, community development leaders and legislators from both parties have shared their keen support for the program. U.S. Senators Mark Warner (D-VA) and Mike Crapo (R-Idaho), co-chairs of the Senate Community Development Finance Caucus, recently issued a letter signed by the co-chairs and 23 other senators reaffirming significant bipartisan support. We spoke with Elise Balboni, president of Enterprise's CDFI, to understand the full scope of the CDFI Fund’s impact.
Let’s start with the basics. What is the CDFI Fund?
The Fund’s primary mission is to support Community Development Financial Institutions (CDFIs), which are mission-driven investors that provide affordable loans, equity investments, financial services, and technical assistance to people and communities often overlooked by traditional banks — think new small businesses, first-time homebuyers, and nonprofit organizations in lower-income areas.
When it was created in 1994 with the Riegle Community Development and Regulatory Improvement Act, the CDFI Fund not only established federal funding sources, it also launched a certification process. Later, the CDFI Fund became responsible for allocating other resources to financial institutions for economic and community development, like the New Markets Tax Credit program, an economic development lifeline in communities across the country, and the CDFI Bond Guarantee Program, which makes long-term debt available to CDFIs. These programs have rigorous application and scoring processes, which help guarantee that federal funds go to organizations with the means and knowledge to deploy capital to the projects that will have the most impact.
If private investors can support CDFIs, why are these federal dollars so important?
For CDFIs like the Enterprise Community Loan Fund, the CDFI Fund provides foundational funding, helping us build our balance sheet strength, attract more investors and scale our activities. Just look at the data: For every federal $1 provided by the CDFI Fund, CDFIs bring in at least $8 in private sector investments. CDFI Fund grants also fuel financial innovation, allowing CDFIs to provide flexible, patient capital to new sectors and borrowers to establish a successful track record of repayment.
For every federal $1 provided by the CDFI Fund, CDFIs bring in at least $8 in private sector investments.
Without the CDFI Fund, I don’t think the industry would be operating at its current scale. There are now more than 1,400 certified CDFIs operating nationwide, delivering more than $300 billion in financial services every year, in every state and U.S. territory. That capital directly supports the creation of affordable housing, jobs, health clinics, community and commercial spaces, and other critical resources in the places that need them most. CDFI Fund support is necessary to ensure capital access for every community in the country and ensure broad-based economic development.
What sets CDFIs apart from traditional banks that provide business loans?
CDFIs are deeply embedded in the communities they serve — they operate with boots on the ground, meaning they understand local needs, challenges, and opportunities from the inside. They’re also built to take on risks conventional lenders can’t.
CDFIs offer longer loan terms, higher loan-to-value ratios, and interest-only repayment periods, making community development projects more viable. That translates to grocery stores in food deserts, small business incubators in lower-income neighborhoods, and early childhood education centers in places where other schools have had to close.
CDFIs have also emerged as financial first responders during times of crisis — we saw proof of that during the COVID-19 pandemic. When traditional banks needed to tighten their lending standards, CDFIs were able to continue lending, keeping businesses and community projects funded. For both investors and borrowers, CDFIs are a critical ally during times of economic uncertainty.
Can you provide a real-world example of how CDFI Fund dollars make a difference?
Yes, I can provide many! This past year, our Capital Magnet Fund award enabled us to provide a $1.1 million acquisition loan to refinance a 64-unit affordable housing project in Waynesboro, Georgia. Our CDFI’s loan helped preserve these units as affordable until the property could be repositioned via a Low-Income Housing Tax Credit resyndication.
The Enterprise Community Loan Fund relied on other CDFI Fund awards to provide subordinate financing with Enterprise’s NMTC business. Along with Local Initiatives Support Corporation and Craft3, we served as the lead on $12 million in senior bridge and mini-permanent financing for the new construction of White Center Community HUB, a 26,000-square-foot community hub in Seattle. The property will offer leasable office and health clinic space, a commercial kitchen, a cafe, classrooms, and community event space. The CDFI Fund award provided critical gap financing that enabled this transaction to close.
How do CDFIs contribute to long-term economic stability?
CDFIs don’t just fund these important community-serving projects; they create sustainable economic ecosystems. By financing local businesses, affordable housing, and other essential services, CDFIs help stabilize communities and create jobs. They also improve borrowers’ credit scores and financial standings, opening pathways to future opportunities. CDFIs revolve and leverage the grant funds, too, meaning repayments fund future projects, ensuring long-term community investment. As far as public-private partnership vehicles go, CDFIs are really one of the most effective, durable economic development tools we have—and the CDFI Fund is foundational to their success.
