The Treasury Department’s Community Development Financial Institutions Fund and the Federal Housing Finance Agency (FHFA) have established a new working group.
The CDFI Fund-FHFA Working Group will help more CDFIs access affordable capital from Federal Home Loan Banks (FHLBs) to address affordable housing needs in distressed communities not served by traditional banks and lenders.
The Working Group has defined initial topics and priorities for 2024-2025, including:
• New programs and approaches for increasing access to capital by non-depository CDFI members;
• Examination of property appraisal and collateral mechanisms and valuation methods; and
• Data sharing on non-depository CDFI activities and performance.
“The Biden-Harris Administration is focused on using every tool at its disposal to increase the supply of housing and lower costs for American families,” U.S. Deputy Secretary of the Treasury Wally Adeyemo said. “Critical to our efforts is working to ensure that the Federal Home Loan Banks fulfill their statutory mission of supporting affordable housing. Helping lenders expand their sources of financing and access capital from the Federal Home Loan Banks will help these community banks support a range of projects that can lower housing costs in communities across the country for years to come.”
FHLBanks’ main priority is increasing support to mission-oriented organizations. As such, the CDFI Fund and FHFA have entered into a Memorandum of Understanding to share data and assist FHLBs in better serving CDFIs, allowing them to access the capital necessary to meet urgent housing affordability needs.
“This collaboration between FHFA and the CDFI Fund will help accelerate the ‘System at 100’ reforms to ensure the Federal Home Loan Banks meet their housing and community development mission and remain a stable source of liquidity for their members,” FHFA Director Sandra Thompson said. “CDFIs play a key role with FHFA and our regulated entities in efforts to address the nation’s affordable housing challenges, working on the ground in their communities to deliver positive outcomes for underserved households.”
Since its inception in 1994, the CDFI Fund has provided more than $8 billion through a variety of award programs, $81 billion in tax credits through the New Markets Tax Credit Program, and has guaranteed nearly $3 billion in bonds through the CDFI Bond Guarantee Program. During this time, the CDFI Fund has helped build the capacity of more than 1,400 Certified CDFIs, which are in all 50 states as well as in the District of Columbia, Guam, and Puerto Rico.
FHFA regulates Fannie Mae, Freddie Mac, and the 11 FHLBs. These government-sponsored enterprises provide more than $8.4 trillion in funding for the U.S. mortgage markets and financial institutions.