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What is the Community Development Financial Institutions Fund (CDFI Fund)?
The CDFI Fund plays an important role in generating economic growth and opportunity in some of our nation’s most distressed communities. By offering tailored resources and innovative programs that invest federal dollars alongside private sector capital, the CDFI Fund serves mission-driven financial institutions that take a market-based approach to supporting economically disadvantaged communities. These mission-driven organizations are encouraged to apply for CDFI Certification and participate in CDFI Fund programs that inject new sources of capital into neighborhoods that lack access to financing.The CDFI Fund was created for the purpose of promoting economic revitalization and community development through investment in and assistance to Community Development Financial Institutions (CDFIs). The CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994, as a bipartisan initiative.
The CDFI Fund achieves its purpose by promoting access to capital and local economic growth in the following ways, thru its:
- Community Development Financial Institutions Program by directly investing in, supporting and training CDFIs that provide loans, investments, financial services and technical assistance to underserved populations and communities;
- New Markets Tax Credit Program by providing an allocation of tax credits to Community Development Entities which enable them to attract investment from the private-sector and reinvest these amounts in low-income communities;
- Bank Enterprise Award Program by providing an incentive to banks to invest in their communities and in other CDFIs;
- through its Native Initiatives, by taking action to provide financial assistance, technical assistance, and training to Native CDFIs and other Native entities proposing to become or create Native CDFIs;
- CDFI Bond Guarantee Program by issuing bonds to support CDFIs that make investments for eligible community or economic development purposes; and
- Capital Magnet Fund, which offers competitively awarded grants to finance affordable housing solutions for low-income people and low-income communities nationwide.
Since its creation, the CDFI Fund has awarded more than $5.2 billion to CDFIs, community development organizations, and financial institutions through: the Bank Enterprise Award Program; the Capital Magnet Fund; the CDFI Rapid Response Program; the Community Development Financial Institutions Program, including the Healthy Food Financing Initiative; the Economic Mobility Corps; the Financial Education and Counseling Pilot Program; the Native American CDFI Assistance Program; and the Small Dollar Loan Program. In addition, the CDFI Fund has allocated $66 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and closed guaranteed bonds for more than $1.8 billion through the CDFI Bond Guarantee Program.