Community & Economic Development for Rural Communities

There are many federal, state, local, nonprofit and for-profit community and economic development subsidies, which target rural communities.

We represent manufacturers, healthcare providers, educational institutions, renewable energy providers, recycling providers, multifamily developers, and nonprofits.

Community Reinvestment Associates, LLC is a national boutique financial subsidy placement firm specializing in bridging financial gaps by identifying and securing community and economic development subsidies, as well as traditional debt and equity.

We have facilitated over $4.2 billion of community and economic development financings, including those involving new markets tax credits; historic tax credits and preservation easements; low-income housing tax credits; opportunity zone financing; USDA Programs; and CDFI Programs. Additionally, we have extensive experience in applying for and obtaining tax increment financing, taxable bonds, tax-exempt bonds, and various federal, state and local subsidies, as well as facilitating private-public partnerships, including securing traditional debt, equity, and donations. All of these sources of financing are collectively known as the “capital stack.”

Tax credit finance consists of selling or transferring tax credits to investors which provides significant cash and/or forgivable loans to qualified Borrowers and projects. This process is referred to as “tax credit syndication.” Often these transactions involve leveraging other sources of financing which provide a significant multiplier effect in monetizing these credits as well as other pieces of the capital stack.

We have several years of experience in financial, legal and accounting matters as well as substantial experience in community and economic development. This experience provides us with the ability to underwrite financings for the each of the community and economic development programs; identify sources of the capital stack; secure the capital stack; and efficiently and effectively structure and close these complex financings.

We assist our clients with respect to, for example:

applying for financing under the federal new markets tax credit program (the “NMTC Program”);
applying to the United States Agriculture Department (the “USDA”), including subsidies provided by 8 of its major Business Programs and 5 of its major Community Facilities Programs (as well as representing Borrowers applying to applicants that have received such subsidies to lend or otherwise provide to Borrowers); and
applying to the Community Development Financial Institutions Fund (the “CDFI Fund”), including 5 of its major community development programs (of which the NMTC Program is a part) (as well as representing Borrowers applying to applicants that have received such subsidies to lend or otherwise provide to Borrowers).

We quarterback each NMTC financing from start to finish.

Each year the Community Development Financial Institutions Fund (the “CDFI Fund,” which is a division of the U.S. Treasury Department) awards $3.5 billion to applicants, which are “qualified community development entities” (“CDEs”).

The NMTC Program

Rural Borrower or nonprofit operations and projects that a good candidates for the NMTC Program include those involving manufacturing, health care, grocery, education, qualified mixed-use, community-based services, renewable energy and recycling.

NMTCs are equal to 39% of the NMTC financing, which is a “qualified equity investment” (a “QEI”).

None of the Borrower, its affiliates or owners recognize the NMTCs.

A Tax Credit Purchaser is typically a financial institution or a large corporation.

A Tax Credit Purchaser does not receive any direct or indirect ownership interest in the Borrower.

Instead, a Tax Credit Purchaser receives a direct or indirect ownership interest in an affiliate the Allocatee, which affiliate provides the NMTC financing to the Borrower.

A Tax Credit Purchaser effectively “purchases” the NMTCs based on: (a) current market pricing; (b) desirability of participating in the particular NMTC financing; and (c) whether or not other Tax Credit Purchaser are competing to participate in the particular NMTC financing.

Therefore, it is critical that Borrowers generate as much interest among Tax Credit Purchaser as possible in order to obtain the best pricing for the NMTCs, which directly increases the NMTC Program subsidy to the Borrower.

Generally, with respect to the Forgiven Loan:

the principal and favorable terms of which are provided by the proceeds of the Tax Credit Purchaser’s “purchase price” for the NMTCs;
it only requires approximate 1.0% to 1.2% interest-only payments during the 7-Year NMTC Compliance Period; and
it is forgiven at the end of the 7-Year NMTC Compliance Period.

Generally, with respect to the Non-Forgiven Loan:

a portion of the principal and the favorable terms of which are the provided by, or the result of, the Tax Credit Purchaser’s “purchase” of the NMTCs;
it only requires below-market interest-only payments during the 7-Year NMTC Compliance Period; and
after the 7-Year NMTC Compliance Period, the loan amortizes through its maturity date of up to 40 years (which can be beyond any secured asset’s useful life).

Generally, the benefits of the NMTC Program subsidy (whether in the form of the Forgiven Loan or the Non-Forgiven Loan) include many of the following:

gap financing;
in the case of the Forgiven Loan, approximate 1.0% to 1.2% interest-only payments during the 7-Year NMTC Compliance Period and forgiveness after such period;
in the case of the Non-Forgiven Loan, below-market interest-only payments during the 7-Year NMTC Compliance Period (which rate may continue through the maturity date which can be up to 40 years and beyond any secured asset’s useful life);
subordination to existing and subsequent debt;

various non-traditional and favorable terms;
subject to flexible financial underwriting criteria;
ability to “leverage” its other sources of financing for a multiplier economic benefit;
“softer” foreclosure and enforcement rights if there is a default; if applicable, state NMTCs provide additional subsidy;
ability to obtain additional financing; and
substantial community and economic impacts to residents in “Low-Income Communities” and “Targeted Populations,” including “Low-Income Persons.”

For a more detailed discussion of the benefits of NMTC financing to a Borrower, and applicable legal requirements and underwriting requirements, please click on the following link:

We are interested in participating as a NMTC Borrower

Please click the following link to watch our pre-recorded webinar:

Borrower NMTC Webinars and Educational Materials

To apply as a Borrower for NMTC financing, please click on the following link:

Apply for NMTC Financing

8 USDA Business Programs

The 8 major USDA Business Programs provide financial backing and technical assistance to stimulate business creation and growth in rural communities.

Such Programs are facilitated through partnerships with public and private community based organizations and financial institutions to provide financial assistance, business development, and technical assistance to rural businesses.

The USDA Business Programs help to provide capital, equipment, space, job training, and entrepreneurial skills that can help to start and/or grow a business, and support the creation and preservation of quality jobs in rural communities.

Such Programs provide loans, loan guarantees, and grants are available to individuals, businesses, cooperatives, farmers and ranchers, public bodies, non-profit corporations, Native American Tribes, and private companies in rural communities.

The financial resources of the Business Programs are often leveraged with those of other public and private credit source lenders to meet business and credit needs in under-served areas, including the NMTC Program.

The funding is intended to help improve the quality of life in rural communities by enhancing economic opportunities and ensuring self-sustainability for generations to come.

The 8 of the major USDA Business Programs are:

Business and Industry Loan Guarantees (which improve the economic health of rural communities by increasing access to business capital through loan guarantees that enable commercial lenders to provide affordable financing for businesses in eligible rural areas);
the Intermediary Relending Program (which alleviates poverty and increases economic activity and employment in rural communities by providing loans to local organizations (intermediaries) for the establishment of revolving loan funds, which are used to help finance business and economic development activity to create or retain jobs in disadvantaged and remote communities);
Rural Business Development Grants (which are provided for rural projects that (a) finance and facilitate the development of small and emerging rural businesses; (b) help fund distance learning networks; (c) help fund employment-related adult education programs; (d) assist with business development; and (e) fund many different types of other activities);
the Rural Business Investment Program (which provides access to capital that is vital to businesses and often is scarce in rural areas through newly formed venture capital organizations);
Rural Cooperative Development Grants (which are used to improve the economic condition of rural areas by helping individuals and businesses start, expand or improve rural cooperatives and other mutually-owned businesses through rural cooperative development centers);
the Rural Micro-entrepreneur Assistance Program (which supports the development and ongoing success of rural micro-entrepreneurs and microenterprises by providing loans and grants to microenterprise development organizations); and
Socially-Disadvantaged Group Grants (which provide technical assistance to socially-disadvantaged groups through cooperatives and cooperative development centers).
Value Added Producer Grants assist agricultural producers enter into value-added activities related to the processing and/or marketing of new products, create and expand marketing opportunities, and increase producer income.

1. USDA Business and Industry Loan Guarantees

Business and Industry Loan Guarantees improve the economic health of rural communities by increasing access to business capital through loan guarantees that enable commercial lenders to provide affordable financing for businesses in eligible rural areas.

The “Program Applicant” must be a federal or state-chartered bank, savings and loan, farm credit bank, or credit union.

A successful Program Applicant may then facilitate the Business and Industry Loan Guarantees for the following “Program Borrowers:” for-profit businesses; nonprofit corporations; cooperatives; federally-recognized Tribes; public bodies; and individuals.

Program Borrowers may use the USDA loan guarantee for: (a) business conversion, enlargement, repair, modernization or development; (b) purchasing and developing of land, easements, rights-of-way, buildings or facilities; (c) purchasing of equipment, leasehold improvements, machinery, supplies or inventory; (d) debt refinancing when refinancing improves cash flow and creates or saves jobs; and (e) business and industrial acquisitions when the loan will create or save jobs.

However, Program Borrowers may not use the USDA loan guarantee for: (a) lines of credit; (b) owner-occupied housing; (c) golf courses; (d) racetracks or gambling facilities; (e) churches, church-controlled organizations or charitable organizations; (f) fraternal organizations; (g) lending, investment and insurance companies; (h) projects involving more than $1 million and the relocation of 50 or more jobs; (i) agricultural production, with certain exceptions; or (j) distribution or payment to a beneficiary of the Borrower or an individual or entity that will retain an ownership interest in the Borrower.

To find out more information about Business and Industry Loan Guarantees or to apply (a) as the Program Applicant to the USDA, or (b) as a Program Borrower to a successful Program Applicant, please click the following link:

Apply for USDA Program Subsidy

2. USDA Intermediary Relending Program

The Intermediary Relending Program alleviates poverty and increases economic activity and employment in rural communities by providing loans to local organizations (intermediaries) for the establishment of revolving loan funds, which are used to help finance business and economic development activity to create or retain jobs in disadvantaged and remote communities.

The “Program Applicant” must a nonprofit, cooperative, public agency, or federally-recognized Tribe.

A successful Program Applicant (which is known as an “Intermediary Lender”) may use the proceeds of its award of a 1% low-interest loan to re-lend to businesses and individuals (the “Program Borrowers”) to improve economic conditions and create jobs in rural communities.

Program Borrowers may use the relent USDA loan proceeds: (a) to acquire, construct, convert, enlarge or repair a business or business facility (particularly when jobs will be created or retained); (b) to purchase or develop land easements, rights of way, buildings, facilities, leases, and materials; (c) to purchase equipment, machinery or supplies, or make leasehold improvements; (d) for start-up costs and working capital; (e) for pollution control and abatement; (f) for transportation services; (g) for feasibility studies and certain fees; (h) for hotels, motels, and convention centers; (i) for education institutions; (j) for aquaculture-based rural small business; and (k) for certain evolving lines of credit.

However, Program Borrowers may not use the relent USDA loan proceeds: (a) for assistance in excess of what is needed to accomplish the purpose of the ultimate recipient’s project; (b) for distribution or payment to the owner, partners, shareholders, or beneficiaries of the ultimate recipient or members of their families when such persons will retain any portion of their equity in the ultimate recipient; (c) by charitable institutions, that would not have revenue from sales, fees, or stable revenue to support the operation and repay the loan, and fraternal organizations; (d) for assistance to federal government employees, active duty military personnel, employees of the intermediary, or any organization for which such persons are directors or officers or have 20% or more ownership; (e) as a loan to an ultimate recipient which has an application pending with or a loan outstanding from another intermediary involving this program’s revolving fund if the total of such loans would exceed a certain limit; (f) for agricultural production; (g) for the transfer of ownership unless the loan will keep the business from closing, or prevent the loss of employment opportunities in the area, or provide expanded job opportunities; (h) for community antenna television services or facilities; (i) for any project that is in violation of either a federal, state, or local environmental protection law or regulation or an enforceable land use restriction unless the assistance given will result in curing or removing the violation; (j) by lending and investment institutions and insurance companies; (k) for golf courses, race tracks, or gambling facilities; or (l) for any line of credit.

To find out more information about the Intermediary Relending Program or to apply (a) as the Program Applicant to the USDA, or (b) as a Program Borrower to a successful Program Applicant, please click the following link:

Apply for USDA Program Subsidy

3. USDA Rural Business Development Grants

Rural Business Development Grants (which include Enterprise Grants and Opportunity Grants) are provided for rural projects that (a) finance and facilitate the development of small and emerging rural businesses; (b) help fund distance learning networks; (c) help fund employment-related adult education programs; (d) assist with business development; and (e) finance many different types of activities.

The “Grant Applicant” must be a town, community, state agency, authority, nonprofit corporation, institution of higher education, rural cooperative (if a private nonprofit corporation), or federally-recognized Tribe .

A successful Grant Applicant may use the proceeds of its:

Enterprise Grant for (a) training and technical assistance (such as project planning, business counseling/training, market research, feasibility studies, professional/technical reports, or product/service improvements); (b) acquisition or development of land, easements, or rights of way; construction, conversion, renovation of buildings; plants, machinery, equipment, access for streets and roads; parking areas and utilities; (c) pollution control and abatement; (d) capitalization of revolving loan funds (including funds that will make loans for start-ups and working capital); (e) distance adult learning for job training and advancement; (f) rural transportation improvement; (g) community economic development; (h) technology-based economic development; (i) feasibility studies and business plans; (j) leadership and entrepreneur training; (k) rural business incubators; and (l) long-term business strategic planning.
Opportunity Grant for: (a) community economic development; (b) technology-based economic development; (c) feasibility studies and business plans; (d) leadership and entrepreneur training; (e) rural business incubators; and (f) long-term business strategic planning.

To find out more information about the Rural Business Development Grants or to apply the Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

4. USDA Rural Investment Program

The Rural Business Investment Program provides access to capital that is vital to businesses and often is scarce in rural areas through newly formed venture capital organizations.

The “Program Applicant” must be a newly formed venture capital organization.

A successful Program Applicant (which is known as a “Rural Business Investment Company”) must use the proceeds of its Rural Business Investment Program award as follows: (a) at least 75% of the proceeds must be invested in rural areas with a population of 50,000 or less; (b) at least 50% of the proceeds must be invested in smaller enterprises; and (c) no more than 10% of the proceeds may be invested in urban areas.

To find out more information about the Rural Business Investment Program or to apply as the Program Applicant to the USDA, please click on the following link:

Apply for USDA Program Subsidy

5. USDA Rural Cooperative Development Grants

Rural Cooperative Development Grants are used to improve the economic condition of rural areas by helping individuals and businesses start, expand or improve rural cooperatives and other mutually-owned businesses through rural cooperative development centers.

The “Grant Applicant” must be a nonprofit corporation or institution of higher education.

A successful Grant Applicant may use the proceeds of its Rural Cooperative Development Grant to develop and operate a “Rural Cooperative Development Center,” including (a) conducting feasibility studies; (b) developing business plans; (c) providing leadership and operational improvement training; and (d) facilitating strategic planning.

To find out more information about the Rural Cooperative Development Grants or to apply as the Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

6. USDA Rural Micro-entrepreneur Assistance Program

The Rural Micro-entrepreneur Assistance Program supports the development and ongoing success of rural micro entrepreneurs and microenterprises by providing loans and grants to microenterprise development organizations.

The “Program Applicant” must a nonprofit corporation, institution of higher education, or federally-recognized Tribe.

A successful Program Applicant (which is known as a “Microenterprise Development Organization”) may use the proceeds of its Rural Micro-entrepreneur Assistance to provide (a) microloans to help microenterprises startup and growth through a “Rural Microloan Revolving Fund” to lend to businesses (known as “microloan Borrowers” and “micro entrepreneurs”) located in an eligible area with 10 or fewer full-time employees (the “Program Borrowers”), and (b) training and technical assistance to Program Borrowers.

To find out more information about the Rural Micro-entrepreneur Assistance Program or to apply (a) as the Program Applicant to the USDA, or (b) as a Program Borrower to a successful Program Applicant, please click the following link:

Apply for USDA Program Subsidy

7. USDA Socially-Disadvantaged Group Grants

Socially-Disadvantaged Group Grants provide technical assistance to socially-disadvantaged groups through cooperatives and cooperative development centers.

The “Grant Applicant” must be a cooperative or cooperative development center.

A successful Grant Applicant may use the proceeds of its Social-Disadvantage Group Grant to provide technical assistance to socially-disadvantaged groups in rural areas, including: (a) feasibility studies; (b) business plans; (c) strategic planning; and (d) leadership training.

To find out more information about the Socially-Disadvantaged Group Grants or to apply as the Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

8. USDA Value Added Producer Grants

Value Added Producer Grants assist agricultural producers enter into value-added activities related to the processing and/or marketing of new products, create and expand marketing opportunities, and increase producer income.

The “Grant Applicant” must be an independent producer, agricultural producer group, farmer or rancher cooperative, or majority-controlled “producer-based business venture.”

A successful Grant Applicant may use the proceeds of the Value Added Producer Grant for: (a) planning activities related to producing and marketing a value-added agricultural product (such as planning activities include conducting feasibility studies and developing business plans for processing and marketing the proposed value-added product, and (b) working capital expenses related to producing and marketing a value-added agricultural product (such as processing costs, marketing and advertising expenses, and some inventory and salary expenses).

To find out more information about the Value Added Producer Grants or to apply as the Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

5 USDA Community Facilities Programs

The 5 USDA Community Facilities Programs offer direct loans, loan guarantees and grants to develop or improve essential public services and facilities in communities across rural America. These amenities help increase the competitiveness of rural communities in attracting and retaining businesses that provide employment and services for their residents.

Public bodies, non-profit organizations and federally recognized American Indian Tribes can use the funds to construct, expand or improve facilities that provide health care, education, public safety, and public services.

Projects include fire and rescue stations, village and town halls, health care clinics, hospitals, adult and child care centers, assisted living facilities, rehabilitation centers, public buildings, schools, libraries, and many other community based initiatives.

Financing may also cover the costs for land acquisition, professional fees, and purchase of equipment.

These facilities not only improve the basic quality of life, and assist in the development and sustainability of rural communities.

The 5 of the major USDA Community Facilities Programs are:

Community Facilities Direct Loans and Grants (which provide affordable funding to develop essential community facilities in rural areas, which are facilities that (a) provide an essential service to the local community for the orderly development of the community in a primarily rural area, and (b) do not include private, commercial or business undertakings (such facilities are “Essential Community Facilities”);
the Community Facilities Loan Guaranteed Program (which provides loan guarantees to eligible private lenders to help build Essential Community Facilities in rural areas);
the Community Facilities Relending Program (which provides loans to eligible lenders, which then re-loan such funds to applicants for Essential Community Facilities for essential community infrastructure in order for people who live and work in rural areas to enjoy the same basic quality of life and services as those in urban and metropolitan areas);
Economic Impact Initiative Grants (which assists in the development of Essential Community Facilities in rural communities with extreme unemployment and severe economic depression); and
Rural Community Development Initiative Grants (which assist non-profit housing and community development organizations, low-income rural communities, and federally-recognized Tribes, which support housing, community facilities and community and economic development projects in rural areas).

1. USDA Community Facilities Direct Loans and Grants

Community Facilities Direct Loans and Grants are provided to (a) purchase, construct, and/or improve essential community facilities; (b) purchase equipment; and (c) pay related project expenses of Essential Community Facilities.

The “Loan/Grant Applicant” must be a public body, community-based nonprofit corporation, or a federally-recognized Tribe.

Examples of Essential Community Facilities include: (a) health care facilities (such as hospitals, medical clinics, dental clinics, nursing homes and assisted living facilities); (b) public facilities (such as town halls, courthouses, airport hangars and street improvements); (c) community support services (such as child care centers, community centers, fairgrounds and transitional housing); (d) public safety services (such as fire departments, police stations, prisons, police vehicles, fire trucks, public works vehicles and equipment); (e) educational services (such as museums, libraries or private schools); (f) utility services (such as telemedicine and distance learning equipment); and (g) local food systems (such as community gardens, food pantries, community kitchens, food banks, food hubs and greenhouses).

To find out more information about the Community Facilities Direct Loans and Grants or to apply as the Loan/Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

2. USDA Community Facilities Loan Guaranteed Program

The Community Facilities Loan Guaranteed Program provides to (a) purchase, construct, and/or improve essential community facilities; (b) purchase equipment; and (c) pay related project expenses of Essential Community Facilities.

The “Program Applicant” must be a public body, community-based nonprofit corporation, or a federally-recognized Tribe.

A successful Program Applicant may then facilitate the Business and Industry Loan Guarantees Program by providing the USDA guarantee for loans made to a public body, community-based nonprofit corporation, or federally-recognized Tribe, which is unable to obtain the needed commercial credit on reasonable terms without the guarantee (the “Program Borrower”).

Examples of Essential Community Facilities, include those as described under the heading, entitled “Community Facilities Direct Loans and Grants,” above.

To find out more information about the Community Facilities Loan Guaranteed Program or to apply (a) as the Program Applicant to the USDA, or (b) as a Program Borrower to a successful Program Applicant, please click the following link:

Apply for USDA Program Subsidy

3. USDA Community Facilities Relending Program

The Community Facilities Relending Program provides loans to (a) purchase, construct, and/or improve Essential Community Facilities; (b) purchase equipment; and (c) pay related project expenses.

The “Program Applicant,” (and known as a “Re-Lender”) must (a) have an existing loan portfolio where at least 30% of its loans are made in rural, high or persistent-poverty areas; (b) provide documentation that it can obtain an irrevocable letter of credit from a financial institution covering principal and interest payments for the first five years of the loan; and (c) (i) be regulated and supervised by a federal or state banking authority and is not on any watch list; (ii) has an Aeris Financial Strength and Performance Rating of 1 or 2 within the last 2 years; (iii) has obtained an Aeris Financial Strength and Performance Rating of 1 or 2 prior to any funds being advanced; and (iv) be proven to be a financially sound institution as determined by risk assessment.

A successful Program Applicant/Re-Lender uses the funds of its Community Facilities Relending Program to relend to Borrowers (the “Program Borrowers”)

Examples of Essential Community Facilities include: (a) health care facilities (such as hospitals, medical clinics, dental clinics, nursing homes, and assisted-living facilities); (b) public facilities (such as town halls and courthouses); (c) street improvements); (c) community support services (such as child care centers, community centers, fairgrounds, and transitional housing); (d) public safety services (such as fire departments, police stations, prisons, police vehicles, fire trucks, public works vehicles and equipment); and (e) educational services (such as museums, libraries, colleges, and public or private schools).

To find out more information about the Community Facilities Relending Program or to apply (a) as the Program Applicant to the USDA, or (b) as a Program Borrower to a successful Program Applicant, please click the following link:

Apply for USDA Program Subsidy

4. USDA Economic Impact Initiative Grants

USDA Economic Impact Initiative Grants assist in to construct, enlarge or improve Essential Community Facilities for health care, public safety and public service.

The “Grant Applicant” must be a public body, nonprofit corporation, or a federally-recognized Tribe.

Examples of Essential Community Facilities include: (a) health care (such as hospitals, medical clinics, dental clinics, nursing homes, and assisted-living facilities); (b) public facilities (such as city/town/village halls, courthouses, airport hangers, and street improvements); (c) community support services (such as child care centers, community centers, fairgrounds, and transitional housing); (d) public safety (such as fire halls, police stations, prisons, jails, police vehicles, fire trucks, public works vehicles and equipment); (e) educational (such as museums, libraries, and private schools); (f) utility (such as telemedicine and distance learning); and (g) local food systems (such as community gardens, food pantries, community kitchens, food banks, food hubs, greenhouses, and kitchen appliances).

To find out more information about the Economic Impact Initiative Grants or to apply as the Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

5. USDA Rural Community Development Initiative Grants

Rural Community Development Initiative Grants assist non-profit housing and community development organizations, low-income rural communities, and federally-recognized Tribes, which support housing, community facilities and community and economic development projects in rural areas.

The “Grant Applicant” must be a public body, nonprofit corporation, or a “qualified private (for-profit) organization.”

A successful Grant Applicant uses the funds of its Rural Community Development Initiative Grant to improve housing, community facilities, and community and economic development projects in rural areas.

Rural Community Development Initiative Grants may be used for, but are not limited to: (a) training sub-grantees to conduct (i) home ownership education, and (ii) minority business entrepreneur education; and (b) providing technical assistance to sub-grantees on (i) strategic plan development; (ii) accessing alternative funding sources; (iii) board training; (iv) developing successful child care facilities; (v) creating training tools, such as videos, workbooks, and reference guides; and (vi) effective fundraising techniques.

To find out more information about the Rural Community Development Initiative Grants or to apply as the Grant Applicant to the USDA, please click the following link:

Apply for USDA Program Subsidy

5 CDFI Fund Programs

CDFI Fund Programs permits Community Development Financing Institutions (“CDFIs”) and, in some case Community Development Entities (“CDEs”) to participate in various programs of the CDFI Fund.

A CDE must (a) be a U.S. corporation, partnership, or limited liability company; (b) have a primary mission to serve or provide investment capital for “Low-Income Communities” or “Low-Income Persons;” (c) maintain accountability to residents of low-income communities through their representation on any governing board or advisory board of such entity; and (d) be certified as such by the CDFI Fund (unless it already has been certified as a CDFI). Qualifying as a CDE does not require that the more stringent requirements to qualify as a CDFI must be satisfied.

These 4 requirements to be a CDE are deemed to be satisfied if the entity is a CDFI or a “specialized small business investment company a (a “SSBIC”).

A CDFI automatically qualifies as a CDE and does not need to apply to the CDFI Fund to be a CDE. A “CDFI” is a financial institution (a) provides credit and financial services to underserved markets and populations; (b) that has been certified as such by the CDFI Fund; and (c) may be a (i) community development bank (which is a commercial bank organized to generate economic development in low- to moderate-income geographical areas and serve residents of such areas); (ii) community development credit union (which is a member-owned financial cooperative, controlled by its members, and organized to assist people by providing its members credit at competitive rates to provide other financial services in connection with community development); (iii) community development loan fund (which provides financing and development services to businesses, organizations, and individuals in low-income communities, including microenterprise, small business, housing, and community service organizations); (iv) community development venture capital fund (which provides equity capital to businesses in underinvested markets, seeks market-rate financial returns, as well as the creation of good jobs, wealth, and entrepreneurial capacity); (v) microenterprise development loan fund (which provides financing to individuals and small businesses in low-income communities); or (vi) community development corporation (which is a nonprofit corporation organized to provide programs, offer services and engage in other activities that promote and support community development, including affordable housing, education, community organizing and real estate development).

A SSBIC is any small business investment company that (a) invests solely in small business concerns that contribute to a well-balanced national economy by facilitating ownership in such concerns by persons whose participation in the free enterprise system is hampered because of social or economic disadvantages; (b) is organized or chartered under state business or nonprofit corporations statutes, or formed as a limited partnership; and (c) licensed as such by the Small Business Administration.

The 5 major CDFI Fund Programs include:

the NMTC Program (as discussed above);
the Capital Magnet Fund Program (which provides grants for financing of affordable housing activities, as well as related economic development activities and community service facilities);
the Bond Guarantee Program (which provides (a) authorization to issue bonds to provide CDFIs with access to substantial capital that is then used to reignite the economies of very distressed communities, and (b) a 100% guarantee on such bonds through their maturity dates);
the Bank Enterprise Award Program (which provides monetary awards to FDIC-insured depository institutions (such as banks and thrifts) that successfully demonstrate an increase in their investments in CDFIs or in their own lending, investing, or service activities in the most “Distressed Communities”); and
the Healthy Food Initiative Program (which provides funds which can be used to finance business and real estate projects that provide healthy foods).

1. CDFI Fund Capital Magnet Fund Program

The Capital Magnet Fund Program provides grants for financing of affordable housing activities, as well as related economic development activities and community service facilities.

The “Program Applicant” must a CDFI or a “qualified non-profit housing organization.”

A successful Program Applicant may use its Capital Magnet Fund award to (a) finance affordable housing activities; (b) finance related economic development activities; (c) finance community service facilities;

and (d) create financing tools (such as loan loss reserves, revolving loan funds, risk-sharing loans, and loan guarantees).

To find out more information about the Capital Magnet Fund Program or to apply as the Program Applicant to the CDFI Fund, please click the following link:

Apply for CDFI Program Subsidy

2. CDFI Fund Bond Guarantee Program

The Bond Guarantee Program provides (a) authorization to issue bonds to provide CDFIs with access to substantial capital that is then used to reignite the economies of very distressed communities, and (b) a 100% guarantee on such bonds through their maturity dates.

The “Program Applicant” must be a “Qualified Issuer,” which must (a) be a CDFI; (b) be able to issue bonds and make loans; and (c) demonstrate the capacity to perform specialized administrative functions, including loan servicing and financial reporting.

A successful Program Applicant may use the proceeds of its bonds under the Bond Guarantee Program to (a) finance large-scale project (including the development of commercial real estate, housing units, charter schools, daycare or healthcare centers, and municipal infrastructure), and (b) extend credit to other community development Borrowers (the “Borrowers”) or refinance existing loans at low interest rates, freeing up capital for additional investments.

To find out more information about the Bond Guaranteed Program or to apply (a) as the Program Applicant to the CDFI Fund, or (b) as a Program Borrower to a successful Program Applicant, please click the following link:

Apply for CDFI Program Subsidy

3. CDFI Fund Bank Enterprise Award Program

The Bank Enterprise Award Program provides monetary awards to FDIC-insured depository institutions (such as banks and thrifts) that successfully demonstrate an increase in their investments in CDFIs or in their own lending, investing, or service activities in the most “Distressed Communities.”

For this purpose, “Distressed Communities” are those where at least 30% of residents have incomes that are less than the national poverty level and where

the unemployment rate is at least 1.5 times the national unemployment rate.

The “Program Applicant” must be FDIC-insured depository institutions (such as banks and thrifts) that successfully demonstrate an increase in their investments in CDFIs or in their own lending, investing, or service activities in the most distressed communities.

A successful Program Applicant may use its Bank Enterprise Award to provide (a) equity investments, grants, equity-like loans, loans, deposits, and/or technical assistance to CDFIs; (b) direct lending or investment in the form of affordable home mortgages, affordable housing development loans or investments, home improvement loans, education loans, small business loans or investments, small dollar consumer loans, commercial real estate development loans, or investments to residents or businesses located in distressed communities; and (c) access to financial products and services, such as checking accounts, savings accounts, check cashing, financial counseling, new banking branches, or individual development accounts to residents of distressed communities.

To find out more information about the Bank Enterprise Award Program or to apply as the Program Applicant to the CDFI Fund, please click the following link:

Apply for CDFI Program Subsidy

4. CDFI Fund Healthy Food Initiative Program

The Healthy Food Initiative Program provides funds which can be used to finance business and real estate projects that provide healthy foods.

The “Program Applicant” must be a CDFI or a CDE.

A successful Program Applicant uses its Healthy Food Initiative award to finance businesses and real estate projects which provide healthy food options, including grocery stores, farmers markets, bodegas, food co-ops, urban farms, production, distribution or retail aspects of the business cycle.

To find out more information about the Healthy Food Initiative Program or to apply as the Program Applicant to the CDFI Fund, please click the following link:

Apply for CDFI Program Subsidy

WHERE TO FIND US

Chicago
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CONTACT

Community
Reinvestment
Associates, LLC
P.O. Box 57600
Chicago, IL 60657-7366
312.881.0966

WHAT WE DO

We secure pieces of the capital stack

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