Philadelphia-headquartered Reinvestment Fund in 2017 was one of the first community development financial institutions, or CDFIs, to tap the public bond markets with a rating from S&P.
Proceeds from the new, $69.5 million in general obligation bonds will finance affordable housing, early childhood education and other projects in underserved communities in Pennsylvania, New Jersey, Maryland and Georgia. The buyers of the bond include six institutional investors and three individuals.
“With the support of our bond investors we will have the resources to make even bolder investments in key strategic initiatives around the country,” said Reinvestment Fund’s Donald Hinkle-Brown. That includes expanding its green financing portfolio and capitalizing its Growing Housing Developers Initiative, which provides growth capital for affordable housing developers.
Some of the capital will also go towards the CDFI’s HBCU Brilliance Initiative, which has loaned out over $50 million to historically Black Colleges and Universities since 2018.
Capital markets
The ability of CDFIs to tap public markets for community infrastructure is a game-changer. Capital Impact Partners earlier this year issued close to $123 million in taxable bonds to repay its debt and expand lending and investments.
The Trump administration has targeted federal funding and support for the more than 1,400 CDFIs, many of which are the only lenders for low-income and rural areas. “When national policy hits a roadblock, our longstanding relationship with scores of municipal, county and state governments increase in importance,” Hinkle-Brown told ImpactAlpha.
States stepping up
To expand the lending capacity of CDFIs, the Washington State Department of Commerce last week awarded $5.6 million to 11 local CDFIs. The grants, made through the state government agency’s Equitable Access to Credit program, will support lending for affordable housing, small businesses and early childhood education in Washingtonian communities overlooked by traditional lenders.
Among the grantees are Enterprise Community Loan Fund, the Community Impact Loan Fund, Northwest Access Fund, which lends to seniors and people with disabilities, and Taala Fund on Washington’s Quinault Indian land.
