Clearinghouse CDFI Secures $100 Million to Aid Community Development Nationwide

Clearinghouse CDFI Gains $100 Million Bond Allocation

Clearinghouse Community Development Financial Institution (CDFI), based in Lake Forest, California, has successfully secured a substantial allocation of $100 million from the U.S. Department of the Treasury’s Bond Guarantee Program (BGP). This financial boost aims to support community and economic development initiatives within low-income, underserved, and rural regions throughout the United States.

Since its inception in 1996, Clearinghouse CDFI has been pivotal in providing over $2.8 billion in loans, significantly impacting more than 2,770 community-focused projects. These initiatives have not only created or retained over 45,250 jobs but have also helped establish or maintain around 14,000 units of affordable housing, directly benefiting approximately 5.2 million people.

Douglas Bystry, the founder, president, and CEO of Clearinghouse CDFI, expressed gratitude to the Treasury Department and the Office of Management and Budget for their diligent analysis and oversight. He emphasizes the program's critical role in fostering job creation and economic growth aligned with the current administration's domestic objectives. Bystry noted, "This program is designed to drive job creation and economic growth while providing crucial affordable housing, aligning with the goals of the administration."

Structure and Function of the CDFI Bond Guarantee Program

The CDFI BGP operates as a federal credit initiative that functions at no cost to taxpayers. Unlike traditional grant programs, the bonds issued under the program represent debt instruments that require repayment. However, historical evidence indicates that the government often generates revenue through interest charged on these debts. This initiative was established via the Small Business Jobs Act of 2010 to meet a pressing market demand for long-term capital, thereby spurring economic growth and facilitating community revitalization efforts.

Qualified issuers, like the Community Reinvestment Fund, can apply to the CDFI Fund for authorization to issue bonds. Once these bonds are sold, the resulting capital allows CDFIs to access significant resources to revitalize some of the most distressed communities across the nation. Bystry highlighted the intention to channel some of these funds into projects, such as new housing developments for steel workers in Mississippi County, Arkansas.

Previous Achievements and Future Prospects

Earlier this year, Clearinghouse CDFI reported the successful repayment of its inaugural $100 million bond issued in 2014 under the CDFI BGP. This transaction marked a milestone as the first bond ever issued and repaid through the program. The capital from this bond allocation was utilized to fund 81 loans, amounting to a total of $196 million across various states, including Texas, Pennsylvania, Nevada, New York, Arizona, and California.

The impact of these investments has been substantial, generating 2,253 permanent and construction jobs while retaining 725 jobs. Furthermore, the financing initiatives have created or preserved 718 affordable housing units.

Bystry noted the ongoing challenges of revitalizing blighted communities, highlighting capital access as a significant hurdle. "Our mission revolves around identifying opportunities that lead to tangible improvements through affordable housing, educational initiatives, healthcare facilities, and small business lending," he stated.

About Clearinghouse Community Development Financial Institution

Clearinghouse CDFI is a mission-focused lender dedicated to financing projects in communities lacking access to traditional capital sources across the nation and within Indian Country. Demonstrating robust financial discipline, the organization has maintained profitability for 26 consecutive years. By balancing profit with purpose, Clearinghouse CDFI continues to yield measurable, positive outcomes in the communities it serves.

For more information, visit www.ccdfi.com.