The

report
describes
CDFIs
as
“mission-driven
lenders”
that
balance
financial
sustainability
with
a
focus
on
borrowers
and
markets
that
fall
outside
conventional

underwriting
standards.

“It’s
a
business
model
that
channels
private
investments
into
what
communities
need,”
Brundage
noted
in
the
brief,
citing
examples
ranging
from

disaster
recovery
to
affordable
housing
for
seniors
and

veterans.

At
the
center
of
the
model
is
the
federal
Community
Development
Financial
Institutions
Fund,
created
by

Congress
in
1994
and
housed
within
the

U.S.
Department
of
the
Treasury.
The
fund
certifies
CDFIs
and
administers
programs,
including
the
New
Markets
Tax
Credit
and
the
Capital
Magnet
Fund.

According
to
Treasury
data
cited
in
the
report,
each
dollar
of
CDFI
Fund
financial
assistance
historically
has
leveraged
about
$8
in
private
investment.
Since
its
inception,
the
fund’s
awards
have
helped
catalyze
hundreds
of
billions
of
dollars
in
private
capital
for
low-
and
moderate-income
communities,
the
brief
states.

The
report
comes
as
lawmakers
continue
to
debate
federal
spending
priorities.

In
2025,
more
than
100
members
of
Congress
sent
a
bipartisan
letter
to
Treasury
Secretary
Scott
Bessent
and
Russell
Vought,
director
of
the

White
House
Office
of
Management
and
Budget,

urging
the
Trump
administration
to
continue
carrying
out
the
statutory
obligations
of
the
CDFI
Fund.

The
brief
urges
Congress
to
maintain
stable
funding
and
regulatory
support
for
the
CDFI
Fund,
arguing
that
predictable
federal
backing
allows
CDFIs
to
make
long-term
commitments.
Though
modest
in
size,
the
report
explained,
federal
investment
in
CDFIs
is
“catalytic,”
drawing
significantly
larger
amounts
of
private
capital
into
underserved
communities.

Banks
as
key
partners

The
brief
emphasizes
that
banks
are
major
investors
in
CDFIs,
often
to
meet
obligations
under
the

Community
Reinvestment
Act,
which
encourages
lenders
to
meet
the
credit
needs
of
the
communities
in
which
they
operate.

Major
financial
institutions
have
publicly
detailed
their
CDFI
commitments.
For
one,

Bank
of
America
reports
investing
more
than
$2
billion
with
250-plus
CDFI
partners
nationwide.
The
report
also
noted
that

Capital
One
has
pledged
$600
million
in
support
of
CDFIs
as
part
of
a
broader
$265
billion
community
benefits
plan
tied
to
its

acquisition
of

Discover.

Other
focus
areas

The
report
points
to
affordable
housing
as
a
central
focus.
In
fiscal
year
2022,
recipients
of
financial
assistance
from
the
CDFI
Fund
financed
more
than
54,000
affordable
housing
units.

CDFIs
provide
predevelopment,
acquisition
and
construction
loans,
often
layering
funding
sources
such
as

Low-Income
Housing
Tax
Credits
(LIHTC).
They
also
finance
first-time
homebuyers
who
may
fall
outside
traditional
underwriting
standards
but
show
an
ability
to
repay.

Nationwide,
CDFIs
issue
about
$2
billion
in
mortgages
annually,
according
to
the

Opportunity
Finance
Network.

Small-business
lending
is
another
key
role.
CDFI
Program
awardees
have
financed
more
than
100,000
businesses
annually
in
recent
years,
the
report
stated,
supporting
entrepreneurs
who
may
not
qualify
for
conventional
loans.
Opportunity
Finance
Network
members
collectively
have
helped
create
or
maintain
3.4
million
jobs.

CDFIs’
reach
is
crucial
in
rural
and
tribal
communities,
where
bank
closures
have
limited
access
to
credit.
Native
CDFIs
specialize
in
lending
that
accounts
for
tribal
sovereignty
and
trust
land
status.
Some
5.6
million

rural
households
are
considered
cost-burdened,
spending
more
than
30%
of
their
income
on
housing,
the
report
notes.

CDFIs
also
act
as
financial
first
responders
after
disasters,
offering
emergency
business
loans,
bridge
financing
and
home
repair
loans
when
traditional
lending
slows.