Bank of America was recently selected as the first issuer of loans to community development financial institutions through the U.S. Treasury’s CDFI Bond Guarantee Program, which was created to address the funding gap for community development institutions.
“The Bond Guarantee Program will raise visibility of the incredibly important work CDFIs do, which often goes unnoticed or underappreciated,” Andrew Plepler, the executive of corporate social responsibility and consumer policy at Bank of America, said. “Our designation as a Qualified Issuer will allow us to have an even greater impact when it comes to improving local economies and the communities we serve.”
Bank of America will lend $100 million to two clients—Enterprise Community Loan Fund and the Local Initiatives Support Corp.—that will use the funds to lend to multi-family housing developments, healthcare facilities and charter schools.
“Our award under the CDFI Bond Guarantee Program strengthens Enterprise’s ability to provide long-term, fixed rate financing that is otherwise unavailable for local community serving developments where the permanent loan is too small for an efficient and economical agency execution,” Lori Chatman, the president of Enterprise Community Loan Fund, said. “We look forward to continuing our relationship with Bank of America.”
The bank is the largest lender for CDFIs in the nation, administering a $1.2 billion portfolio to more than 240 CDFIs. Up to $500 million is available this year, and up to $1 billion could be available next year.