OFN / CFED Briefing Dan Betancourt, President and CEO Community First Fund Lancaster, Pennsylvania

1. OFN / CFED Briefing Dan Betancourt, President and CEO Community First Fund Lancaster, Pennsylvania February 22, 2010 www.commfirstfund.org

2. Organizational Overview • Private, non-profit community development financial institution (CDFI) founded in 1992 • Provide loans to small and mid-sized businesses, affordable housing developers, non-profit organizations • Provide training and technical assistance • Lending Offices in Lancaster, York, Reading, Harrisburg, Exton • Since 1992, Community First Fund has • Provided more than 800 loans • Disbursed over $32 million in loans • 50% to Persons of Color • 30% to women

3. Organizational Overview Small Cities Strategy • Community First Fund is committed to reducing the concentration of poverty in small cities and boroughs in Central Pennsylvania • Community First developed its Small Cities Strategy to • create opportunities for building wealth in lower income communities through business and real estate ownership; • support entrepreneurship and the creation of jobs to bolster the economy in cities; • increase the availability of quality, affordable housing and mixed income housing in cities; • support nonprofit organizations which provide life enhancing community services for local residents

4. Loan Types • Small business: up to $35,000 • For both start-up and existing businesses • Mid-sized business: $35,000 up to $500,000+ • Typically been in business for two years or more • Community development • For non-profits and community development organizations • Real estate • Affordable housing (rental and for sale) • Business real estate in downtowns and lower income communities • Market-rate housing in downtowns • Mixed-income housing • Mixed-use projects • Approved SBA 7(a) Lender and Community Express Lender

5. Our financing needs • Need for longer term investments to allow longer term financing for affordable housing and real estate • Need for equity or equity like products (EQ2) • Utilization of bond market to provide financing for CDFI’s

6. Opportunities with FHLB Membership • Stable and affordable source of liquidity for community development lending activities • Leverage CDFI equity and private sector financing to serve more customers

7. Opportunities • Increase our impact in small cities by expanding loan products for small business, business real estate and non profits and community services • May offer the ability to expand affordable housing products • Membership allows access to other FHLB programs that complement our mission

8. Challenges • Requirement to pledge collateral will transform the nature of balance sheet. Reduced flexibility, perceived shift risk to unsecured creditors (banks, individuals, foundations) • Collateral requirements are more restrictive than any other current source of investment • Loan to Value maximum of 80% • ineligible collateral • “domino effect” with existing unsecured creditors?

9. Challenges • Lending values assigned to collateral are deeply discounted • Capital stock cost; stock is fluctuating non cash asset • Potential for additional regulation, and covenants, “domino effect” of more restrictive covenants with other investors • Perceived to have more value to single product lenders than to multi-product, small cities lender

10. Challenges • Generally do not meet the “long-term home mortgage” requirement (five years or greater) • Longer term housing lending will impact liquidity • Potential limitation of borrowing dependent on performance of the FHLB and its members’ performance

11. Visit our web site www.commfirstfund.org