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Donna Fabiani | September 17, 2010

CDFIs and Affordable Housing Presentation to the North Carolina Affordable Housing Conference: “ Housing Works ”. Donna Fabiani | September 17, 2010. CDFIs and Affordable Housing. What is a Community Development Financial Institution (CDFI)? Who is Opportunity Finance Network? CDFI Industry

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Donna Fabiani | September 17, 2010

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  1. CDFIs and Affordable HousingPresentation to the North Carolina Affordable Housing Conference: “Housing Works” Donna Fabiani | September 17, 2010

  2. CDFIs and Affordable Housing • What is a Community Development Financial Institution (CDFI)? • Who is Opportunity Finance Network? • CDFI Industry • CDFIs and Affordable Housing • Bank-CDFI Relationships

  3. What is a Community Development Financial Institution (CDFI)? • Mission-driven financial institutions serving low-to moderate income communities • Serve customers that cannot meet strict collateral or underwriting requirements • Provide innovative financing products as well as technical assistance • Create economic opportunity in the form of • New jobs • Affordable housing units • Community services • Financial services for the underbanked and unbanked

  4. What is a CDFI? • Four CDFI Institution Types • Community development banks • Community development credit unions • Community development loan funds • Community development venture capital funds • Financing Sectors • Affordable Housing Development and Individual Homeownership • Nonprofits and Community Facilities • Business and Microenterprise • Consumer

  5. Who Is Opportunity Finance Network? • A Network of 182 opportunity finance institutions or CDFIs serving low-income and low-wealth urban, rural, and Native communities in all 50 states • Mission:Lead the opportunity finance system to scale through capital formation, policy, and capacity development • Finance CDFIs, Rate CDFIs, Policy, Knowledge Sharing • Opportunity Finance Network Members have provided more than $23.5 billion in cumulative financing in their markets through 2008

  6. CDFI Industry • U.S. Treasury has certified 900 CDFIs • 568 loan funds • 203 credit unions • 104 banks and bank holding companies Source: CDFI Fund, as of August 31, 2010 • Data available for 495 CDFIs • $29.4 billion in assets • $20.4 billion in direct financing outstanding • Loan Funds are capitalized primarily by bank debt; credit unions and banks by deposits. Source: FY 2008 CDFI Data Project Data

  7. CDFI Industry $ Portfolio Outstanding by Sector Source: FY 2008 CDFI Data Project

  8. CDFI Industry • In FY 2008 CDFIs • Financed the construction or renovation of 60,205 units of affordable housing • Provided 16,405 responsible mortgages to first-time and other home buyers • Financed and assisted businesses that created or maintained 35,624 jobs Source: FY 2008 CDFI Data Project • Cumulatively, OFN Members • Financed 630,000 units of affordable housing

  9. CDFIs and Affordable Housing • 200 CDFIs with $8 billion outstanding • Financing for housing developers • Predevelopment • Acquisition • Construction • Renovation • Working Capital • Bridge loans • Financing for individuals • Home-purchase mortgages for low-income and first-time homebuyers • Down payment assistance • Rehab Loans

  10. CDFIs and Affordable Housing • Manufactured housing park conversions • REO purchases and resale • Technical assistance to developers • First-time homebuyer training & counseling • Federal housing policy

  11. CDFIs and Affordable Housing • 20 Certified CDFIs in North Carolina • NC Housing CDFIs include • Latino Community Credit Union, Durham • NC Community Development Initiative, Raleigh • Self-Help Ventures Fund and Credit Union, Durham • National CDFIs Lending in North Carolina • Housing Assistance Council • Institute for Community Economics Revolving Loan Fund • National Housing Trust Community Development Fund • Rural LISC

  12. CDFI-Bank Partnerships • CDFIs are good investment partners • Active lenders • Performing lenders: Mitigate risks by investing in multiple projects, providing technical assistance • Know and are known by LMI communities • Proven track record • CDFIs’ Roles • Co-lend with banks • Participate with banks • Take subordinate position to bank

  13. CDFI –Bank Partnerships Net charge-off rates compare favorably to FDIC insured financial institutions CDFI Delinquency Rates are typically higher than FDIC insured financial institutions Source: Q4 2009 CDFI Market Conditions Report

  14. CDFI – Bank Partnerships • Demand for CDFI Housing Development financing is trending upward • 53% received more financing applications in 2ndQ 2010 than in 2ndQ 2009 • CDFIs’ Housing Development loan originations are trending upward • 37% reported increase in originations in 2ndQ 2010 over year • Housing CDFIs are capital-constrained • Could have deployed $55 million more in last quarter • Need estimated $400 million in new debt and equity capital in next 12 months • CARS™ Ratings may be available

  15. For more information on CDFIs • www.opportunityfinance.net • CDFIs Side by Side • CDFI Market Conditions Report • CDFI Data Project Report • www.opportunityfinance.net/conference • Donna Fabiani, dfabiani@opportunityfinance.net

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