What is the CDFI Bond Guarantee Program?

BGP flow chart

The Community Development Financial Institutions (CDFI) Bond Guarantee Program was enacted through the Small Business Jobs Act of 2010 and will inject new and substantial capital into our nation’s most distressed communities. Through the Bond Guarantee Program, eligible CDFIs have access to fixed rate, long-term capital, which they can then use to finance eligible community and economic development purposes, such as small businesses, charter schools, health care facilities, affordable housing and much more.

What is CRF’s Role?

CRF has been approved by the CDFI Fund of the US Treasury to serve as a Qualified Issuer (QI) under the CDFI Bond Guarantee Program.

QIs such as CRF are authorized to submit Guarantee Applications, on behalf of Eligible CDFIs, to issue bonds that are worth a minimum of $100 million in aggregate and 100 percent guaranteed by the Department of Treasury. The bonds are purchased by the Federal Financing Bank (FFB). The bond proceeds extend credit to eligible CDFIs for eligible purposes. In essence, Qualified Issuers serve as a financial intermediary between the federal government and the broader CDFI industry.

Qualified Issuer’s role includes:

  • Assembles and packages Eligible CDFIs into a Bond Issue pool.
  • Serves as a point of contact between the pooled Eligible CDFIs and the CDFI Fund.
  • Submits a Guarantee Application for a Bond Guarantee.
  • Serves in the role of Program Administrator and Servicer, such as receiving and approving Secondary Loan commitments from Eligible CDFIs.
  • Issues Bonds for purchase by the FFB.

What is an Eligible CDFI?

Each Eligible CDFI applicant seeking a Bond Loan must meet the following criteria (Per the CDFI Bond Guarantee Program: Interim Final Rule):

  • Be certified by the CDFI Fund as meeting the eligibility requirements set forth in 12 CFR 1805.201;
  • Have the appropriate expertise, capacity, and experience, or otherwise be qualified to use the proceeds of Bond Loans for Eligible Purposes; and
  • Meet such other criteria and requirements set forth in the applicable Notice of Guarantee Availability, the Guarantee Application, the Bond Loan Requirements, related Bond and Bond Loan documents, and such other requirements of the CDFI Fund.

How do Eligible CDFIs access the capital?

The CDFI Fund’s 2013 Bond Guarantee Program application round is officially closed, however, if you, or a group of CDFIs you partner with, are interested in accessing a potential 2014 CDFI Bond Guarantee round, please contact Jennifer Novak, Director of Structured Finance, at 612.305.2055 or jennifer@crfusa.com.  

If you are interested in receiving future notifications and information on the Bond Guarantee Program, including opportunities to learn more on how your CDFI could access capital, please sign up here.

Additional Resources:

CDFI Fund Bond Guarantee Program website: CDFI Fund - U.S. Treasury - CDFI Bond Guarantee Program