Community Development Financial Institutions (CDFIs) are uniquely positioned to meet the lending needs of recovering communities. Disasters hit vulnerable communities the hardest, and many CDFIs have decades of experience providing economically disadvantaged individuals with the tools they need to become self-sufficient stakeholders in their own future.
CDFI Coalition Proposal: CDFI Disaster Recovery Fund (Oct. 2026)
Proposed Legislation: Emergency Support for CDFIs and Communities for Disaster Assistance
(a) APPROPRIATION.—There is appropriated, out of amounts in the Treasury not otherwise appropriated, for fiscal 2027 for the Community Development Financial institutions fund program account, emergency support to carry out this section, $500,000,000, which shall remain available until expended for technical and financial assistance in any state or territory determined by the President to warrant individual or individual public aid from the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act between January 1, 2025 and December 31, 2026. Provided that the Fund shall provide grants to certified CDFIs for:
(1) modifications, deferral, and forgiveness of existing loans;
(2) financing for recovery and revitalization of housing, small business, and community facilities; and
(3) Other related and administrative costs.
Justification:
CDFIs are uniquely positioned to deliver swift and targeted financial relief to disaster-prone communities during times of crisis. With deep-rooted relationships in low-income and underinvested areas, CDFIs are ideal partners for distributing emergency funds to small businesses, homeowners, and families who have a tough time accessing complex federal disaster relief programs. In the wake of disasters, access to affordable capital is essential for recovery, rebuilding, and community well-being. CDFIs can ensure that this assistance reaches those who need it most, including remote rural communities. An emergency $500 million appropriation would empower CDFIs to respond quickly and effectively, helping stabilize local economies and expedite recovery efforts where the need is greatest.
The program’s administration would be similar to the CDFI Fund’s Rapid Response Program (RRP), signed into law by President Trump in 2020. The Consolidated Appropriations Act 2021 (PL 116-260) provided $1.25 billion for CDFIs to provide technical and financial services to communities and businesses hard hit by the economic disruptions related to the Coronavirus pandemic.
Based on CDFI performance using proceeds from RRP awards,[1] the CDFI Coalition projects that the CDFIs will use $500 million in supplemental appropriations to:
- Make over 165,000 loans and investments totaling $5.92 billion, including:
- $2.2 billion in flexible consumer loans;
- $1.24 billion in affordable home improvement and purchase loans;
- $840 million in small business and microenterprise loans;
- $520 million in residential real estate financing; and
- 4,600 units of affordable housing.
[1] CDFI Fund FY 2024 Agency Financial Report.
CDFIs Support Disaster Recovery
CDFIs have access to tools that are able to effectively rebuild disinvested communities and make loans to individuals with limited or poor credit histories -requiring more than simply providing access to conventional loans. The flexibility to adapt lending guidelines to the needs of borrowers is possible: allowing for acceptance of unconventional collateral for loans; to help small businesses navigate government red tape; and to provide education, training, and assistance to potential borrowers.
- Providing Financial Services, Loans & investments
- Offering Training & Technical Assistance
- Promoting Development, Enabling Individuals & Communities to Effectively Use Credit & Capital
In the wake of a natural disaster, Americans mobilize billions of dollars in relief through foundations, individuals, and the public sector. While those resources go toward the rebuilding of infrastructure, individual assistance, and the meeting of immediate needs, they also support more complicated medium and long-term efforts to rebuild and repair housing, replace damaged building stock, and jump-start economic activity.
FEMA can handle much of the short-term emergency assistance, but long after federal government is gone, mission-driven lenders – particularly those with long-standing ties to affected communities – will be on the ground working to restore housing stock, rebuild community facilities, and provide technical assistance and financial assistance to businesses and families.
CDFI Disaster Recovery Stories
- Phoenix,
- Oregon
- Network for Oregon Affordable Housing
- Fires, Restoring Housing, Rural
- Buffalo,
- New York
- Grow America Fund
- Fires, Loan Fund, Small Business, Small Business Recovery
- Marysville,
- Ohio
- Grow America
- Affordable Housing, Fires, Restoring Housing
- Loyall,
- Kentucky
- Mountain Association
- Disaster Recovery, Fires, Loan Fund, OFN Stories, Restoring Housing, Rural
- Baltimore,
- Maryland
- Neighborhood Impact Investment Fund
- Arts and Culture, Disaster Recovery, Fires, Loan Fund, Small Business, Small Business Recovery
- Birmingham,
- Alabama
- Inclusiv, Sixth Avenue Baptist FCU
- Affordable Housing, CDFI Credit Unions, Consumer Finance, Fires, Progress Report, Restoring Housing
- Gulf Coast,
- Mississippi
- Renaissance Community Loan Fund
- GO-ZONE (2005), Restoring Housing
- Gulf Coast,
- Alabama, Louisiana, Mississippi, Texas
- GO-ZONE (2005)
- New Orleans,
- Louisiana
- Enterprise Community Loan Fund
- GO-ZONE (2005), Healthcare
- Gulf Coast,
- Alabama, Louisiana, Mississippi
- Enterprise Community Partners, Local Initiatives Support Corporation
- GO-ZONE (2005)
- Surf City,
- North Carolina
- Partner Community Capital, Thread Capital
- Groceries and Healthy Food, Hurricane Florence, Small Business, Small Business Recovery
- Maggie Valley,
- North Carolina
- Carolina Small Business Development Fund
- Hurricane Helene, Rural Development, Small Business, Small Business Recovery
- Cherokee,
- North Carolina
- Sequoia Fund
- Hurricane Helene, Small Business
- Pinellas, Pasco, and Hernando Counties,
- Florida
- Florida Community Loan Fund
- Hurricane Helene, Loan Fund, Shelters and Community Food
- Southwest Virginia,
- Virginia
- People Incorporated Financial Services
- Disaster Recovery, Hurricane Helene, Rural
- South Georgia,
- Georgia
- Access to Capital for Entrepreneurs
- Disaster Recovery, Hurricane Helene, Loan Fund, Small Business Recovery
- Western North Carolina,
- North Carolina
- Partner Community Capital
- Disaster Recovery, Hurricane Helene, Loan Fund, Small Business Recovery
- North Port,
- Florida
- Florida Community Loan Fund
- Hurricane Ian, Loan Fund, Youth and Families
- North Port,
- Florida
- Florida Community Loan Fund
- Community Facilities, Education, Hurricane Ian
- Osceola, Lake, and Seminole Counties,
- Florida
- Florida Community Loan Fund
- Affordable Housing, Hurricane Irma, Loan Fund
- Big Pine Key,
- Florida
- Community Housing Capital
- Hurricane Irma, Restoring Housing, Rural
- Guaynabo,
- Puerto Rico
- Cooperativa de Ahorro y Credito Jesus Obrero
- CDFI Credit Unions, Disaster Recovery, Hurricane Maria, Puerto Rico Hurricanes (2017)
- San Juan,
- Puerto Rico
- Inclusiv
- CDFI Credit Unions, Co-Ops, Disaster Recovery, Hurricane Maria, Loan Fund
- Queens and Brooklyn,
- New York
- Low Income Investment Fund
- Disaster Recovery, Hurricane Sandy
- Bedford,
- Texas
- Capital Plus Financial
- Disaster Recovery, Hurricane Sandy, Loan Fund, Small Business Recovery
- Englewood,
- New Jersey
- New Jersey Community Loan Fund
- Disaster Recovery, Hurricane Sandy, Loan Fund, Small Business Recovery
- Jersey Shore,
- New Jersey
- New Jersey Community Loan Fund
- Disaster Recovery, Housing, Hurricane Sandy, Restoring Housing
- Belle Harbor,
- New York
- Business Outreach Center Capital
- Disaster Recovery, Hurricane Sandy, Small Business Recovery
- Long Beach,
- New York
- Disability Opportunity Fund
- Disaster Recovery, Hurricane Sandy, Restoring Housing
- Western North Carolina,
- North Carolina
- Partner Community Capital
- Disaster Recovery, Hurricane Helene, Loan Fund, Small Business Recovery
- Maggie Valley,
- North Carolina
- Carolina Small Business Development Fund
- Hurricane Helene, Rural Development, Small Business, Small Business Recovery
- Baltimore,
- Maryland
- Neighborhood Impact Investment Fund
- Arts and Culture, Disaster Recovery, Fires, Loan Fund, Small Business, Small Business Recovery
- Western North Carolina,
- North Carolina
- Partner Community Capital
- Disaster Recovery, Hurricane Helene, Small Business Recovery
- Buffalo,
- New York
- Grow America Fund
- Fires, Loan Fund, Small Business, Small Business Recovery
- Belle Harbor,
- New York
- Business Outreach Center Capital
- Disaster Recovery, Hurricane Sandy, Small Business Recovery
- Northern Vermont,
- Vermont
- NeighborWorks Capital
- Affordable Housing, Disaster Recovery, Homeownership, Tornadoes and Storms
- Chualar,
- California
- California FarmLink
- Groceries and Healthy Food, Small Business, Small Business Recovery, Technical Assistance, Tornadoes and Storms
- Cayce,
- Kentucky
- Community Ventures
- Affordable Housing, Homeownership, Restoring Housing, Rural Development, Tornadoes and Storms
- Big Island,
- Hawaii
- Oweesta Corporation
- Disaster Recovery, Loan Fund, Tribal Economic Development, Tribes and Indigenous People, Volcanoes
- Big Island,
- Hawaii
- Hawaii Community Lending Inc
- Disaster Recovery, Volcanoes