Established in 2010, the Community Development Financial Institutions (CDFI) Fund’s Bond Guarantee Program (BGP) is an important source of long-term, low-cost capital for CDFIs that’s used to spur economic growth and jump start community revitalization across the country. Since the program’s launch, more than $1.7 billion in bond proceeds have been disbursed in 32 states and the District of Columbia, providing CDFIs with capital at an interest rate of about two percent for a period of up to 29.5 years to support the development of affordable housing, charter schools, early childhood education facilities, and health care centers, among other community assets.
Through the BGP, qualified entities issue bonds that are guaranteed by the U.S. Department of the Treasury and use the proceeds to extend credit to CDFIs for community development purposes. Because the proceeds are loans that must be repaid, the BGP operates at no cost to taxpayers while generating substantial positive community impact.
IFF was one of the first CDFIs to participate in the BGP in 2014, borrowing $25 million that strengthened nonprofits and the communities they serve throughout the Midwest, and we’re proud to have once again been selected to participate in the 2024 BGP. One of 10 CDFIs in the country chosen to participate this year, IFF will receive a $75 million bond loan via Community Reinvestment Fund, USA – which is serving as one of three bond issuers tasked with distributing a record-breaking $498 million in guarantees. This capital will be reinvested in the 10 Midwest states served by IFF to create affordable rental housing, child care centers, health care centers, charter schools, and other community-strengthening facilities.
To learn more about the BGP and the other nine CDFIs that are participating in the 2024 program, click here to read the U.S. Department of the Treasury’s recent press release.