CDFIs Are Raising Capital in Public Bond Markets

Community Development Finance Institutions (CDFIs) are allowed to access the public markets to raise capital in 10 states and the District of Columbia. The Reinvestment Fund and Local Initiatives Support Corporation have both recently done so through public bond offerings raising $50 million and $100 million, respectively. As many as a half-dozen more such bonds are in the works, though experts warn that most of the 900 CDFIs are not yet ready to tap into the public capital markets. The bond markets represent serious capital. At the end of last year, the U.S. bond market stood at $39.3 trillion, including $3.8 trillion in municipal bonds. This new funding stream could have big implications for funding housing and community development in low- and moderate-income areas (the U.S. Treasury typically requires CDFIs to target at least 60 percent of their lending to low- and moderate-income areas).

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