Annual Report - Virginia Community Development Financial Institutions (CDFI) Fund
Summary
The Virginia Community Development Financial Institutions (CDFI) Fund Annual Report. It says Chapter 552, Item 114 Q, adopted April 7, 2021, provided $10,000,000 in general funds to the Department of Housing and Community Development (DHCD) to establish a special, non-reverting Fund for grants to CDFIs and similar entities. The report states that DHCD received $16.96 million in applications and that the initial applications are under review. It says the Fund operates through the Virginia Small Business Resiliency Fund (VSBRF) and that the Virginia CDFI Coalition began meeting in March of 2021. The report ends with an Appendix A list of coalition members and their organizations.
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“Annual Report - Virginia Community Development Financial Institutions (CDFI) Fund.”
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Virginia Community Development Financial Institutions (CDFI) Fund Annual Report
Background: Creation of the Virginia Community Development Financial Institutions (CDFI) Fund
During the 2021 Special Session (I) of the General Assembly, Chapter 552, Item 114 Q was
adopted April 7, 2021, providing $10,000,000 in general funds to the Department of Housing and
Community Development (DHCD) to establish a special, non-reverting Fund to provide grants to
community development financial institutions (CDFIs), community development enterprises (CDE), or
other such similar entities as permitted by law, whose primary purpose is to provide financing in the form
of loans, grants or forgivable loans to small businesses or community revitalization real estate projects in
Virginia. DHCD has already created the program with input from stakeholders and received $16.96 million
in applications demonstrating the strong need for the initiative. The initial applications are under review.
This report meets the requirements Subsection 4 of Chapter 552, Item 114, requiring an annual report
about the fund.
Input from Stakeholders
The CDFI Fund will operate through the Virginia Small Business Resiliency Fund (VSBRF) The
purpose of the VSBRF is to support Virginia-based CDFIs and build their capacity to support communities
and businesses across the state. In response to this opportunity, a majority of Virginia-based CDFIs have
organized, forming a coalition representing the CDFI community in Virginia. CDFIs are private financial
institutions that deliver responsible, affordable financing to help people and communities underserved
by mainstream finance join the economic mainstream. CDFIs can be revolving loan funds, banks, bank
holding companies, credit unions, or venture capital firms. Virginia is home to approximately two dozen
CDFIs as certified by the US Department of Treasury. The Virginia CDFI Coalition (Appendix A) began
meeting in March of 2021 to build awareness about the Fund, to build relationships to address the
financial needs of the underserved in the Commonwealth, and to discuss the program design. During the
initial meetings, DHCD, the Virginia CDFI Coalition, and Virginia First Cities (VFC) enlisted the help of the
State and Local Clinic at the University of Virginia’s School of Law to identify a list of shared priorities for
the design and deployment of the VSBRF. This study was used to assist in informing the Program Design
for the VSBRF. Staff support for the VSBRF is provided through the Community Revitalization Office at the
Department of Housing and Community Development (DHCD).
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VSBRF Program Design and Timeframe
Due to this being the initial year, the VSBRF focused on organizational issues and processes;
program design; opening the grant application up to emerging and existing CDFIs that have a lending
history in Virginia, grant review, and recommending funding for eligible projects that reflect the priorities
listed below.
The VSBRF was created to provide a funding stream that is both highly targeted and highly flexible
so that dollars reach those that need assistance the most and enable the broadest impacts. The VSBRF
seeks to increase capital access for underserved COVID-19-impacted businesses, with those owned and
operated by women, people of color, and immigrants experiencing the highest rates of closures by
building new capacity in the eligible institutions and supporting the creation and/or expansion of
programs and products. The pandemic also highlighted the fact that many of the most impacted sectors
do not have access to the financial and banking resources that will allow them to build a resilient business,
whether by staying open, reopening, or expanding. Through grants made to both existing and emerging
CDFIs, the VSBRF goals include: serving small businesses adversely impacted by the COVID-19 pandemic,
with an emphasis on those sectors which have been disproportionately impacted or historically
economically disadvantaged; increasing economic activity in distressed communities around the
Commonwealth, and increasing the capacity of the CDFI sector to serve these target markets in Virginia.
The VSBRF has $9.7 million available to make awards in the following categories: Planning Grants
for emerging CDFIs capped at $50,000 per organization; Capacity Building Grants for existing CDFIs capped
at $100,000 per organization, and Financial Products and Services Grants for existing CDFIs capped at
$2,000,000 per organization. To be eligible for the VSBRF, entities must be a CDFI or an emerging CDFI as
defined and certified by the U. S. Treasury. Applicants must be able to document each of the following:
the organization is certified by the United States Department of the Treasury as a CDFI as of the date of
application to the VSBRF, or that it is an emerging CDFI working towards this certification; has an
established history of commercial lending; and has an established history of lending in Virginia. To further
the stated goals of the VSBRF, successful applications must address the following program priorities, how
each priority will be furthered by the proposed program design, and how VSBRF funds will be deployed or
leveraged for maximum impact.
1. Expansion of services into un- or underserved geographies, demographies, and business
sectors with a focus on those disproportionately impacted by the COVID-19 pandemic.
Funded applications must show that proposed activities and lending products represent an
expansion of services to a population that is not currently being served by the applicant
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organization. Specifically, expanding programs, products, and services should address
populations that are underbanked and not served by traditional banks and financial institutions,
such as small, women, minority, or immigrant-owned businesses.
2. Timely deployment of dollars or resources.
Funds are intended, in part, to build capacity and provide security and leverage for the recipient
financial institution. Competitive applications will be able to clearly describe how the grant is
directly responsible for increasing the capacity for them to get more capital into their
community. However, the goal for grant funds is to provide timely support to historically
underserved businesses and entrepreneurs and those sectors that have been disproportionately
impacted by the COVID-19 pandemic. Programs, products, and services must ultimately provide
direct support to the target population and target markets, leading to positive outcomes in the
sector.
3. Expansion of technical assistance, services, and lending products.
Funded applications must show that proposed activities and microfinance/small business
products represent an expansion of services to the target populations and target markets.
Specifically, how it would allow the financial institution to provide a wider range of products and
services to better serve the unique needs of small businesses.
4. Capacity building within the Virginia CDFI ecosystem.
CDFIs play an important role in generating economic growth and opportunity in the most
distressed communities. It benefits the overall health of Virginia’s economy to have a healthy
and thriving mission-driven, microfinance/small business sector.
VSBRF Demonstrates Strong Program Demand and Unmet Need in Initial Year
During Fall 2021 DHCD created a website for
the Virginia Small Business Resiliency Fund, published
FY 22 Program Demand vs.
Available Funding
the Program Design and Guidelines, held a virtual “How
CDFI
to Apply” workshop, and developed the portal for CDFIs Requests $16.9 m
to submit grant applications, which opened on October
Available
1. The portal closed on November 8 and DHCD received Funding
$9.7 m
grants request from 15 organizations. As depicted in the
chart, DHCD received $16,960,139.30 in requests, well over the program’s initial appropriation.
The amount of funding requested demonstrates the unmet need in capital for small, minority,
women and immigrant businesses and CDFI institutions in the Commonwealth. DHCD is currently
reviewing the grant applications and is projecting award announcements in early 2022 with
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implementation as early as spring of 2022. Grantees will have between 12 and 24 months to complete
their projects.
The applications received have served to highlight those geographies around the state that are
chronically underserved by flexible financing coupled with technical assistance provided by CDFIs.
Products and services that are proposed for the VSBRF funds would build loan loss reserves that allows
for deployment of capital to “hard to do” deals, provide technical assistance to entrepreneurs and small
businesses in multiple languages, and provide micro lending with loan products of less than $25,000 that
are often needed by small businesses but not always attractive to lenders. The activities that will be
funded by the VSBRF will reach hundreds of small businesses, creating impacts and leveraging dollars
beyond the initial investments.
Even though the Virginia Small Business Resiliency Fund is a new program in Virginia, CDFIs are
not new to the Commonwealth. Virginia's CDFIs have supported communities' revitalization efforts for
over 20 years through partnerships, innovation, and expertise in capital, banking, and finance. CDFIs are
built to drive capital, provide banking resources, and put other community wealth-creating and business
support services into the hands of at-risk populations, rural communities, and other under-resourced
areas (from the private sector) like affordable housing and clean energy. The industry's value has been
widely recognized across the Commonwealth and the initial oversubscription of the program with high
impact projects demonstrates the strong demand for the program.
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Appendix A: CDFI Coalition
Name Organization Website
Leah Fremouw Virginia Community Capital www.vacommunitycapital.org/
Amanda Habansky People's Advantage Federal Credit www.peoplesadvfcu.org
Union
Andrea Longton Opportunity Finance Network www.ofn.org
Amelie Rives Virginia Community Capital www.vccva.org
Laura Bateman Virginia First Cities, Consultant www.vafirstcities.com
Bryan Phipps People's Incorporated www.peopleinc.net
Beth Pusha Southeast Rural Community www.sercap.org
Assistance Project, Inc.
Christina Cain Virginia Department of Housing and www.dhcd.virginia.gov
Community Development
Christine Morris Virginia LISC www.lisc.org/virginia/
Caroline Nowery Virginia Community Capital www.vccva.org
Curtis Thompson TAP Into Hope www.tapintohope.org
David Rupp Movement Bank www.movementbank.com
Debbie Irwin Shenandoah Community Capital Fund www.sccfva.org
Donna Gambrell Appalachian Community Capital www.appalachiancommunitycapit
alcdfi.org/
Devin Journirtte Southeast Rural Community www.sercap.org
Assistance Project, Inc.
Dave Prosser Freedom First Credit Union www.freedomfirst.com
Erika Viccellio Fountain Fund www.fountainfund.org
Gina Falcone VCDC www.vibrantcommunities.us
Ghufran Ahmad Community Business Partnership www.cbponline.org
Harrison Roday Bridging Virginia www.bridgingvirginia.org
Hope Cupit Southeast Rural Community www.sercap.org
Assistance Project, Inc.
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Harold Pettigrew, Jr. Washington Area Community www.wacif.org
Investment Fund
Jane Ferrara Virginia LISC www.lisc.org/virginia/
John Holdsclaw IV National Cooperative Bank www.ncb.coop
James Regimbal Virginia First Cities, Consultant www.vafirstcities.com
Karlene Sinclair-Robinson Community Business Partnership www.cbponline.org
Kenyahda L. Cahoon Democracy Federal Credit Union www.democracyfcu.org
Kelly Harris-Braxton Virginia First Cities www.vafirstcities.com
Lauren Counts Capital Impact Partners www.capitalimpact.org
Laura Dupuy VCDC www.vibrantcommunities.us
Lucian Smith Washington Area Community www.wacif.org
Investment Fund
Mark Scarano Community Business Partnership www.cbponline.org
Margaret Hersh Dupont Community Credit Union www.mydccu.com
Michael Reilly Foodshed Capital www.foodcap.org
Mario Mejia Democracy Federal Credit Union www.democracyfcu.org
Mary Romanello Virginia Community Capital www.vccva.org
Orlando Artze Virginia LISC www.lisc.org/virginia/
Rick Preble RVA Financial Credit Union www.rvafinancial.com
Becca Richardson Virginia LISC www.lisc.org/virginia
Stephen Davis Community Investment Collaborative www.cicville.org
Seth Whetzel Capital Impact Partners www.capitalimpact.org
Shauna Yeldell Washington Area Community www.wacif.org
Investment Fund
Tiffany Hollin-Wright Federal Reserve Bank of Richmond www.rich.frb.org
William Bush Piedmont Housing Alliance www.piedmonthousing.org
Zach Golden Senator Mark Warner's Office www.warner.senate.gov/public/
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