Creation of the Virginia Community Development Financial Institution (CDFI) Fund
Summary
A Department of Housing and Community Development (DHCD) report on the Virginia Community Development Financial Institution (CDFI) Fund. It states that during the 2021 Special Session (I) of the General Assembly, Chapter 552, Item Q.1-4 provided $10,000,000 in General Funds to DHCD to establish a special, non-reverting Fund to provide grants to CDFIs, and that the appropriation is one-time. It states that the CDFI Fund operates through the Virginia Small Business Resiliency Fund (VSBRF), whose program design aims to increase capital access for underserved COVID-19-impacted businesses. A closing table lists grant amounts by organization and numbered reporting measures such as jobs retained and total loans made.
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“Creation of the Virginia Community Development Financial Institution (CDFI) Fund.”
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Background: Creation of the Virginia Community Development Financial Institution (CDFI) Fund
During the 2021 Special Session (I) of the General Assembly, Chapter 552, Item 114 Q.1-4 was
adopted 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.
The amount appropriated for the CDFI Fund constitutes a one-time appropriation. Subsection Q 2 of
Chapter 2, Item 115 (2022 Special Session I) requires the Department on or before December 1 of each
year to report to the Secretary of Commerce and Trade, the Governor, and the Chairs of the House
Committee on Appropriations and the Senate Committee on Finance and Appropriations on the Fund,
including the amount of funding committed to projects from the Fund.
CDFIs and the Virginia Ecosystem
The CDFI Fund operates 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. 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 was established in early 2021 to build awareness about the fund,
build relationships to address the financial needs of the underserved in the Commonwealth, and discuss
program design. Very recently, the organization achieved it’s 501 c 3 as the Coalition works to support the
CDFI ecosystem in Virginia and how they can support access to capital and technical assistance to support
housing activities, small business development, and entrepreneurial support. Staff support for the VSBRF
is provided through the Community Revitalization Office at DHCD.
VSBRF Program Design
The Virginia Small Business Resiliency Fund (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; including those owned and operated by women, people of color, and immigrants.
experiencing the highest rates of closures. The VSBRF aims to build new capacity in the eligible institutions
and support the creation and/or expansion of programs and products. The pandemic also highlighted the
fact that many of the sectors that were the most impacted 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.
Application and Award
On November 8, 2021, DHCD received sixteen (16) applications totaling $16,960,139 in grant
requests for a total of $9,700,000 in available VSBRF funds. Staff reviewed applications and scored them
according to the following criteria:
● Leverage and Critical Criteria
● Project Objectives
● Organizational Capacity and Readiness, and
● Projected Impacts and Outcomes
Due to limited funding the decision was made to reduce all requests for the maximum award of $2
million to $1,500,000 in order to fund more organizations and to increase the coverage of the VSBRF
funding around the state. Grant announcements were made in January 2022 and the thirteen (13) awarded
grantees went under contract in February 2022, as listed below. Grant projects, organizations, coverage
area, activities, and budget are included as Appendix A.
Organization Project Name Award
ECDC Enterprise Development Enterprise Development Group’s Small
$1,500,000
Group Business Resiliency Fund
Freedom First Federal Credit Freedom First Federal Credit Union’s Small
$1,500,000
Union Business Fund
Local Initiatives Support Local Initiatives Support Corporation’s Small
$1,500,000
Corporation Business Capital Access Fund
Virginia Community Capital’s Economic
$1,500,000
Virginia Community Capital Equity Fund
Latino Economic Development Latino Economic Development Center’s Small
$955,820
Center Business Recovery Program in Fairfax County
Community Business Partnership’s Small
$700,000
Community Business Partnership Business Resiliency Program
Southeast Rural Community Assistance
Southeast Rural Community Project’s Virginia Small Business Resiliency $589,180
Assistance Project, Inc. Fund
Expanding Food and Farm Micro-and-Small-
$555,000
Foodshed Capital Business Lending in Virginia
Community Investment Community Investment Collaborative’s
$550,000
Collaborative Microloan Program
Alternative Lending Products & Technical
Assistance for Underinvested Small Businesses $150,000
Bridging Virginia in the Greater Richmond Region
Building Capacity for CDFIs to Support
Appalachian Community Capital Underserved Small Businesses in Appalachian $100,000
Corporation Virginia
Peoples Advantage Federal Credit People’s Advantage Federal Credit Union’s
$100,000
Union Small Business Lending Initiative
TOTAL: $9,700,000
Activities and Impacts
As of September 30, 2022, staff have received two quarterly reports from VSBRF grantees. As
reported, two hundred and forty six (246) loans averaging approximately $46,000/each have been made or
leveraged with VSBRF funds. This infusion of capital has supported thirty-eight (38) new businesses and
the expansion or retention of a further one hundred and sixty-eight businesses (168). Further, three
hundred and forty-eight (348) jobs have been retained and one hundred and forty-six (146) jobs created.
A leading CDFI has stated that the VSBRF funds have allowed their lenders to be more flexible in how
they underwrite loans, knowing that they have appropriate reserves, and that none of the “riskier” loans
has performed any differently than more traditional loans.
Of particular note is the number of technical assistance (TA) hours provided to entrepreneurs.
Since program activities began in March more than twenty three hundred (2,300) hours of TA have been
provided to small businesses around Virginia. Some grantees have utilized VSBRF funds to translate their
training materials and curriculums into multiple languages to better serve their target markets. Freedom
First Federal Credit Union is using their increased capacity to open a new branch in the City of
Lynchburg, which will enable their team to provide targeted services and financial assistance to a broader
area of the state. The Latino Economic Development Center, serving Northern Virginia, has provided
approximately one hundred and fifty (150) hours of technical assistance, which is building their pipeline
of bankable businesses, and they have been able to hire additional staff to work with this influx of new
entrepreneurs. They are currently looking for additional TA providers for legal and IT services as demand
for training increases.
As VSBRF funding provides Virginia’s small business focused CDFIs with the ability to meet the
needs of entrepreneurs and small business owners more effectively staff anticipates each reporting period
will continue to yield both qualitative and quantitative outcomes that are impacting the lives of real
Virginians.
Appendix A: Awards, Organizations, Budget, and Coverage
Applicant Locality/Coverage Area Funding Request
Enterprise Development Group’s Small Business Resiliency Fund
$1,500,000 VSBRF
County of Arlington and the $3,946,000 ECDC
ECDC Enterprise Development
Cities of Alexandria, Fairfax,
Group
and Manassas $5,446,000 TOTAL
Enterprise Development Group (EDG) will increase its volume of financial products among underserved
populations in Northern Virginia, primarily immigrant communities and entrepreneurs of color who were
disproportionately impacted by economic impacts of the COVID-19 pandemic. EDG will provide lending
technical assistance pre- and post-loan, deploy microloans up to $50,000 and restructure loans to support
borrowers at risk of default. Further, EDG will leverage loan capital 2:1 to deploy a total of $4.9 million in
microloans, helping 54 businesses to acquire funding.
Freedom First Federal Credit Union’s Small Business Fund
Albemarle County, Alleghany County, Amherst County,
Appomattox County, Augusta County, Bath County, Bedford
County, Bland County, Botetourt County, Buckingham County,
Craig County, Floyd County, Franklin County, Giles County, $1,500,000 VSBRF
Freedom First
Highland County, Montgomery County, Nelson County, Pulaski $12,091,000 FFFCU
Federal Credit
County, Roanoke County, Rockbridge County, Buena Vista $13,591,000 TOTAL
Union (FFFCU)
City, Charlottesville City, Covington City, Lexington City,
Lynchburg City, Radford City, Roanoke City, Salem City,
Staunton City, Waynesboro City, Blacksburg Town,
Christiansburg Town, Pulaski Town, Vinton Town
Freedom First Federal Credit Union (FFFCU) will deploy $1.5 million in small and microloans, establish a loan
loss reserve and establish an Individual Development Account program for business purposes with a focus placed
on small loans and women-, minority- and/or immigrant-owned businesses in distressed communities. This
funding is part of a $13 million lending initiative for over 70 businesses.
Local Initiatives Support Corporation’s Small Business Capital Access Fund
Cities of Chesapeake, Colonial
Heights, Hampton, Hopewell, $1,500,000 VSBRF
Local Initiatives Support $1,030,000 LISC
Newport News, Norfolk,
Corporation (LISC) $2,530,000 TOTAL
Petersburg, Portsmouth, Suffolk,
Virginia Beach
LISC Virginia and LISC Hampton Roads will create the Small Business Capital Access Fund to provide 0%
interest, no-fee recoverable grants between $10,000-50,000 to small businesses, with priority consideration given
to minority-, woman-, veteran- and immigrant-owned small businesses. LISC will expand their respective target
markets into the Tri-Cities (Petersburg, Hopewell and Colonial Heights) and the Greater Hampton Roads
(Chesapeake, Hampton, Newport News, Norfolk, Portsmouth and Suffolk). Capacity will be improved through
the contract of business coaches to provide critical assistance to 60 small businesses.
Virginia Community Capital Economic Equity Fund 2022
$1,500,000 VSBRF
$3,540,000 VCC
Virginia Community Capital (VCC) Commonwealth of Virginia
$5,040,000 TOTAL
Virginia Community Capital (VCC) will expand its Economic Equity Fund Initiative (EEF), providing low-cost
financing for small-, women-, and minority-owned businesses across Virginia that were disproportionately
affected by COVID-19. Funding will assist VCC to deploy an additional $1.5 million through EEF to support 15
or more businesses, expand its loan loss reserve and build internal capacity by hiring a technical assistance
provider specifically for EEF clients and borrowers.
Latino Economic Development Center’s Small Business Recovery Program in Fairfax County
Latino Economic $955,820 VSBRF
Development $389,600 LEDC
Corporation of Fairfax County
Washington, DC $1,345,420 TOTAL
(LEDC)
Latino Economic Development Corporation’s (LEDC) project will be funded in different tiers. LEDC will deploy
$40,000 of the VSBRF funding to conduct a market study to determine small business financing and target
market needs in Fairfax County. Once market validation is complete, LEDC will receive the second tier of
funding in the amount of $915,820 to hire lending and technical assistance staff to provide comprehensive,
culturally and linguistically competent technical assistance to their target market, expand loan loss reserves and
create a $575,000 revolving loan fund to assist 45-60 low- to moderate-income Latino and/or other underserved
small businesses in Fairfax County.
Community Business Partnership’s Small Business Resiliency Program
Counties of Arlington, Fairfax, Frederick, Loudoun,
Montgomery, Prince George, Prince William, Stafford,
Community Business Washington, the cities of Alexandria, Fairfax, Falls Church, $700,000 VSBRF
Partnership (CBP) Manassas, Manassas Park, and the Towns of Clifton, Dumfries, $700,000 TOTAL
Haymarket, Herndon, Leesburg, Occoquan, Quantico,
Shenandoah, Vienna, Warrenton
Community Business Partnership (CBP) will expand its target market into greater Northern Virginia and
diversify its financial products and offerings through a revolving loan fund. CBP will increase its capacity to
support its target markets, including small, women-, immigrant- and minority-owned businesses, specifically at-
home business operators, through business counseling and curriculum in various languages spoken in the
Northern Virginia service area. Funding of $350,000 will be deployed to increase CBP’s lending capacity and a
loan loss reserve to support the lending. CBP will leverage grant dollars to secure future lending capital and
technical financial assistance to help more than 150 borrowers.
Southeast Rural Community Assistance Project’s Virginia Small Business Resiliency Fund
The Counties of Accomack, Alleghany, Amelia, Amherst,
Appomattox, Augusta, Bath, Bedford, Bland,
Botetourt, Brunswick, Buchanan, Buckingham, Campbell,
Caroline, Carroll, Charles City, Clarke, Craig, Cumberland,
Dickenson, Dinwiddie, Essex, Floyd, Fluvanna, Franklin,
Southeast Rural Giles, Gloucester, Goochland, Grayson, Greensville, Halifax,
Community Hanover, Henry, Highland, Isle of Wight, King and Queen, $589,180 VSBRF
Assistance Project Lancaster, Lee, Lunenburg, Madison, Mathews, Mecklenburg, $589,180 TOTAL
Inc. (SERCAP) Montgomery, Nelson, Northampton, Northumberland,
Nottoway, Orange, Page, Patrick, Pittsylvania, Powhatan,
Prince Edward, Prince George, Pulaski, Roanoke, Rockbridge,
Rockingham, Russell, Scott, Shenandoah, Smyth,
Southampton, Surry, Sussex, Tazewell, Washington,
Westmoreland, Wise, Wythe
Southeast Rural Community Assistance Project Inc. (SERCAP) will increase its available loan capital, providing
accessible and affordable financing products to underserved businesses in rural areas of the commonwealth, with
an emphasis on those directly impacted by COVID-19. SERCAP will provide $150,000 in technical assistance to
microenterprises, deploy $665,000 in microloans to more than 40 businesses, and utilize $100,000 for staff
administration of programming.
Expanding Food and Farm Micro-and-Small-Business Lending in Virginia
Counties of Accomack, Albemarle, Alleghany, Amelia,
Amherst, Appomattox, Augusta, Bath, Bedford, Bland,
Botetourt, Brunswick, Buchanan, Buckingham, Campbell,
Caroline, Carroll, Charles City, Charlotte, Chesterfield,
Clarke, Craig, Culpeper, Cumberland, Dickenson,
Dinwiddie, Essex, Fauquier, Floyd, Fluvanna, Franklin,
Frederick, Giles, Gloucester, Goochland, Grayson,
Greene, Greensville, Halifax, Hanover, Henrico, Henry,
Highland, Isle of Wight, James City, King and Queen,
King George, King William, Lancaster, Lee, Loudoun,
Louisa, Lunenburg, Madison, Mathews, Mecklenburg,
Middlesex, Montgomery, Nelson, New Kent, $555,000 VSBRF
Northampton, Northumberland, Nottoway, Orange, Page, $655,000 Foodshed Capital
Foodshed
Patrick, Pittsylvania, Powhatan, Prince Edward, Prince
Capital
George, Prince William, Pulaski, Rappahannock, $1,210,000 TOTAL
Richmond, Roanoke, Rockbridge, Rockingham, Russell,
Scott, Shenandoah, Smyth, Southampton, Spotsylvania,
Stafford, Surry, Sussex, Tazewell, Warren, Washington,
Westmoreland, Wise, Wythe, York; cities of Bedford,
Bristol, Buena Vista, Charlottesville, Chesapeake,
Colonial Heights, Covington, Danville, Emporia, Franklin,
Fredericksburg, Galax, Hampton, Harrisonburg,
Hopewell, Lexington, Lynchburg, Manassas, Manassas
Park, Martinsville, Newport News, Norfolk, Norton,
Petersburg, Poquoson, Portsmouth, Radford, Richmond,
Roanoke, Salem, Staunton, Suffolk, Virginia Beach
Waynesboro, Williamsburg, Winchester
Foodshed Capital will expand microlending and small business lending to Virginia farms and food businesses in
geographies not yet served and funding activities that have traditionally lacked capital investments, including
land procurement, food system infrastructure and food retail development. This project will help revitalize and
boost local food systems in the wake of COVID-19 to ensure long-term food security. Funding will support loan
loss reversal, capital for small and microloans; and operational support for staff. This project will leverage
$750,000 in loans to help 74 food businesses across the commonwealth.
Community Investment Collaborative’s Microloan Program
Community Orange County $550,000 VSBRF
Investment Culpeper County $1,790,718 CIC
Collaborative Madison County
$2,340,718 TOTAL
(CIC) Rappahannock County
Community Investment Collaborative (CIC) will catalyze its next phase of growth with additional capital for
lending in four new counties, deploying $350,000 in loan capital, $50,000 in microgrants and $200,000 in
operations support and leverage $1.41 million in existing loan funds to help 104 businesses get access to capital,
25 new businesses launched and 154 existing businesses grow.
Alternative Lending Products and Technical Assistance for Underinvested Small Businesses
in the Greater Richmond Region
Counties of Amelia, Charles City, Chesterfield, $150,000 VSBRF
Dinwiddie, Goochland, Hanover, Henrico, King William, $ 81,455 Bridging Virginia
Bridging
New Kent, Powhatan, Prince George, Sussex; Cities of
Virginia
Colonial Heights, Hopewell, Petersburg, Richmond; Town $231,455 TOTAL
of Ashland
Bridging Virginia will conduct a capital access study of the Greater Richmond Region to determine a target
market and strategy to achieve Community Development Financial Institution (CDFI) certification status through
the U.S. Department of Treasury. Funding will support increased internal capacity with the addition of an
executive director to execute identified strategic plan deliverables, increase community knowledge of small
business borrowing and how to access capital. An additional $50,000 will be leveraged to create a $100,000
revolving loan fund in connection with technical assistance and counseling to 50 small local businesses.
Building Capacity for CDFIs to Support Underserved Businesses in Appalachian Virginia
$100,000 VSBRF
Appalachian Community Capital Virginia Appalachian Regional $ 20,000 ACC
Corporation (ACC) Commission Region
$120,000 TOTAL
Appalachian Community Capital Corporation (ACC) will build a support network for minority- and immigrant-
owned small businesses in Appalachian Virginia by working with the CDFIs that serve small minority-owned
businesses in the region. Funding will support the development and implementation of a strategy to increase
lending to underserved businesses, provide six CDFIs with resources to provide up to 20 hours of training for
targeted businesses, and the tailoring of financial products and services to meet market and sector needs. Once
this strategy is implemented, the partnering CDFIs will help 40 minority- and immigrant-owned businesses create
or retain 55 jobs.
People’s Advantage Federal Credit Union’s Small Business Lending Initiative
Counties of Amelia, Charles City,
Chesterfield, Cumberland,
Dinwiddie, Goochland, Hanover,
Henrico, King and $100,000 VSBRF
People’s Advantage Federal Credit
Queen, King William, Louisa, New $ 10,000 PAFCU
Union (PAFCU)
Kent, Powhatan, Prince George, $110,000 TOTAL
Richmond, Sussex; Cities of
Colonial Heights, Petersburg; Town
of Ashland
People’s Advantage Federal Credit Union (PAFCU), the only full-service CDFI in Virginia, will expand its
offerings to include lending, affordable deposit products, and technical assistance to businesses in the Greater
Richmond Region. Funding will support the addition of a small business advocate and a loan loss reserve, fund
54 businesses and deploy $1,080,000 into the community.
Appendix B - Cumulative Outcomes through Sep 30, 2022
Applicant TA Expanded Retained New Jobs Jobs Total Total Total Total of
Hours Businesses Businesses Businesses Retained Created Loans of Value Loans
Made Loans Microloans Leveraged
Made
ECDC 304 0 10 12 17 24 22 22 $872,700 $1,610,585
Enterprise
Development
Group
Freedom 40 13 8 8 36 10 141 29 $536,557.24 0
First Federal
Credit Union
(FFFCU)
Local 24 8 1 0 24 12 9 0 $396,000 0
Initiatives
Support
Corporation
(LISC)
Virginia 275 7 12 2 101 26 23 9 0 $4,435,486
Community
Capital
(VCC)
Latino 147.5 2 20 10 32 12 2 2 $60,000 $60,000
Economic
Development
Corporation
of
Washington,
DC (LEDC)
Community 121 10 5 2 65 28 3 1 $100,000 0
Business
Partnership
(CBP)
Southeast 759 2 2 0 5 0 2 2 $90,000 0
Rural
Community
Assistance
Project Inc.
(SERCAP)
Foodshed 132 6 0 3 17 24 10 8 $126,984 $202,440
Capital
Community 411 0 103 0 29 5 17 16 $392,872 0
Investment
Collaborative
(CIC)
Bridging 40 6 3 0 15 12 10 10 $150,000 $120,000
Virginia
Appalachian 0 0 0 0 0 0 0 0 0 0
Community
Capital
Corporation
(ACC)^
People’s 48 7 2 1 7 1 7 7 $166,189.86 0
Advantage
Federal
Credit Union
(PAFCU)*
^ Q2 Reporting not complete for ACC
1. TA Hours
2. Expanded Businesses
3. Retained Businesses
4. New Businesses
5. Jobs Retained
6. Jobs Created
7. Total Loans Made
8. Total of Loans Made
9. Total value microloans
10. Total of Loans Leveraged
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