Financial Services

  • Our responsible financial products and services enable OFN's

  • Member CDFIs and investors to create opportunities for people

  • and communities underserved by mainstream financial institutions.

 

Overview

With our Members and investors, OFN is transforming lives and communities across the United States, one CDFI and investment at a time. Our financing team helps CDFIs and other opportunity investors connect capital with communities—urban, rural, and native—where it can have the greatest impact.

Financial Products

OFN lends directly to Member CDFIs through the OFN Financing Fund, which pools capital from multiple sources to on-lend to its Members. Financial products include: Unsecured Senior Loans, Unsecured Subordinated Loans, Secondary Capital Investments, and Secured Participation Loans.

We also offer special programs in Energy Efficiency Finance and Healthy Foods Finance to support projects that promote energy efficiency and environmental sustainability and bring healthy foods to underserved communities.

Financial Services

Banks, foundations, and mission-driven and faith-based organizations engage us for asset management services and structured financing that targets specific markets and/or financing sectors.

CDFI Bond Guarantee Program Qualified Issuer

The CDFI Bond Guarantee Program (BGP), enacted as part of the Small Business Jobs Act of 2010, is an innovative federal credit program that offers credit-worthy certified CDFIs access to affordable long-term capital. Designed to operate at no cost to taxpayers, the BGP enables participating CDFIs to expand and deepen their work towards economic growth and opportunity. For all.

OFN is an approved Qualified Issuer (QI) under the BGP. QIs assemble and submit applications for the BGP and issue Bonds on behalf of the applicant CDFIs.

FAQs

Visit our Frequently Asked Questions or contact Robin Odland, Executive Vice President, Financial Services, at 215.320.4328 to learn more.

If you are interested in any of our financial products but not an OFN Member, visit our Members to find out how to become one.

Products

OFN’s financial products provide Member CDFIs with capital that they lend to consumers, businesses, and projects that are transforming lives and neighborhoods.

We lend directly to Member CDFIs through the OFN Financing Fund, which pools capital from multiple sources to on-lend to its Members. Financial products include: Unsecured Senior Loans, Unsecured Subordinated Loans, and Secured Participation Loans.

We also offer a special program in Healthy Foods Finance to support projects that bring healthy foods to underserved communities.

Participation Loans

To help our members achieve their lending goals, OFN makes secured participation loans with Member CDFIs to end borrowers that benefit low-wealth and underserved communities. Examples of eligible project types include multi-family affordable housing, health care centers, supermarkets, and charter schools. Typically, OFN will consider participating for as much as $2 million with a maximum LTV of 80%. The CDFI must maintain at least 20% of credit exposure in the transaction.

Healthy Food Finance

OFN’s Healthy Foods Finance program offers designated financing for capital projects related to the production, distribution, sale, and consumption of healthy foods. Member CDFIs can access low-cost, long-term loans for healthy food projects in their pipelines. OFN also makes participation loans with Member CDFIs to specific projects. Healthy food businesses and projects range from production and mid-tier food chain enterprises to retail outlets serving "food deserts" (areas lacking access to healthy foods).

For more information about OFN’s Healthy Foods Finance program, contact Robin Odland, Executive Vice President, Financial Services, at 215.320.4328.

Direct CDFI Loans

OFN makes loans directly to our Member CDFIs. Our core product is a senior, unsecured bullet loan with terms from 3-10 years. The pricing is based on term and ranges from 4-5%. The proceeds are then on-lent to end borrowers to finance affordable housing, commercial real estate, community facilities, small businesses and other community development related uses. Loans to CDFIs may be as small as $200,000 and as large as $1,500,000.

Services

Faith-based institutions, foundations, banks, government agencies, and others turn to us to help them leverage capital into social, economic, and political justice. With our shared commitment to excellence and determination to create opportunity for all, we are transforming lives and communities across the nation.

Asset Management

We provide Managed Asset Services to institutional investors, assisting them in placing capital in CDFIs. OFN provides underwriting and monitoring services for third-party investments in CDFIs, leveraging our decades of CDFI expertise to make it easier for institutional investors to invest in CDFIs. We've underwritten 71 loans for asset management clients since 2002, bringing our significant CDFI underwriting experience to these partnerships to help build and manage successful portfolios of CDFI investments.

Structured Financing Funds

We manage structured financing funds that can be used to target specific geographic markets and/or financing sectors (e.g. health care, healthy foods, energy efficiency, community facilities) for multiple third party investors in CDFIs. Our fund management services include identifying investors, sourcing and underwriting deals, loan documentation, and loan monitoring. The structure and investment parameters are determined for each fund according to investor needs and market conditions.

More Information

Click here for answers to Frequently Asked Questions.

Interested investors are invited to contact Robin Odland, Executive Vice President, Financial Services, at 215.320.4328 or rodland@ofn.org.

The CDFI Bond Guarantee Program (BGP), enacted as part of the Small Business Jobs Act of 2010, is an innovative federal credit program that offers credit-worthy certified CDFIs access to affordable long-term capital. The BGP is administered by the CDFI Fund at the Department of Treasury, and in 2015 is authorized to issue up to 7 Bonds for up to $750 million. The minimum Bond issue is $100 million. 

Designed to operate at no cost to taxpayers, the BGP enables participating CDFIs to expand and deepen their work towards economic growth and opportunity. For all.

Bond Guarantee Program Qualified Issuer

OFN is an approved Qualified Issuer (QI) under the BGP. QIs assemble and submit applications for the BGP and issue Bonds on behalf of the applicant CDFIs.

Eligible CDFIs must demonstrate financial strength, experienced management, and provide strong collateral to be considered for the Bond Guarantee Program (BGP). CDFIs must also be able to borrow a minimum of $10 million from the Federal Government.   

To participate in a Bond issuance, CDFIs must first engage a Qualified Issuer (QI). The QI acts as Program Administrator and Servicer for the Bond Issue, much as a Bond Authority or State Finance Agency does for private activity bonds. QIs also apply for Guarantees and issue Bonds on behalf of CDFIs.

All Bond proceeds are passed through QIs to Eligible CDFIs, and must be used to finance eligible activities, including affordable, multifamily rental housing and home ownership, community facilities, charter schools, community health clinics, small business, and commercial real estate.

Learn More

To learn more about how your CDFI can partner with OFN to apply for the Bond Guarantee Program, review the information below and contact Robin Odland, Executive Vice President, Financial Services.

CDFI Eligibility Criteria

CDFIs must be certified by the CDFI Fund and considered credit worthy, with a lending track record indicative of its ability to use Bond proceeds for its proposed purpose. See resources for more about eligibility.

CDFI Requirements

In addition to being fully liable for repayment of principal and interest, CDFIs must pledge eligible collateral (real estate, equipment, accounts receivable, etc.) that meets CDFI Fund-mandated requirements (maximum loan-to-value, valuation requirements, etc.) sufficient to cover principal outstanding and interest under the Bond Guarantee.

If a CDFI borrows less than $100 million at any one time under the Program, it must participate in a group issuance, as no Bond Guarantee can be issued for less than $100 million.

In addition to pledging loan receivables (secondary loans made with Bond proceeds by the CDFI) as collateral for Bond borrowings, CDFIs are required to post 3% of all outstanding Bond principal (which can’t be funded with Bond proceeds) as cash collateral for the life of the Bond (Risk Share Pool).  While in a multiple-CDFI Bond issuance (multiple CDFIs band together to issue a $100 million Bond), an individual CDFI is only responsible for repaying its own Bond borrowings, its 3% cash Risk Share Pool is available to repay unpaid Bond principal of other CDFIs that participate in the same Bond Guarantee issuance (cross collateralized).

FAQs

Who can apply for an OFN loan/investment?

All OFN Members in good standing can apply for loans. If you are a CDFI that is not an OFN Member and would like to apply for one of our loans, learn more about becoming an OFN Member here.

What does it mean to be in good standing?

An OFN Member in good standing is current on Member dues payments, has submitted the most recent FY Member Survey, and is not in default on an OFN Financing Fund agreement (if applicable).

Does my CDFI have to be Aeris-rated to apply for an OFN loan/investment?

No, your CDFI does not have to be Aeris-rated. OFN lends to CDFIs with a track record of proven financial performance. Often, our borrowers are Aeris-rated but a rating is not required. However, when reviewing loan applications, Aeris-rated CDFIs are given preference.

What are the smallest and largest OFN loans/investments available?

OFN’s unsecured loans to CDFIs range between $200,000 and $1,500,000. We will consider other amounts on a case-by-case basis. CDFIs value the relationship they develop with OFN by being a borrower and often apply for additional financing. It is not uncommon for a single CDFI to have multiple facilities with OFN at any given time.

OFN also buys loan participations that may exceed $1,000,000 depending on the project, loan type, security, and other variables.

How can my CDFI apply for a new OFN loan/investment?

If your CDFI does not currently have a loan/investment with OFN, please review the eligibility criteria and contact Robin Odland, Executive Vice President, Financial Services, at 215.320.4328 or rodland@ofn.org to submit an application for financing.

How can my CDFI renew an existing loan/investment from OFN?

If your CDFI is currently an OFN borrower, please contact Robin Odland, Exectuve Vice President, Financial Services, at 215.320.4328 or rodland@ofn.org to submit an application for financing.

How does OFN determine its pricing, term, and structure?

Direct CDFI loans are priced based on term. OFN works with CDFIs to determine the available products that best fit their needs. Pricing may also vary for products used to finance specific sectors (manufactured housing, healthy foods, energy efficiency, small business, etc). For more details on OFN loan features, see our Financial Products or Robin Odland, Executive Vice President, Financial Services, at 215.320.4328 or rodland@ofn.org submit an application for financing.

How long does it take to close a loan/investment from OFN after applying?

Although each transaction is unique, loans generally take approximately 2-3 months from application to closing. In some cases, the process can be expedited but it is best to allow for about 60-90 days when estimating the closing date.

Will OFN consider financial products or investment structures not listed on its website?

OFN is always looking for new ways to support its members. If you have a need for a financial product that we do not offer, please let us know by contacting Robin Odland, Executive Vice President, Financial Services, at 215.320.4328 or rodland@ofn.org.

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