Historic Funding for CDFIs in FY2021 Omnibus Appropriations and COVID-19 Relief Bill
Jamal Habibi
Updated January 7, 2021
On December 22, Congress passed a massive $900 billion FY2021 Omnibus Appropriations and COVID-19 Relief Bill that included historic funding for community development financial institutions (CDFIs). President Trump signed this legislation on December 27. Specifically, the bill provides:
Treasury
- $3 billion in emergency assistance to CDFIs through the CDFI Fund. (page 906-907/2124 in the bill)
- $1.25 billion to the CDFI Fund to respond immediately to the economic impact of the pandemic. No less than $25 million may be used for grants to benefit Native American, Native Hawaiian, and Alaska Native communities.
- $1.75 billion to the CDFI Fund to expand lending, grantmaking, or investment activity in low- or moderate-income minority communities.
- $9 billion for a new Emergency Capital Investment Program (ECIP), to provide low-cost, long-term capital investments to CDFI banks and credit unions as well Minority Depository Institutions (MDIs). (page 898-906/2124)
- $270 million in FY2021 appropriations to the CDFI Fund, an $8 million increase from FY2020. (page 202/2124)
- A five-year extension of the New Markets Tax Credit (NMTC) Program, the largest extension in the history of credit. (page 1869/2124)
- $25 billion in Emergency Rental Assistance through Treasury to provide to state and local government entities, including $400 million for U.S. territories and $800 million for Native Americans, Alaska Natives, and Native Hawaiians. (page 888-889/2124)
Small Business Administration
- $15 billion for Paycheck Protection Program (PPP) loans set aside for community financial institutions (CFIs), which includes CDFIs and Minority Depository Institutions (MDIs), to increase access for minority-owned and other underserved small businesses and nonprofits. (page 837-838/2124)
- $20 billion in new Economic Injury Disaster Loan (EIDL) grants for businesses in low-income communities. (page 840/2124)
- EIDL advances are now non-taxable and no longer reduce PPP loan forgiveness. The EIDL Advance fund allows businesses suffering a substantial economic injury to apply for an advance that does not need to be repaid of up to $1,000 per employee limited to $10,000 total. Prior law stated that any EIDL advance received would reduce PPP Loan Forgiveness, essentially requiring the advance to be repaid. This provision is repealed so the receipt of an EIDL advance will have no impact on PPP loan forgiveness.
Agriculture
- A five-year extension of the Department of Agriculture’s (USDA) Community Facilities Re-lending Program. (page 51/2124)
Housing and Urban Development
- A 4 percent minimum LIHTC rate is established for acquisition LIHTCs and tax-exempt private activity bond-financed developments. (page 1875/2124)
Education
- $60 million for facilities, of which up to $10 million can be used for State Charter Facilities Incentive Grants (SFIG). (page 1036-1037/5593)
View a summary of full appropriations provisions here.
View a summary of full coronavirus relief provisions here.
“All year, our OFN network has been insisting that the public sector invest in CDFIs to help our industry grow exponentially,” said OFN President and CEO Lisa Mensah. “Our country relies on CDFIs to offer affordable, responsible financing in low-wealth communities. CDFIs lend where it counts to make small business loans, affordable home mortgages, and loans to community health centers, retirement facilities, and other critical infrastructure.”