New Biden-Harris Administration Actions Will Advance CDFI Financing of Affordable Housing 

The Treasury Department announced actions aimed at increasing the supply and lowering the cost of housing nationwide.

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Last month, Treasury Secretary Janet Yellen announced several new actions to increase the supply of housing as part of the Biden Administration’s push to lower costs. These provisions will bolster CDFIs’ work in promoting affordable homeownership. 

The efforts Secretary Yellen has announced include:  

• A new Treasury program administered by the CDFI Fund will provide an additional $100 million over the next three years to support the financing of affordable housing. Few details are available about the program, but OFN will be engaging with Treasury as they design the program over the next several months 

• An effort to provide greater interest rate predictability to state and local housing finance agencies borrowing from the Federal Financing Bank to support new housing development 

• A call to action for the Federal Home Loan Banks to increase their spending on housing programs 

• A new How-To Guide to support state and local governments in using recovery funds provided by Treasury to construct housing  

• An update to the Capital Magnet Fund to provide greater flexibility to CDFIs and nonprofits that finance affordable housing.  

Treasury will accept comments on the proposal through August 26, 2024.  

Overall, these efforts are expected to increase the resources available to CDFIs, improve the terms they can offer borrowers, and make it easier for them to participate in affordable housing development projects. 

OFN has been a vocal advocate for the work of CDFIs in the affordable housing space. Last year, we responded to the CDFI Fund’s request for information on the Capital Magnet Fund program alongside many of our members and partners. We have also advocated for changes to the Federal Home Loan Banks, including encouraging them to invest more in affordable housing and increase their partnerships with CDFIs. OFN participated in the Federal Housing Finance Agency’s review of the system last year and submitted recommendations for improvements. We are carefully reviewing the new proposals and plan to submit comments on the updated rule. 

The new provisions signal progress in achieving accessible homeownership for low-income families and a recognition of the key role CDFIs play in addressing the nation’s housing crisis. We look forward to working with Treasury, the CDFI Fund, and our members to ensure these resources can reach their full potential. 

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Tags: Affordable Housing, Biden Administration, CDFI Fund, Public Policy, Treasury