City First Bank and other Community Development Financial Institutions often lack sufficient flexible, patient capital for community development projects. As a result, many credit-worthy projects are unable to obtain affordable financing that meets their needs.
Seeing the need for a different and more flexible financing in the District, City First Enterprises launched our Impact Investment Fund in 2009 and in 2012 became certified as an official CDFI. Part of the City First Family, our fund works together with City First Bank to provide a combination of financing and technical support to ensure that mission-driven projects get the financing they need.
The CFE Impact Investment Fund lends to mission-driven enterprises and projects to expand DC’s supply of affordable homes, neighborhood facilities, decent jobs, and sustainable social enterprises. Every dollar donated to our revolving fund gets continuously recirculated into different projects, helping community residents, organizers, and developers to accomplish projects with significant social impact. We offer below-market rates to projects that meet our mission to increase affordable home ownership opportunities, develop community facilities that anchor neighborhoods, and catalyze reinvestment and good jobs. CFE’s “but for” investment approach ensures that capital goes to projects that would not go forward without CFE’s support. For every dollar donated to our fund, we deploy six dollars to community projects. To date, CFE has invested $6 million with a total impact of $40 million. This year the CDFI Fund has awarded CFE an additional $1.7 million in lending capital to continue its impact in the region.
In particular, we fund:
- Affordable housing, with particular focus on permanent affordability with our partner City First Homes
- Community resources including schools, youth-focused community centers, arts and creative performance spaces, and health and wellness centers
- Small businesses
We will work with our project partners to find the best fit for the mission impact goals of the project.
Typically, we offer the following to borrowers located in the DC metro area:
- Below market rates
- 1-5 year terms
- Real Estate Subordinate Debt – Loan Sizes $250K-$750K, and up to $2.5M
- Small Business Lending– Loan Sizes $50k-$350k
- Lines of Credit
- Term Loans
- Working Capital
- We leverage public and private subsidy to create greater impact. By creatively utilizing private funds, we are able to to leverage public subsidy and enhance the government’s ability to successfully fund high-impact projects.
- Our “but for,” gap financing helps bring partners to the table. The strongest community projects have a team of organizations and individuals supporting them. However, many viable community impact projects fail to come together when the funds or incentives don’t align perfectly. City First Enterprises works with with community organizers, lenders, nonprofits, and government officials to offer flexible funds to help bring projects to life.
- We provide support for mission-driven organizations so they can be financially viable. In many cases, a project needs more than just funds to get off the ground. We work closely with oftentimes non-traditional borrowers (housing cooperatives, small businesses, community groups), to not just provide the assistance to make projects financially viable, but also work with the projects through the lifetime of the loan to ensure the project is successful. When we say patient capital we mean it — we have and will work with community groups and tenants associations to do everything we can to help our borrowers thrive. Our home-ownership program is stewarded by City First Homes. CFHomes provides post-purchase support to every homeowner to help them to be successful in their homes.
- Best projects and impact: City First Enterprises seeks to drive the greatest possible impact with every investment dollar. For every 10 projects we encounter, we fully research 4, and fund 1. We carefully use our investment dollars to bring other funds to the table and finance impact ranging from gentrification response to small business lending. As a part of the City First Family, we lend alongside City First Bank which in 2013 financed 88% of all lending to low- and moderate- income neighborhoods.
- Recirculating funds: City First Enterprises stewards charitably donated funds for amplified impact, loaning our dollars over and over again to creditworthy community projects that would falter without our support.