Threats and Opportunities for Low-Income Community Development Investment

"If you need an example of how catalytic public and private impact capital can open private capital markets for low-income communities, consider the scene at The Reinvestment Fund in Philadelphia as bids came in last week for the organization’s $50 million in S&P-rated bonds, only the second such bond offering ever," writes Oscar Perry Abello.

The program, reports, Perry Abello, was oversubscribed in minutes, and the implications of that success are broad:

That anonymous private investors would buy unsubsidized bonds on the open market signals a new source of capital for childcare centers and charter schools, grocery stores and health clinics, energy efficiency upgrades and small businesses in low-income communities across the U.S.

The article includes more details of The Reinvestment Fund's success, as well as the broader potential for CDFIs to tap into the bond market. There is a policy threat from the Trump Administration that could end the sale of bonds by CDFIs, however, though the administration's budget proposal looked far different than the funding package approved by Congress earlier this month.