The CDFI Fund was created for the purpose of promoting economic revitalization and community development through investment in and assistance to community development financial institutions (CDFIs). The CDFI Fund was established by the Riegle Community Development and Regulatory Improvement Act of 1994, as a bipartisan initiative.
The CDFI Fund achieves its purpose by promoting access to capital and local economic growth in the following ways:
1. Through its Community Development Financial Institutions Program by directly investing in, supporting and training CDFIs that provide loans, investments, financial services and technical assistance to underserved populations and communities;
2. Through its New Markets Tax Credit Program by providing an allocation of tax credits to Community Development Entities which enable them to attract investment from the private-sector and reinvest these amounts in low-income communities;
3. Through its Bank Enterprise Award Program by providing an incentive to banks to invest in their communities and in other CDFIs; and
4. Through its Native Initiatives, by taking action to provide financial assistance, technical assistance, and training to Native CDFIs and other Native entities proposing to become or create Native CDFIs.
5. Through its CDFI Bond Guarantee Program by issuing bonds to support CDFIs that make investments for eligible community or economic development purposes.
Since its creation, the CDFI Fund has awarded over $2 billion to community development organizations and financial institutions; it has awarded allocations of New Markets Tax Credits which will attract private-sector investments totaling $43.5 billion, including $1 billion of special allocation authority to be used for the recovery and redevelopment of the Gulf Opportunity Zone.