What Is A CDFI?

CDFIs are community-based specialized financial institutions that serve low income people or work in economically distressed communities, often working in market niches that may be underserved by traditional financial institutions. CDFIs provide a unique and wide range of financial products and services that help customers build wealth and achieve the goal of participating in the ownership society.

The types of products may be similar to those provided by larger, mainstream financial institutions such as mortgage financing for low income or first time homebuyers, small business lending and lending for community facilities. CDFIs generally lend to and make equity investments in markets not served by traditional financial institutions. CDFIs may offer rates and terms that are more flexible and provide services that will help insure that credit is used effectively. CDFIs include regulated institutions such as community development banks and credit unions, and non-regulated institutions such as loan funds and venture capital funds.