Transcript Slide 1
OFN / CFED Briefing
Dan Betancourt, President and CEO
Community First Fund
Lancaster, Pennsylvania
February 22, 2010
www.commfirstfund.org
Organizational Overview
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Private, non-profit community development financial
institution (CDFI) founded in 1992
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Provide loans to small and mid-sized businesses, affordable
housing developers, non-profit organizations
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Provide training and technical assistance
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Lending Offices in Lancaster, York, Reading, Harrisburg,
Exton
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Since 1992, Community First Fund has
o Provided more than 800 loans
o Disbursed over $32 million in loans
50% to Persons of Color
30% to women
Organizational Overview
Small Cities Strategy
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Community First Fund is committed to reducing the concentration
of poverty in small cities and boroughs in Central Pennsylvania
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Community First developed its Small Cities Strategy to
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create opportunities for building wealth in lower income
communities through business and real estate ownership;
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support entrepreneurship and the creation of jobs to bolster the
economy in cities;
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increase the availability of quality, affordable housing and mixed
income housing in cities;
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support nonprofit organizations which provide life enhancing
community services for local residents
Loan Types
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Small business: up to $35,000
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Mid-sized business: $35,000 up to $500,000+
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For non-profits and community development organizations
Real estate
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Typically been in business for two years or more
Community development
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For both start-up and existing businesses
Affordable housing (rental and for sale)
Business real estate in downtowns and lower income communities
Market-rate housing in downtowns
Mixed-income housing
Mixed-use projects
Approved SBA 7(a) Lender and Community Express Lender
Our financing needs
Need for longer term investments to allow longer
term financing for affordable housing and real
estate
Need for equity or equity like products (EQ2)
Utilization of bond market to provide financing
for CDFI’s
Opportunities with FHLB Membership
• Stable and affordable source of liquidity for
community development lending activities
• Leverage CDFI equity and private sector
financing to serve more customers
Opportunities
Increase our impact in small cities by expanding
loan products for small business, business real
estate and non profits and community services
May offer the ability to expand affordable
housing products
Membership allows access to other FHLB
programs that complement our mission
Challenges
• Requirement to pledge collateral will transform the
nature of balance sheet. Reduced flexibility, perceived
shift risk to unsecured creditors (banks, individuals,
foundations)
• Collateral requirements are more restrictive than any
other current source of investment
• Loan to Value maximum of 80%
• ineligible collateral
• “domino effect” with existing unsecured creditors?
Challenges
• Lending values assigned to collateral are deeply
discounted
• Capital stock cost; stock is fluctuating non cash asset
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Potential for additional regulation, and covenants,
“domino effect” of more restrictive covenants with other
investors
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Perceived to have more value to single product lenders
than to multi-product, small cities lender
Challenges
Generally do not meet the “long-term home mortgage”
requirement (five years or greater)
Longer term housing lending will impact liquidity
Potential limitation of borrowing dependent on
performance of the FHLB and its members’ performance
Visit our web site
www.commfirstfund.org