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