Community Development Financial Institutions (CDFI) funding serve as vital engines of economic growth and financial inclusion in some of the nation’s most underserved communities.
With CDFI funding, communities are able to leverage federal investment to obtain loans, capital and financial services in areas that are often overlooked by traditional financial institutions.
U.S. Sens. Mark R. Warner of Virginia and Mike Crapo of Indiana, co-chairs of the Senate Community Development Finance Caucus, led a bipartisan group of senators in a letter to Office of Management and Budget (OMB) Director Russell Vought, urging swift action to disburse congressionally-appropriated funding from the CDFI Fund. The letter calls for transparency and timeliness in deploying the $324 million allocated in the Fiscal Year 2025 spending package to support more than 1,400 CDFIs across the country.
“Since its inception over three decades ago, the CDFI Fund has proven critical to the CDFI sector’s success and has met the mission to create a public-private partnership to promote access to capital in our most underserved rural and urban communities. Each year, CDFIs leverage federal dollars from the CDFI Fund with private-sector investment to boost small business formation, increase housing production, and deliver new capital to America’s forgotten communities,” the senators wrote.
The CDFI Fund was established in 1994 to promote access to capital in distressed communities. Each year, it enables CDFIs to leverage private capital alongside federal support to build housing, expand access to credit and drive job growth in low-income areas. In the Fiscal Year 2025 appropriations package, Congress allocated $324 million to support the CDFI Fund’s programs. However, as of August, significant delays remain in awarding and obligating the funds, creating uncertainty for the more than 1,400 certified CDFIs that rely on the Fund for program continuity and impact.
“It’s imperative that congressionally-approved funds for the CDFI Fund are deployed strategically and in a timely manner. Delay in the obligation of funds hinders critical projects in our states and could constrain the flow of capital to businesses and consumers who need it the most. To date, the CDFI Fund has yet to announce and disburse awards for five programs within its portfolio even though application periods closed months ago. Furthermore, other programs have yet to publish applications for the current fiscal year. The uncertainty around the deployment of federal funds from the CDFI Fund is concerning but can be addressed expeditiously. Therefore, we request that your office issue a spending plan to Congress outlining the timelines for the obligation of all discretionary funds. The plan should provide Congress and the CDFI community with certainty that there will be continuity in the programs that have been lawfully funded,” the senators said in their letter.
The July 29 letter to vote follows a March 2025 letter to Treasury Secretary Scott Bessent, also led by Warner and Crapo and signed by 23 senators, emphasizing the bipartisan support for the CDFI Fund and highlighting the fund’s critical role in providing capital to underserved communities.
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Rebecca Barnabi
