Opportunity Finance Network

NMTC Awards on Thursday

Mission? On Thursday, the Treasury Department will announce the next round of allocation awards for the New Markets Tax Credit. As with past rounds, Opportunity Finance Network will monitor closely whether the awards fairly include mission-focused organizations.

Today (Tuesday) and tomorrow Treasury is calling congressional representatives to notify them of awards in their states and districts. Treasury plans to hold a series of announcements at multiple--as yet unspecified--locations across the nation.

Let me know if you have heard about results or announcement plans at mpinsky@opportunityfinance.net or by posting a comment on this site.

Member Visits

The Best Part of my Job... is visiting with CDFIs. In the past month, I have traveled to see New Hampshire Community Loan Fund (in Concord), Low Income Investment Fund (San Francisco), Northern California Community Loan Fund (SF), Lenders for Community Development (San Jose), Rural Community Assistance Corporation (Sacramento), and Pacific Community Ventures (San Francisco).

I also got to talk with more than 20 additional Members and Allies at the New England Regional Meeting earlier this month. On July 11th, we will be meeting with some of our West Coast Members and Allies at a regional meeting in San Francisco.

Sitting and talking with you--staff, management, boards--is the single best way for me to understand what you are doing, what challenges you face, and how we might help. I can not do it often enough. I also enjoy explaining what I see happening in and around the industry and reporting on the things we are doing at Opportunity Finance Network, whether that is in one-on-one discussions, staff meetings, Board Meetings, or annual meetings. I am always looking for chances to get out and about, so please let me know if you would like me to come spend some time with you. You can either e-mail me (mpinsky@opportunityfinance.net) or Jill Lukas, my assistant (jlukas@opportunityfinance.net).

I hope to see you soon.

House Hits CDFI Fund

Appropriations Disappointment. The House Appropriations Subcommittee last night approved a disappointing $40 million allocation for the CDFI Fund for fiscal 2007. If enacted this Fall, this would cut funding almost $15 million from the current funding level. Last year the same Subcommittee approved $55 million. The cause seems to be overall pressure to cut funding rather than objections to the Fund; President Bush had proposed to eliminate the Fund and the House Subcommittee is rejecting that recommendation.

This is just the first step of many on the way to a fiscal 2007 budget. The full House Appropriations Committee still must act, and we are working with our partners in the CDFI Coalition to get at least $15 million back. In addition, we have strong support in the Senate that we will try to leverage when the Senate takes up this appropriations measure and when the Senate and House meet to resolve differences.

Looking ahead, one pressing concern is that the $40 million figure could come into play if the Congress fails to pass a budget before it recesses this fall and enacts a continuing resolution. That resolution is almost certain to take the lowest of the pending funding proposals--the House's or the Senate's, or it could take the President's proposal to eliminate the Fund!

We're going to need your help fight back. To volunteer to make calls or write letters, e-mail our policy team at cneas@opportunityfinance.net. To stay up-to-the-minute on the appropriations fight, keep a watch on our policy web site. And if you have suggestions about what we can do to win this fight, please add your comments below.

Guiding Principles for Scale

Board Approved Principles. Yesterday the Opportunity Finance Network Board approved overarching principles to guide our work developing CDFI-centered financing strategies that are capable of significantly increasing the number of people our Network benefits. Here they are:

"Consistent with Opportunity Finance Network's Core Purpose of aligning capital with social, economic, and political justice and our Mission of leading the opportunity finance system to scale, three Principles guide all Opportunity Finance Network scale initiatives:

• First, they must play leadership roles in building and ensuring the performance of new networks of CDFIs, capital markets, developers, and philanthropic partners. The requirements and infrastructure of the networks must continually push the boundaries, reach, and positive impact of the ways in which the partners conduct their business.
• Second, they must incent and reward aggressive yet incremental engagement of the capital markets through risk-share strategies and demonstrated portfolio performance.
• Third, they must provide capital and systems solutions that are readily accessible to and useful for Opportunity Finance Network Members in their efforts to address the critical problems of poor people and communities."

Behind those lofty ideas are two initial products that we expect to introduce in coming months--the responsible subprime mortgage platform to combat predatory lending and the manufactured housing park conversion fund to preserve affordable housing choices for very low income people.

If you are interested in learning more, please contact Laura Sparks on our Financing Team at lsparks@opportunityfinance.net.

Working with the New Brand

It's Easy. First State Community Loan Fund in Delaware is the latest Member CDFI to put the new Opportunity Finance Network brand to use. Lina Page, our Senior Vice President of Strategic Communications, has been working with a growing number of Members to find a comfortable fit with the new brand. This summer, she will begin offering a series of on-line discussions to share what we are learning about the brand and how Members are working with it. We hope to have some Members explain how they are using it. If you would like to be part of that discussion, please contact Lina at lpage@opportunityfinance.net.

NMTC Announcements?

June 1. The word is that the CDFI Fund will announce allocation decisions for the current New Markets Tax Credit round on June 1st.

Please let me know if you know anything more. Thanks.

Board Meeting Update

Guiding Principles.  The Opportunity Finance Board met in Philadelphia today--the first one-day meeting in several years. Because it involved a presentation by our auditors, the meeting packed in a lot of substance. The highlight was the Board's approval of a set of Guiding Principles for our work to support high-volume, mission rich financing strategies as well as corresponding Guiding Principles for our "platform" for responsible subprime mortgages and for our Manufactured Housing Park Conversion Fund. (When I am back in the office tomorrow, I will report in more detail.) The Board also approved a plan to organize Member discussions of policy issues that influence our work but that are not our top advocacy priorities--for example, immigration policy. Our purpose is to learn what Members are thinking about the issues; we do not expect to take formal policy positions unless there is an overwhelming consensus.

Look for a more complete report...

Board Agenda

At the top of the list... . The Opportunity Finance Network Board will meet next Wednesday, May 24th, in Philadelphia.

The two major items on the agenda are a review of Guiding Principles for our financing strategies intended to help the opportunity finance system achieve scale--measured by financing flow, or volume. Our financing team, led by Art Fleming and Beth Lipson, is on the verge of introducing two major new initiatives to the membership--a responsible subprime mortgage product that we will pilot over the next 6-9 months and a financing conduit for CDFIs seeking to help manufactured home park residents purchase their parks to preserve affordability. (We are working closely with the New Hampshire Community Loan Fund, which pioneered manufactured home park conversions, and CFED, which is running the I'M HOME program to support manufactured housing as a choice for low-income households.) Both strategies are "mission rich" and introduce new financing systems that CDFIs will, we hope, be able to use if they fit their individual financing approaches. They will not be for every CDFI, but we have heard lots of enthusiasm so far. After the Board meeting, I will share with you the Board's conclusions.

The second major topic is our efforts to leverage the remarkable policy gains we have made in a difficult time and environment. With 62 Senators--comprising 23 Republicans, 1 Independent, and 38 Democrats--supporting our call for an $80 million appropriation for the CDFI Fund, we have crossed two important thresholds behind the leadership of Sandra Kerr and the support of Cheryl Neas. First, in the Senate's eyes, at least, this is no longer "that Clinton program." Because so many of you have taken the time to explain to your Senators what you are accomplishing in your markets, we have achieved broad support that we expect will only grow in the next 2-3 years. Second, because 60 is a magic number in the Senate--60 votes is what you need to override a veto--we have flexed our muscles in a way that people in Washington notice. It is unlikely that the CDFI Fund on its own will ever become the subject of a veto, but 62 supporters--not to mention the appropriations committee members who support us in committee but who do not sign letters like ours as a matter of good governance--sends a clear message.

Look for updates on the Board's discussion and decisions in about a week.

Honors 4 L4CD

SBA Honors Eric Weaver. The Small Business Administration will honor Eric Weaver, Executive Director of Lenders for Community Development, next Tuesday, May 23rd, in San Jose, CA. SBA is honoring Eric as the "SBA Financial Services Advocate of the Year."

I visited with Eric and several senior L4CD staff last week at their offices in San Jose. The organization is doing well and extending some of its services from up the peninsula to San Francisco in partnership with peer organizations.

New Strategies

Low Income Investment Fund. I met yesterday with Nancy Andrews and her staff at the Low Income Investment Fund. Based in San Francisco and with offices in Los Angeles and New York, LIIF is a pioneer among CDFIs in using off-balance sheet financing to leverage its balance sheet to increase the volume of its financing. In essence, LIIF uses its expertise in finding and structuring high-impact deals to bring other sources of capital into communities. Last year, approximately half of LIIF's $100 million in lending was off-balance sheet. Other CDFIs are increasing their off-balance sheet lending, as well, but LIIF has been developing this strategy since at least 1990. What is different now is that LIIF has started designing its systems--notably its loan servicing systems--to meet the demands of a financing strategy that depends increasingly on fee-based revenue from off-balance sheet transactions. Nancy emphasized that it has taken them several years to figure out some of the complexities. That's the "bad" news. The good news is that she is open to having her staff teach others in the Opportunity Finance Network so that they can learn from LIIF's experiences. One of the defining characteristics of our Members is their willingness to share what they know so that others can succeed.