Filling a Gap, Meeting a Need

How CHFA is partnering with CDFIs to improve communities, one building at a time.

by Jonathan Cabral

Before + After @ 36 Edgewood Street in Hartford, Connecticut. The renovation of this building was supported by the Hartford Community Loan Fund.

Community Development Financial Institutions (CDFIs) have been strong partners in helping the Connecticut Housing Finance Authority (CHFA) to meet its mission. The origins in the CDFI concept may be traced back to the 19th Century from the first immigrant guilds of New York City and the Prairie Populists. In the 1930s, African-American communities formed the first community development credit unions due to the abandonment of traditional lenders in their communities. The modern day designation of CDFIs originated out of the Riegle Community Development and Regulatory Improvement Act of 1994. The intent was to help promote economic development by providing access to credit through lending and investments in underserved/low-income communities. CDFIs often provide a variety of products and services and must be certified by the CDFI Fund, a branch of the U.S. Treasury Department. CDFIs act to fill gaps in the market for underserved/low-income communities and are supported and funded through a combination of government, bank, and private funding.

After the financial crisis and as a result of the Great Recession, many owners of smaller multifamily properties found access to credit difficult to obtain. Due to this growing gap in the market CHFA, in partnership with CDFIs, created a $5 million loan pool that acts as a credit window open to qualified CDFIs to help finance smaller multifamily properties. Through this loan pool, CDFIs are able to offer acquisition, construction/rehabilitation, and permanent financing for up to 20 years to vacant and/or blighted property with three to 20 units of housing. Properties financed using these funds must be affordable to 80% of Area Median Income or located in a low/moderate income census tract. Since its launch in 2014, the loan pool has financed 33 small multifamily properties and one small mixed-use building totaling 134 units of housing. The three participating CDFIs are Capital for Change, the Hartford Community Loan Fund, and the Housing Development Fund.

With the success of the program, CHFA’s board of directors continues to give support to the program by granting CHFA’s Executive Director the authority to allocate additional funds to the loan pool as needed.


Jonathan Cabral is a Manager in the Planning, Research and Evaluation department with the Connecticut Housing Finance Authority.