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CDFI awards more than doubled in 2021 compared to the previous year. Find out where the money was allocated and how your credit union can become eligible for future awards.
CDFI Certification and How It Applies to Credit Unions
A CDFI Certification is a designation conferred by the Community Development Financial Institution (CDFI) Fund of the Department of the Treasury, specifically recognizing a financial institution as specialized in serving low-income communities and those without access to financing.
The certification is available to credit unions and makes an organization eligible to apply for awards from a wide variety of programs through the CDFI Fund. These awards allow CDFIs to finance a range of programs—including mortgage lending for first-time homebuyers, flexible underwriting for community facilities, and commercial loans for businesses in low-income areas.
To learn more about CDFI Certification, check out our article comparing CDFI Certification and CDE Certification.
About the CDFI Data
Much of this data comes from the CDFI Fund's Searchable Award Database, which allows one to find information on awards given from 1996 to present. For a more comprehensive analysis of previous years, check out our article on the history of CDFIs.
CDFI Certifications in 2021
The total number of CDFI-certified institutions continued its upward trend, increasing from 1,146 institutions in 2020 to 1,390 institutions in 2021.
Credit unions are the second most-common type of CDFI, representing 33.4% of all CDFI-certified institutions whereas Loan Funds are the most common and make up approximately 42%. Banks, Thrifts, Depository Institution Holding Companies, and Venture Capital Funds comprise the remaining 24.6%.
CDFI Awards in 2021
The number of CDFI awards more than doubled between 2020 and 2021, increasing from 613 to 1,395 awards.
(NB: DF: Disability Funds; HFFI: Healthy Food Financing Initiative; NACA: Native American CDFI Assistance Program; SDL: Small Dollar Loan Program; FA: Financial Assistance; TA: Technical Assistance)
The vast majority of awards were sourced from the CDFI’s Rapid Response Program (CDFI-RRP), which was designed to quickly and broadly deploy capital to Certified CDFIs through a streamlined application and review process.
The amount of funds given through CDFI awards increased over three-fold between 2020 and 2021. Over $400 million was given in 2020, whereas over $1.4 billion was given in 2021.
Again, most of these funds came out of the CDFI’s Rapid Response Program, which was allocated $1.25 billion by The Consolidated Appropriations Act of 2021 in order to deliver immediate assistance to communities impacted by COVID-19.
There were 863 recipients of these awards—244 of these recipients were credit unions, which received a total of $401.8 million. To learn more about this program and recipients, refer to this press release from the CDFI Fund.
Conclusion
The increases in both CDFI certifications as well as award money received clearly reveal the wide range of benefits the designation presents. As these become more apparent to credit unions, the number of certified organizations should continue to rise as it has over the past year, when it jumped from 224 in 2020 to 464 today.
While these rewards are straightforward, the application process can often unfortunately be the opposite, proving both arduous and time-consuming. To help credit unions interested in certification, CUCollaborate offers a tailored approach based on data-driven insights and guarantees pre-qualification entirely free of charge.
Learn more about our CDFI Certification Consulting Services and begin the process today.
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