Washington, DC, Jun 12, 2012 -- Today the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Agriculture – Rural Development (USDA-RD) and the U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund) announced a joint "Border Community Capital Initiative" (Border Initiative), a collaboration designed to increase access to capital in the U.S./Mexico border region which includes some of the poorest communities in the country. The announcement is part of a series of initiatives delivered through the White House Rural Council. The Council was launched by President Obama last August to help create jobs and expand opportunities in rural communities.
The three agencies signed a Memorandum of Understanding that will offer up to $200,000 to nonprofit and/or tribal financial institutions serving colonias for direct investment and technical assistance focusing on affordable housing, small businesses, and community facilities. Colonias are communities along the U.S./Mexico border struggling with chronic poverty, the lack of drinking water, inadequate sewage systems, and a shortage of decent, safe and sanitary housing.
The lack of stable funding and capacity among the organizations serving the colonias is a major barrier in the effectiveness of federal programs. The Border Initiative will assist local financial institutions improve their capacity to raise capital, increase lending, and boost investment it in their communities. Strengthening local community development lenders and investors will also widen the channels through which larger private institutions and federal agencies can reach potential home owners, renters, business owners, facilities operators and service providers who need their support. Depending upon the results of the Border Initiative and availability of resources, the agencies may consider extending this collaboration to other persistent poverty regions of the country.
Resources offered through the Border Initiative will support activities such as loan or investment capital, loan loss reserves, program staff costs, information systems, market studies, portfolio analyses and business planning. Applicants may propose to expand lending or investing in affordable housing, small business and/or community facilities that benefits colonias communities or the current low income residents of colonias. Applicants may also propose to secure new sources of capital for existing activities such as these.
• Make grants available to community development lenders and investors serving colonias and colonias residents, pursuant to a Notice of Fund Availability.
• Evaluate the outcomes of the Border Initiative in relation to other HUD grant-making approaches.
The CDFI Fund will:
• Provide scholarships for Border Initiative grantees, allowing staff to attend CDFI Fund sponsored training workshops.
• Provide Border Initiative grantees with technical assistance opportunities.
• Sponsor webinars specific to the needs of Border Initiative grantees.
USDA-Rural Development will:
• Where appropriate and permitted under program regulations, make efforts to award points in relevant program areas for Border Initiative grantees.
• Engage other entities of USDA to assess capacity of Border Initiative grantees to help deliver programs supporting production agriculture businesses and business activities promoting fresh food access and distribution in the border region, and other policy priorities.
Eligible applicants in this initiative include community development lenders and investors, which can include local rural non-profit organizations and/or federally recognized tribes. Applicants may serve other markets than colonias residents and communities, using other sources of financing. Read more about the new Border Initiative.
Since taking office, President Obama's Administration has taken historic steps to improve the lives of rural Americans, put people back to work and build thriving economies in rural communities. From proposing the American Jobs Act to establishing the first-ever White House Rural Council the President is committed to a smarter use of existing Federal resources to foster sustainable economic prosperity and ensure the government is a strong partner for businesses, entrepreneurs and working families in rural communities. The Council is working break down silos and find areas for better collaboration and improved flexibility in government programs and works closely with local governments, non-profits and private companies to leverage federal support.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. Read more about HUD.
The vision of the Treasury Department's Community Development Financial Institutions Fund (the CDFI Fund) is an America in which all people have access to affordable credit, capital and financial services. The CDFI Fund's mission is to expand the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States. Read more about the CDFI Fund..
USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure, and facility programs through a national network of state and local offices. Rural Development has an existing portfolio of more than $165 billion in loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers, and ranchers and improve the quality of life in rural America. Read more about USDA Rural Development.