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Several Connecticut-based community development financial institutions (CDFIs) will receive more than $12 million in COVID-19-related funding from the U.S. Department of the Treasury. The grants are part of a $1.25 billion program to provide COVID-19 relief funds to 863 CDFIs nationwide.
The funding will be made through the Treasury Department’s CDFI Rapid Response Program to provide CDFIs with capital to respond to economic challenges created by the COVID-19 pandemic, particularly in underserved communities, according to a statement from the CDFI Fund, part of the Treasury Department.
Funding for the grants had been authorized by COVID-related legislation that Congress passed in December. Vice President Kamala Harris announced the awards Tuesday at the White House with Treasury Secretary Janet Yellen.
“In serving places that the financial sector historically hasn’t served well, CDFIs lift our whole economy up,” Yellen said in a statement. “We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment, meaning that today’s announcement might lead to an additional $10 billion in investment.”
Eligible uses of the funds include financial products, financial services, development services and certain operational activities. CDFIs will also be able to use the funds to build capital reserves and loan-loss reserves.
“These awards provide CDFIs with an unprecedented level of flexible capital to help distressed and underserved communities across the country take meaningful steps towards recovering from the debilitating economic impacts of the COVID-19 pandemic,” CDFI Fund Director Jodie Harris said in the statement. “CDFI RRP awards will enable CDFIs to help businesses keep their doors open, help families make ends meet, and help maintain important community facilities during this difficult time.”
The $12.4 million in grants will be made to eight Connecticut CDFIs in amounts ranging from $500,000 to $1,826,265. New Haven Bank and Rocky Hill-based Nutmeg State Financial Credit Union each received the maximum funding amount.
Other CDFIs receiving $1.8 million include Wallingford-based Capital for Change, Hartford Community Loan Fund, Hartford Economic Development Corp. and Stamford-based Housing Development Fund Inc.
Meriden-based Community Economic Development Fund will receive $972,000, and Cos Cob-based Members Credit Union was awarded $500,000.
