Community Development Financial Institutions, or CDFIs, are mission-driven lenders certified by the U.S. Department of the Treasury to provide affordable loans, banking services, and financial coaching in places and to people that mainstream banks tend to pass over. As of mid-2025, about 1,374 institutions hold active CDFI certification, and they range from full-service banks to small nonprofit loan funds.1Community Development Financial Institutions Fund. List of Certified CDFIs What ties them together is a legal requirement to direct the majority of their financing to low-income communities or other underserved populations, and a mandate to pair that lending with training, counseling, or technical assistance.
Congress created the CDFI Fund under 12 U.S.C. § 4701 to promote economic revitalization by investing in community development lenders.2Office of the Law Revision Counsel. 12 USC 4701 – Findings and Purposes For a bank to keep the CDFI label, at least 60 percent of its financing activities must flow to low- and moderate-income populations or underserved communities.3FDIC. CDFI Overview The mission has to drive the lending, not just the branding.
The Four Types of CDFIs
CDFIs come in four forms. Which one is relevant to you depends on whether you want a place to keep money, a personal or small business loan, financing for a housing or community project, or startup equity.
Community Development Banks
These are for-profit depository institutions insured by the FDIC. They offer the same products as a conventional bank — checking and savings accounts, small business loans, commercial real estate financing — but they direct their lending toward low-income communities.3FDIC. CDFI Overview Deposits carry standard FDIC insurance.
Community Development Credit Unions
Member-owned, nonprofit cooperatives overseen by the National Credit Union Administration.4National Credit Union Administration. Supervisory Letter – Supervising Low Income Credit Unions and Community Development Credit Unions Because they run as nonprofits, they can often charge lower rates on consumer loans and pay higher yields on savings than commercial banks. Deposits are federally insured through the NCUA’s National Credit Union Share Insurance Fund.
Community Development Loan Funds
Nonprofit intermediaries that pool capital from private investors, foundations, and government sources to finance affordable housing, microloans for startups, and community facilities. Many pair their financing with hands-on coaching: help writing a business plan, managing cash flow, or navigating permitting. Loan funds are not depository institutions, so money placed with them is not FDIC or NCUA insured. That matters if you are thinking about investing in one; it does not affect you if you are simply borrowing from one.
Community Development Venture Capital Funds
These take equity stakes in small businesses in economically distressed areas rather than lending on a fixed repayment schedule. They become part-owners, sharing risk and upside, with the goal of building local jobs and wealth. Like loan funds, they are not federally insured.3FDIC. CDFI Overview
Who CDFIs Are Meant to Serve
CDFIs focus on two categories of borrowers: people who live in geographic areas of concentrated economic distress, and people who face barriers to fair financial services regardless of where they live.
Investment Areas
An investment area is usually a census tract that meets at least one distress marker. The most common qualifiers are a poverty rate of at least 20 percent or a median family income at or below 80 percent of the surrounding metropolitan or statewide median.5CDFI Fund. FAQs for CDFI Investment Area 2011-2015 ACS Data Other qualifying factors include an unemployment rate at least 1.5 times the national average, significant population loss, or location within a federally designated Empowerment Zone or Enterprise Community.
Targeted Populations
Targeted populations are groups who lack adequate access to affordable financial products no matter their zip code. The low-income targeted population covers individuals and families with income at or below 80 percent of the area median. Other targeted populations include identifiable groups such as people with disabilities and residents of public housing who have historically faced credit barriers or been subject to predatory lending.
Native CDFIs
A specialized designation exists for institutions that primarily serve Native American, Alaska Native, and Native Hawaiian communities. To qualify, at least 50 percent of an institution’s financing activity, measured by both number and dollar volume, must serve Native communities, and at least one board member must be accountable to that population, which can be shown through enrollment in a federally recognized tribe.6Community Development Financial Institutions Fund. CDFI Certification Application FAQs
Why Borrowing From a CDFI Can Look Different
CDFIs are not required to use the same underwriting formulas as conventional banks. The certification standards do not dictate how a lender evaluates ability to repay, and many CDFIs use alternative approaches: analyzing bank account cash flow, reviewing rent and utility payment history, weighing a business plan qualitatively, or applying more inclusive credit models with higher debt-to-income thresholds.6Community Development Financial Institutions Fund. CDFI Certification Application FAQs That flexibility is a big part of why they can serve borrowers a traditional lender would decline.
They still evaluate whether you can realistically repay. Expect to provide government-issued identification, proof of residence, and income documentation such as recent tax returns or W-2s. Small business applicants should be ready with a business plan and several months of bank statements. The specifics vary by institution and loan type.
A Rate Ceiling on Small Business Loans
A CDFI that makes small business loans with an annual percentage rate above 36 percent, calculated using the Truth in Lending Act methodology, may be found ineligible for certification. That effectively caps how expensive a CDFI small business loan can get.6Community Development Financial Institutions Fund. CDFI Certification Application FAQs In practice, rates run well below that ceiling. According to the most recently published CDFI Fund data, average small business loan rates from CDFIs ran between roughly 5 and 6 percent, lower than typical SBA loan rates during the same period. Origination fees, application fees, and closing costs vary, so ask about every charge before you apply.
Development Services Come With the Loan
Certification requires CDFIs to provide development services alongside their lending. In practice, that means financial counseling, credit coaching, and business planning or management assistance.6Community Development Financial Institutions Fund. CDFI Certification Application FAQs Some institutions require borrowers to complete a financial education program before closing; others provide ongoing coaching through the life of the loan. For a first-time business owner or someone rebuilding credit, that support is often the most valuable part of working with a CDFI.
Accountability to the Community
Every CDFI must keep representation from its target market on its governing board or an advisory board.7eCFR. 12 CFR 1805.201 – Certification as a Community Development Financial Institution If a CDFI focuses on lending in a particular low-income neighborhood, someone from that neighborhood should sit on the board. The people the institution serves get a direct say in how it operates.
How to Find One and What to Ask
Start with the CDFI Fund’s search tool on the Treasury Department’s website, which lets you filter certified institutions by type and geographic location.8Community Development Financial Institutions Fund. Community Development Financial Institutions Fund Home Once you find a candidate, contact it directly to learn about specific loan products and eligibility. A CDFI bank in your area may offer standard small business loans, while a regional loan fund may specialize in affordable housing or microloans for startups. When you call, ask what documentation is required, whether the lender uses alternative credit criteria, what the all-in cost of the loan looks like, and whether development services are required or optional.
A Note on Funding Uncertainty
The CDFI Fund depends on annual congressional appropriations. The FY 2026 presidential budget proposed eliminating CDFI Fund awards entirely.9White House. Cuts to Woke Programs Fact Sheet Congress holds final authority over appropriations, and the outcome may differ from the proposal. Certified CDFIs continue to lend regardless of federal award decisions, but if you are looking into specific grant-funded programs, check the CDFI Fund’s website for the current status.