Announcing a New Funding Round for Secondary Capital
Applications will be reviewed on a rolling basis through February 13, 2017
The Federation has launched the next funding round of Community Development Investment (CDI) Program Secondary Capital to expand innovative credit union services to new and emerging markets.
Contact us at cdinvestment@inclusiv.org today to learn how you can use a secondary capital loan of up to $2 MM to launch high impact community development products in your community.
See below for an excerpt from Credit Unions Seize Low-Income Outreach Opportunities, a recent article in CU Times on how Suncoast and Point West credit unions are employing Federation Secondary Capital.
...Large asset credit unions such as the $7.8 billion Suncoast Credit Union in Tampa, Fla., are using the Federation's secondary capital product to expand affordable housing in the Sunshine state, where homeless rates and home prices are rising. More than 67% of Suncoast's members live in low-income designated areas.
Suncoast's first-time homebuyer mortgage product features expanded underwriting criteria, which allow for a lower credit score, higher LTV ratios and the use of alternative credit history. The credit union also does not require mortgage insurance.
Smaller-asset-size cooperatives such as the $103 million Point West Credit Union have tapped the Federation's secondary capital to support financial services and inclusion initiatives for local immigrant communities. The Portland, Ore.-based credit union has also used its secondary capital to fund affordable non-prime auto loan products.
About Secondary Capital
Secondary Capital is a subordinated loan that can be counted towards a credit union's net worth and can be leveraged by growing CDCUs to expand safe and affordable lending to local communities.
The Federation offers two secondary capital loan products, Secondary Capital I and Secondary Capital II:
• The Federation makes Secondary Capital I loans of up to $500,000 with maturities of 5-7 years and interest rates of between 5%-6%.
• For qualifying credit unions, the Federation offers Secondary Capital II loans of up to $2 million with maturities of 5-7 years and interest rates of between 3.25%-3.75%.
How to Apply
All applications are on the Federation's website, www.inclusiv.org. All credit unions may apply, but only Federation members in good standing may receive funding. Electronic submissions of completed applications are preferred; however, applications may be mailed to the Federation at 39 Broadway, Suite 2140, New York, NY 10006 or faxed to 212-809-3274. If you have questions about your application, please contact us at cdinvestment@inclusiv.org or call Cathi Kim at 800-437-8711 or 212-809-1850, ext. 271.
Only low-income designated credit unions may hold Secondary Capital loans. For more detail about Secondary Capital loans, please refer to NCUA regulations at:
http://www.ecfr.gov/cgi-bin/text-idx?SID=5edb9b65ca8989546e67011954311d55&mc=true&node=se12.7.701_134&rgn=div8
About the Community Development Investment Program
The CDI Program provides capital resources to its member CDCUs seeking funds to increase liquidity, boost net worth, mitigate risk and introduce innovative products. The CDI Program has invested more than $120 million in CDCUs since its inception in 1982.
About the Federation
The National Federation of Community Development Credit Unions is a certified CDFI Intermediary representing community development credit unions that provide credit, savings, transaction services and financial education to more than 5 million residents of low-income urban, rural and reservation-based communities across the United States, and hold over $52 billion in community-controlled assets. Founded in 1974, the Federation is headquartered in Lower Manhattan with offices in Madison, WI. The Federation offers a wide range of advocacy, educational, training, investment, marketing, and outreach programs to support and assist CDCUs. For more information about the Federation and its programs, please visit: www.inclusiv.org.
© 2017 National Federation of Community Development Credit Unions
T 212.809.1850 | F 212.809.3274 | info@inclusiv.org | www.inclusiv.org