Inclusiv Statement on President’s Budget Proposal Defunding CDFI Award Programs for Second Straight Year
Today, President Trump released his FY 2027 Discretionary Budget Request, recommending the elimination of CDFI Fund discretionary awards, proposing cuts of $204.5 million as part of the overall $73 billion in funding cuts proposed across the federal government.
“At a time when Americans are hoping their government will deliver on affordability and economic opportunity a proposal to cut funding for the CDFI Fund is deeply concerning. More than 70% of CDFI credit unions serve rural communities, and they are effective stewards of federal funding, leveraging CDFI grants at least 8:1 with private capital. Investing in CDFIs is investing in economic opportunity for all Americans,” said Cathie Mahon, President/CEO, Inclusiv.
Like last year’s proposal, this request would effectively eliminate the CDFI Fund’s award programs including Financial Assistance (FA) and Technical Assistance (TA) programming, proposing only minimal administrative funds for oversight and closeout of prior awards, CDFI certification, and administration of the New Markets Tax Credit Program.
In addition, the proposal reduces the CDFI Fund’s administrative funding from $35 million in FY 26 to $19.5 million in FY 27. This reduction is particularly concerning given that the Fund is already facing capacity constraints as it manages the increased workload associated with the recertification process.
Last year, Congress did not adopt the President’s budget proposal and instead maintained full funding for the CDFI Fund at $324 million. And there has been strong support from Congress for the CDFI Fund this year as well. Inclusiv continues to advocate alongside our members, credit union system partners, and CDFI sector allies to ensure CDFIs can continue to effectively serve economically distressed communities across the country.
Despite Congress providing level funding for the CDFI Fund in FY 26, the White House Office of Management and Budget continues to withhold FY 25 and FY 26 CDFI award program funds. This delayed deployment of vital economic development funding is reducing homeownership opportunities and small business job creation in low-income communities across America.
CDFI Fund awards are a highly effective federal investment, leveraging government funds more than 8:1 and investing in the types of projects or lending that would not otherwise be made affordably in communities. CDFI credit unions have used Technical Assistance awards to invest in technology to scale lending and financial service delivery and offer new products and services.
Similarly, community owned and controlled CDFI credit unions have used Financial Assistance awards to finance hundreds of thousands of affordable mortgages for first-time homebuyers, grow small businesses to increase the local tax base and create jobs, and enable individuals to increase financial security with low-cost, reliable financing and the financial coaching to work toward financial goals.
Investments in CDFI credit unions can permanently revolve in communities, creating a powerful long-term economic multiplier effect. The loss of CDFI funding would directly undercut these community investments, especially harming those in areas—like rural communities—where access to affordable credit and financial services is already limited.
The White House Budget release can be found here.