Community Development Financial Institution

As a Community Financial Development Institution (CDFI) Fahe accesses and leverages funds from the US Treasury Department’s CDFI Fund to provide responsible, affordable lending to low-wealth communities across Appalachia. Fahe makes these loans accessible to our Members and other organizations to launch social enterprises and to support community development projects, ranging from recovery centers and other healthcare facilities to multi-family housing projects with on-site services. Thanks to our deep reaching Network, Fahe is able to provide access to these financial opportunities to areas underserved by traditional banking institutions.

Over the past 25 years, the CDFI Fund has awarded Fahe financial awards totaling $11.3 Million. This investment supported Fahe’s ability to lend $900 Million and serve over 616,000 people. To explain in terms of per-person investment, Fahe leverages every $18 per person investment to create an impact of $1,400 per person.

 This means Fahe has been able to leverage CDFI funds averaging out to around an $18 per person investment to create an impact of $1,400 per person. Thanks to the ongoing support of the CDFI Fund, Fahe is able to build the American Dream.

In addition to the CDFI Fund, Fahe participates in the CDFI Bond Guarantee Program (BGP). Unlike other CDFI Fund programs, the BGP does not offer grants, but is instead a federal credit subsidy program, designed to function at no cost to taxpayers. Through the CDFI Bond Guarantee Program, the Secretary of the Treasury makes debt available to CDFIs from the Federal Financing Bank. The loans provide long-term capital at below-market rates not previously available to CDFIs. The CDFI Bond Guarantee Program has guaranteed over $1.51 Billion in bonds to date.

Fahe has received a total of $35 Million through the CDFI Bond Program which we’ve utilized to build stronger communities in Appalachia.  Fahe specifically targets lending to nonprofit and for profit organizations working in the following spaces: Small Business, Nonprofits, Healthcare, Commercial Real Estate, and Licensed Senior Living Facilities. We utilize this money in a variety of ways, from helping Fahe Members reposition their balance sheets by converting short term liabilities into long term payables, to finance affordable rental housing, and to finance community facilities such as drug and alcohol recovery centers in eastern KY and the coal fields of West Virginia. 

Fahe actively participates in the national discourse around CDFIs. Fahe’s President and CEO Jim King serves as the Board Chair of Opportunity Finance Network (OFN), the country’s national association of CDFIs.  OFN strengthens the CDFI industry through learning opportunities, research, and annual events for their more than 270 CDFIs located in all 50 states.

CDFI Training

Fahe utilizes its long standing and effective engagement of the CDFI Fund to train leaders and provide technical assistance so existing and upcoming CDFIs learn how to utilize the full potential of the fund. Several of our Members graduated from Fahe’s CDFI Bootcamp, an intensive two-day training funded by Well Fargo Housing Foundation. The Bootcamp provided training and gave participants access to lending capital so their organizations could build a track record of lending to help them become established CDFIs. The participants were dubbed The Wells Fargo Fellows in honor of the foundation’s key involvement.

Investments that Work

The CDFI Fund is an investment that works in Appalachia and other persistent poverty areas of the country.  Nationwide, the CDFI industry manages more than $185 Billion, which is creating jobs, providing affordable housing, and driving opportunity into our underserved communities.   

As Fahe and other members of the Partners for Rural Transformation call for more investment in the underserved regions of our country, we will continually acknowledge and advocate for the strengthening of existing high-impact solutions such as CDFIs and the CDFI Fund. From 2010-2014, grant making in Appalachia, the Mississippi Delta and the Rio Grande Valley was around $50 per person – well behind the national average of $451 and $4,096 in San Francisco. Fahe was able to leverage $900 Million from an $11.3 Million investment.  Imagine what we could do if Appalachia were to receive the same level of investment as the rest of the country.

The CDFI Fund is an essential part of Fahe’s commitment to eliminating persistent poverty in Appalachia. As a CDFI we are able to better perform our essential duty as a backbone organization – providing expertise, leadership, and financial opportunity to our Members, local businesses, and communities.