CDFI funds blocked by OMB would fund affordable housing

The housing cost crisis in the United States is straining household budgets and limiting economic growth. Tackling it requires every financial tool available, public and private. But the federal Office of Management and Budget, or OMB, is slowing the deployment of billions of dollars in congressionally approved funding for community development financial institutions, or CDFIs. The delay is preventing CDFIs from financing the production of housing that most Americans can actually afford, slowing economic growth in both rural and urban communities. 

At issue are grants and tax credits from the Treasury Department’s CDFI Fund, which fuels the work of mission-driven lenders across the country that prioritize financing housing development and mortgages aimed at low- and moderate-income households. CDFIs collectively manage about $436 billion in assets, with roughly half of their lending focused on housing. Every dollar that the CDFI Fund invests leverages $8 in private financing — capital that would not flow into communities but for the initial public investment that seeds it. Treasury Secretary Scott Bessent clearly expressed the importance of CDFIs in a public statement released last March, saying, “This Administration recognizes the important role that the CDFI Fund and CDFIs play in expanding access to capital and providing technical assistance to communities across the United States.”   

OMB has the authority to prevent federal offices from releasing funding and, for months, they have blocked Treasury’s CDFI Fund from deploying billions of dollars in resources. In July, 26 senators (13 Republicans and 13 Democrats — more than a quarter of the entire U.S. Senate) co-signed a letter to the director of OMB asking him to explain why the CDFI Fund’s resources are being withheld. The letter states, “Delay in the obligation of funds hinders critical projects in our states and could constrain the flow of capital to businesses and consumers who need it the most.”  

This week, in response to this pressure, OMB allowed the CDFI Fund to move forward with its funding process for the Financial Assistance Program, for which they received applications more than six months ago, but with a catch. OMB is requiring the CDFI Fund to add additional layers of red tape that will further delay these awards. It is still unclear whether OMB will allow the CDFI Fund to even begin the long overdue process of taking applications for other critical programs such as the Capital Magnet Fund and the Bank Enterprise Awards.

OMB’s approach is inefficient and counterproductive — slowing investment in housing when the president has declared that addressing housing costs is a national priority. The holdup is even more baffling when considering the geography of CDFI lending: The largest concentration of CDFI Fund support flows to states like Mississippi, Louisiana and Texas — places that are voting strongholds for the president. Slow-walking these funds undermines not just national priorities but also local economies in the very regions that stand to benefit most. 

I lead a national network of nonprofit housing developers and CDFIs, and I see firsthand how this delay undermines our ability to finance, build and preserve homes. When projects stall, costs rise and families suffer. Local businesses lose workers who cannot find affordable housing, and entire communities lose momentum for growth.

The stakes could not be higher. America needs more affordable housing, not less. We need public-private partnerships that speed capital into projects, not bureaucratic bottlenecks that slow them down. CDFIs have a proven model, a decades-long track record, and are a force multiplier for private capital. 

OMB must allow the professionals at the Treasury Department to do their jobs and rapidly deploy these resources so that CDFIs can continue expanding access to capital, finance affordable homes and strengthen communities nationwide. In the midst of a housing cost crisis, we can’t afford to slow housing investments.