“People are feeling like it’s OK to dream again,” Christina Brooks, chief equity officer for the city of Fort Worth, Texas, told the Fort Worth Star-Telegram in January. “They’re beginning to see that there is a new avenue that they could take that they didn’t even realize was available to them.”
Brooks was referencing the feedback she’s heard from community members, small business owners and nonprofits about the launch of CDFI Friendly Fort Worth, a new initiative to help underrepresented groups in the city access financing for business, homeownership, rental housing, commercial real estate and more. The city committed $3 million to the program.
The program is a project of CDFI Friendly America, which helps bring CDFI financing to underserved cities and towns nationwide. Fort Worth is the third city to join.
CDFI Friendly Fort Worth will help match residents, entrepreneurs and nonprofits to CDFIs around the country to address funding gaps. The group hopes to drive $250 million in financing over the next five years.
“It’s clear that there’s a real potential in Fort Worth,” says Mark Pinsky, CDFI Friendly America’s founding partner. “There are incredibly entrepreneurial people who simply haven’t either had access to capital or felt that they didn’t have access to capital.”
CDFI financing has been lacking in the city, too. For the past 15 years, Fort Worth received less than $40 million in CDFI financing, which Pinsky says amounts to about $40 per capita compared to $235 a person nationally.
Fort Worth city leaders and CDFI Friendly America met with local nonprofits, small businesses, housing developers and economic developers to get a sense of the community’s needs.
“Everything indicated that there’s a very significant problem of access to capital, particularly among Black and Latino borrowers, and that they would be very interested in CDFI financing,” Pinsky says.
In late February, about a month after the Fort Worth-based program launched, the organization had received about 175 loan inquiries totaling about $110 million. Eighteen CDFIs have signed up to offer financing so far.
While most of the interest in financing has come from small businesses and entrepreneurs, small-dollar loans will also be offered. “These are real needs in these people’s lives,” he says. “So, we’ll try to meet all of them.”
“The demand is for every possible financing — for mortgage finance, for consumer finance, for nonprofit finance, commercial, residential — it’s all there,” he adds. “We have an incredibly active network that’s starting to engage now. We’ve referred all of those inquiries to CDFIs, in most cases to multiple CDFIs, and they’re all working on them.”
The first loan was approved in February — a micro-loan for $10,000. By the end of 2022, Pinsky hopes to attract at least $25 million in CDFI financing to Fort Worth through CDFI Friendly Fort Worth. The organization plans to have a board of directors and CEO in place by the fall, and that it will be a fully operational nonprofit by 2023.
CDFI Friendly America will continue to provide mentorship, guidance and technical assistance.
“The Fort Worth organization is going to be controlled by community voices who will have the majority of the seats on the board,” Pinsky says. “Their job is to make sure that it remains relevant and productive and helpful. To do that, they need to learn to work with CDFIs and that’s part of our job.”
Fort Worth joins CDFI Friendly Bloomington and CDFI Friendly South Bend, both in Indiana. Pinsky says his team is working with about a dozen other cities that want to start a program in 2022. The organization is also collaborating with the National League of Cities to educate other communities about CDFIs.
“There’s a lot of demand out there,” he says, adding that the organization is analyzing which communities would benefit most from their program. “We believe that this is going to transform how communities get access to CDFI financing and how CDFIs deliver financing in addition to what they’re already doing so well.”
This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter at capnexus.org.
Erica Sweeney is a freelance journalist based in Little Rock, AR. She covers health, wellness, business and many other topics. Her work has appeared in The New York Times, The Guardian, Good Housekeeping, HuffPost, Parade, Money, Insider and more.