Written by ShaDonte Butler
As a trusted advisor for our members, we see firsthand how institutions work to balance their business goals with supporting the growth and development of the communities they serve. Many of our products can be used to support these areas, but there are two programs that are specifically designed to help our members grow both their communities and their businesses, simultaneously. Our Community Investment Program (CIP) and Economic Development Program (EDP), jointly called Community Investment Cash Advances (CICA), are a prime example of our commitment to helping our members achieve their goals across their businesses.
While CIP and EDP advances each serve a distinct purpose, they are both available in a variety of structures and maturities to provide flexibility to meet the varied needs of our members and offer pricing that is typically less than standard advance rates. CIP advances can be used to support affordable housing products and funds from EDP advances can be used to support small businesses, critical public facility projects and community resources, and infrastructure projects, while also providing funds for recovery efforts in federally declared disaster areas.
These CICA products are a powerful force for driving community development. For example, many of our members are seeing a “housing gap” that exists between the cost of housing and what households earning up to 115% of the area median income can afford. When leveraged effectively, our CIP advance provides a tool to help members support housing needs for those middle income households that often still face affordability challenges, helping simultaneously drive stability in their communities and grow their mortgage portfolios. And, while we may think of lower funding costs as something that benefits the member more than the community, we have seen firsthand how members can use that benefit of a CIP advance to help them refinance loans for small multifamily residential developments. This strategy has helped members to preserve naturally occurring affordable housing units in high-cost markets that are critical to addressing the nation’s housing affordability crisis. Additionally, with the competitive nature of the current multifamily market, members have been able to leverage CICA advances to lower their cost of funding and use those savings to benefit their customers.
When combined with our affordable housing grant programs, our CICA products can have an even more substantial impact on affordable housing, helping to drive both communities and our members’ businesses forward. The combination of providing very real and tangible support in their communities, while building goodwill and helping people achieve the dream of homeownership, makes leveraging a CICA product a valuable tool for a growing number of the Bank’s members. If you’re interested in exploring these options for your own institution, reach out to your relationship manager today!