PRESS RELEASE: House Passes McClellan Legislation to Expand Economic Opportunity Through CDFIs
Office of Senator Jennifer McClellan
For Immediate Release: February 16, 2023
Contact: District09@senate.virginia.gov
House Passes McClellan Legislation to Expand Economic Opportunity Through CDFIs
Bill Codifies and Recapitalizes the Community Development Financial Institutions (CDFI) Fund
RICHMOND, Va. – Today, the House of Delegates passed Sen. Jennifer McClellan’s (D-Richmond) SB 1320, codifying and recapitalizing the Community Development Financial Institutions (CDFI) Fund. CDFIs expand economic opportunity for underserved people, rural areas, and communities by supporting the growth and capacity of Virginia community development lenders, investors, and financial service providers.
SB 1320 passed the House 94-2 after passing the Senate unanimously earlier this month. The bill now moves to the governor’s desk. Sen. Dave Marsden (D-Fairfax) is co-chief patron of the bill, and Del. Danny Marshall (R-Danville) carried companion House legislation that passed the Senate unanimously earlier this week.
SB 1320 will also expand eligibility requirements to include commercial real estate, housing development, and homeownership financing as eligible uses. The bill establishes the Virginia CDFI Fund in statute to become a permanent asset for Virginia's investments in housing and economic development. The bill builds off of an amendment McClellan carried in 2021 to create the CDFI Fund. Since then, CDFI Fund grantees have successfully closed 165 loans, resulting in the creation or retention of 314 jobs.
“The CDFI Fund is a great tool to expand economic opportunity across Virginia and to make sure that small businesses and entrepreneurs can grow their businesses and create jobs,” said Sen. McClellan. “Virginia’s CDFI Fund has been a great success for economic growth, and today’s bill will expand the reach of the Fund to invest in more communities across the Commonwealth - particularly those that have been underserved. I look forward to the governor signing this bipartisan legislation to support economic opportunity.”
“This is a win for small businesses, who are often more susceptible to an unforeseen event, and this helps provide a lifeline,” said Sen. Marsden.
“Small businesses are the economic engine of the Commonwealth. Expanding their access to financing through loans, grants, or forgivable loans, as well as community revitalization real estate projects, will offer new and significant economic development opportunities for our rural areas,” stated Delegate Marshall. “The Commonwealth is a national leader, becoming one of the first states to create a CDFI Fund in the state budget. This public/private partnership can be a model for other states.”
The Virginia CDFI Coalition was formed to help expand access to financial resources for microenterprises and underserved communities.
“Thanks to the efforts of Senators McClellan and Marsden and Delegate Marshall, we are pleased that Virginia is poised to extend the reach of financing in the form of community focused financing for small businesses, micro enterprises, projects to increase housing opportunities, and other community revitalization projects,” said Virginia CDFI Coalition Board of Directors president, Leah Femouw, also the CEO of Bridging Virginia.
The Virginia CDFI Coalition, a collective of more than 25 community development financial institutions (CDFIs) across Virginia includes the Virginia Bankers Association and Virginia First Cities, strong supporters of the bill.
“On behalf of Project:HOMES and our innovative renovation of Bermuda Estates mobile home park in Chesterfield, I am pleased to say that needed gap financing and ongoing support was provided by VCDF to make this a successful and timely project offering alternative affordable housing in Chesterfield County,” said Lee Householder of project:HOMES
“Rush Homes was getting down to the wire with a closing financing commitment on its latest project – Florida Terrace Apartments in Lynchburg – and VCDF, already involved in the construction financing, made another loan commitment to the project that closed the gap and let us start construction,” said Jeff Smith, Rush Homes. “As I said at the time, “We could not have done it without our CDFI.”
