The Trump administration recently made a decision that could have negative consequences for a large segment of homebuyers traditionally not reached by big banks.
President Donald Trump issued an executive order on March 14 to cut funding for the Community Development Financial Institutions Fund.
Per the executive order, the multi-billion dollar program will see ‘personnel' and ‘function' cuts, reducing them to only what's legally necessary.
Don't Miss:
- This investment company boasts a 33.85% internal rate of return (IRR) for its realized projects, allowing accredited investors to earn passive returns and avoid the headaches of being a landlord.
- Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Last Chance to get 4,000 of its pre-IPO shares for just $0.26/share!
CDFI, which was launched 1994, provides funds to rural areas underserved by big banks. These communities are traditionally in lower-income areas of the country.
Pravina Raghavan, director of the Community Development Financial Institutions Fund, explains the fiscal 2024 impact to Financial Assistance awards was over $408 million. FA awards provide capital for CDFIs to finance affordable housing and increase homeownership among other services in low-income and distressed communities.
After the executive order was issued, there was a swift response from both Democratic and Republican representatives.
A letter co-authored by Sens. Mike Crapo (R-ID) and Mark Warner (D-VA), among others to Treasury Secretary Scott Bessent reaffirmed their support for the CDFI Fund, referencing its positive economic impact.
Trending: BlackRock is calling 2025 the year of alternative assets. One firm from NYC has quietly built a group of 60,000+ investors who have all joined in on an alt asset class previously exclusive to billionaires like Bezos and Gates.
- Massive Demand & Disruptive Potential – Boxabl has received interest for over 190,000 homes, positioning itself as a major disruptor in the housing market.
- Revolutionary Manufacturing Approach – Inspired by Henry Ford’s assembly line, Boxabl’s foldable tiny homes are designed for high-efficiency production, making homeownership more accessible.
- Affordable Investment Opportunity – With homes priced at $60,000, Boxabl is raising $1 billion to scale production, offering investors a chance to own a stake in its growth.
Bessent said during his confirmation hearing earlier this year that he supported CDFIs. He said they played a "very important" role in their target communities.
Through the inception of the fund through February, Arkansas and South Carolina, two states that have voted for Republican presidential candidates since 2000, have received $3.2 billion, and $1.7 billion, respectively.
Rep. French Hill (R-AR) and Sen. Tim Scott (R-SC) have been strong proponents of the fund in the past.
In the letter to Bessent, the Defense Credit Union Council mentioned that a cut to the CDFI would impact 495 CFDI-backed credit unions, providing services for millions of U.S. citizens.
See Also: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.
According to the CDFI's annual report for fiscal 2024, funding was the highest it has ever been to date and yet, still did not fulfill all of the requests received.
"CDFIs play a key role with FHFA and our regulated entities in efforts to address the nation's affordable housing challenges, working on the ground in their communities to deliver positive outcomes for underserved households," then-Federal Housing Finance Agency Director Sandra L. Thompson said in November.
If the executive order stands, there would be an even greater disparity between requests for funding and resources allocated.
Read Next:
- Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.
- Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
