Transcripts For CSPAN2 Housing 20240703

Find a full schedule on your Program Guide or watch online anytime cspan. Org history. A healthy democracy does not just like this. It looks like this. Americans can see democracy at work citizens are truly informed. A republic thrives. Get informed straight from the source on cspan unfiltered, unbiased, word for word the nations capitol to wherever you are because the opinion that matters the most is your own. This is what democracy looks like. Cspan empowered by cable. Execs ceos from Community Lending develop meant organizations testify on the impact organizations have an Economic Opportunity but they discussed needed investment in underserved lowincome communities. Bridging the gap between rental markets and homeownership. This runs an hour and 20 minutes. Good afternoon. I like to call the subcommittee on housing transportation and Community Development committee to order print out to thank you as always senator you and your staff are working with us on this hearing. What a focus on Community Development Financial Institutions or cdfi and how specifically cdfi can promote Housing Development and Economic Opportunity. I think both center at lummis and i believe everyone in this country should have the freedom and the opportunity to build the lives they want. This is the American Dream and an essential Building Block for pursuing this dream the people have access to capitol and lending and resources so they can buy a home or build a Small Business or get an education. We also know not everyone has equal access to capitol and Financial Services this inequity drives big gaps for disparity, opportunity and wealth which is will be sooner country. Communities of color and Indigenous People and rural areas often do not have the same access to capitol that ends up holding everybody back. According to the Federal Reserve a typical black families net worth is only 15 of a typical white family the average the net worth of hispanic family is about 19 of the white families net worth. Theres less of Data Available on the net worth of native families but a recent analysis by the minneapolis fed found one sample of median native family had a net worth 32 times lower than that of the median white family. That analysis also found home equity is a much smaller portion of a native Families Wealth in part because of the difficulties that native families face in getting mortgages. If you think of Rural Communities the Pew Research Center data shows Rural Counties are about 50 more likely than urban counties to have high rates of concentrated poverty twice the rate of concentrated poverty compared to suburban counties. So it is clear we have a lot of work to do to address these disparities, these challenges. Today we are excited to have the opportunity to hear how cdfi are a powerful toad to expand access to capitol and Financial Services to people in places that have been too often left out of opportunity. Cdf eyes work. They have long had bipartisan support paid when the cds i fund the federal agency that oversees cdfi programs was established in 1994 there were about 80 cdf eyes. Today there are more than 1000 deploy Innovative Strategies rating capitol and resources to underserved communities and all parts of the country. I have seen the power of this work in my Community Helping Small Businesses in building wealth. We note federal investments yield strong results because they Leverage Private capitol. By one estimate cdfi generate 10 new investment on the private side for every 1 dollar federal support. Today we have an opportunity to hear about this work. What is working, what can be improved from three impressive cdfi leaders. They are bringing our newer organizations are bringing jobs and Economic Opportunity to community and helping Small Business get started but cdfi have adopted adapted to meet the needs of very different communities showing this lot of flexibility in this model. Im also hearing a lot of feedback i am interested in hearing feedback on the bipartisan bills that are out there to support that my colleagues and i have been working on. Senator rounds, senator lammas and i have a bill to update the cdf by bomb guarantee program so it works better for smaller that are making low interest longterm sources of capitol available. Im also working senator rounds and center at lummis on the bill to make permanent a Successful Pilot program that supports a mortgage lending on Tribal Trust Land. I would note senator warner and senator hagerty have a build to support the secondary market for cdfi loans several colleagues have bipartisan bills that fall within the finance Committee Jurisdiction to support cdf eyes. I am quite sure this will be an interesting and productive hearing. I look forward to hearing from all of you in continuing our work to support cdf eyes and address the historic inequities we see an Economic System that i believe can be remedied in part by your work. So thank you very much. Center lummis you are recognized for. Thank you ive been looking forward to this hearing cdf eyes are such an important part of addressing the borrowers needs in this country and i am delighted to have experts here today since i do not have much of a voice today i am going to submit my Opening Statement for the record but i am going to highlight a couple paragraphs that i had hoped to bring to peoples attention. For cdf eyes were set up to meet the needs of borrowers that are not well served by traditional banking institutions. And in exchange for doing this essential work cdf eyes are given access to subsidized fund and grant money supplemented with private funds. I am a little disheartened the Treasury Department in managing the cdf iphones is not given cdf by the certainty and flexibility they need to do their work as a treasury revises the certification process many stakeholders have raised concerns about the proposed application the delays in finalizing the application and the transparency of the process but we need robust standard to preserve and protect the cdf by designation. I call on treasury and the funds to run a transparent process and truly take into account the feedback you have received through the Public Comment process. I also want to comment about cdfi meeting access to funding ideally stable longterm funding. I know this is challenging. My would like to for the Witnesses Today how we can best expand the Publicprivate Partnership that is fueled cdf fight landing and increased access to capitol. One source had been advances in the Federal Home Loan Banks. The cdf buys members of the system. However the system has a very, very few native members. I would like to see what we could do to support access to the system for native cdf eyes. They are the Federal Home Loan Bank system has really taking a look see at its mission and its efforts as they look at their 100th anniversary. I want to acknowledge as part of that initiative f hfa held a roundtable together feedback specific to the tribes needs and i want to thank the native leaders who participated. I hope the report includes careful consideration of the feedback from the session and others. With that i want to thank our witnesses so much and i look forward to being here today thank you madam chairman you have always been so gracious about including topics that are really valuable to urban and rural and tribal communities. We have had a lot of interest expressed by our colleagues on this committee. There is a vote thats currently open which is why some of them have not arrived yet but we expect you will have questions from other members of the committee we are again very delighted youre welcome and willing to come today and help us learn more about this topic. So with that madam chairman i yield back thank you. Thank you so much senator lammas. Welcome again to our three witnesses who are with us and l introduce each of you and then we will start on the line. Julie is president ceo of midwest minnesota Community Development corporation based in detroit lakes, minnesota which is sort of up in the northwest essential part of the states. She has been in her role since 2018 and has led the department deployment tax credit financing. In addition to leading mm cdc sheet leads at native cdi subsidiary at the white earth investment initiative. Yesterday at usda announced their one of eight native cdf eyes received funding the native relenting demonstration program. Cpa certification holds a masters in management from Northwestern University Kellogg School of business. Rene is president ceo neighborhood develop corporation and st. Paul, minnesota. Nbc focuses on helping Small Businesses get off the ground supporting their growth. It provides entrepreneurs all suite of Services Including lending, trading, Real Estate Services and assistance with Management Consulting and accounting and marketing. Is joined in 2019 with over 18 years of experience leading teens and merchandising product development. Cdfi ceos lots of alphabet there. Ennis earned her bachelor of science degree in Management Accounting from the college of saint scholastic. Crystal cornelius is with us today crystal is president ceo at native National Native cdfi based in colorado. Ms. Cornelius has 23 years of expense work in the native Economic Development field but she is an enrolled member of the United Nation of wisconsin and a member of the Turtle Mountain band and the chippewa indians in north dakota. We will begin, thank you so much. I think you know this i will just reinforce you each will have five minutes for your Opening Statements for there is a clock in front of you to help you keep track of time. Your full written statement must be made part of the record paid part of me for interrupting. To make investments in loans totaling 14. 8 billion. In minnesota, 30 serviced 8,520,051,000,000 of app loans for nonprofits performing 88,000 jobs. Investment offer excellent return on taxpayer investment. Fy22 award ees made loans and 65,000 Affordable Housing units. As individuals become more selfsufficient their reliance on social welfare programs decreases so these decrease costs in the long run. We have a long track record of funding sources, finding multimillion ways to use new tools. As an industry we are collaborating in the a few National Groups to access epa Greenhouse Gas reduction fund. Proposed tax credit and Scaling Community lenders act are also promising options to add essential liquidity. A growing segment of the industry are native cdfis serving reservations, villages and homelands with many facing high rates of poverty, access to capital and other Financial Resources is especially difficult giving rise to predatory lending now more accessible on the internet. In addressing this, we try prevent issues like the Small Business customer, took loans and asked us for refinance. Equating to nearly 50 interest. They did not understand what they signed or have little recourse to change it. A few key issues to unique challenges facing cdfis in communities. One is collateral valuation. A Rural Property is less 20 than urban area. Put the property on trust land and it drops 20, 25 . At tribal business we help finance before covid costs roughly 12 million to build but appraised new at 6. 5 million. A bank could not finance and the tribe, the project used additional land for lateral, access tax credits and special purpose sources. Its now doing well but only because of those not uncommon with native projects. Many banks do not understand and avoid the complex legal status of trust monday. A second challenge in rural work is census data, average out maxed pockets to poverty often making ineligible for funding resources. Minor wording changes to allow for census data at the countergroup level or allow sources that would greatly improve access in those areas. A third challenge relates to tax credits, number one tool for development for Affordable Housing nationwide. The bipartisan Affordable Housing cheddar improvement act would increase the total available, strengthen the program and help help address challenging in rural and tribal areas. I could list improvements that we can facilitate success and i will focus in just a few. Bond improvement act to make these less expensive and more accessible and Housing Support through both lie tech improvements and continued support for america. I greatly appreciate your support. We were excited at the formation of the cdfi caucus and increased efforts youre bring to go this work. Thank you for the opportunity to discuss cdfis with you today. Thank you very much. My name is rene and im the president and ceo of Neighborhood Development center in dc, dc is an entrepreneur focus cfi based in st. Paul, minnesota. Ndc has created model of excellence for serving bipoc, Small Businesses located in lowincome neighborhoods. I am a proud member of the bill from within alliance, group of organizations from 50 communities replicating the model. Also member of the africanamerican alliance with cdfi, cdfos and the opportunity finance network. 4 pillars of wraparound support. Pillars are training, small financing but loan and real estate incubators. Ndc will build incubators and thanks to senator smith and klobuchar for securing 1 milliondollar grant. Cdfis like ndc were trusted local intermediaries and many were left behind in the ppp process we were able to ensure 90 of our ppp loan amounts went to bipoc, 7 times more than a typical year. This is the power of cdfis. In the state of minnesota, we were ground zero to communities across the country responding racial and economic. In contrast, latinx families is 18,000. Black families zero. We can and must do better. This is why dcfs matter. Require unique and innovative approaches to opportunities. In the last 3 years, ndc has created initiatives to address entrepreneurs mental wellness, double down on support for black and latino women, launch credit builder, loans and education are assisting entrepreneurs to buy their own commercial real estate as another pathway to wealth. And we dont stop there. The state of minnesota has tagged ndc and i want to thank senator smith and other senators who signed onto support an appropriation of 341 million to the cdfi fund in fiscal year 24. That appropriation funds entire cdfi programs like the native initiative and new market tax credit not to forget that during the pandemic Rapid Response program and Equitable Recovery Program were a lifeline to organizations like ndc and those we serve. Cdfi fund is a competitive process. I would recommend base funding for all cdfis and competitive grants for additional performance impacts an new innovative models. Accountability is important but so is funding the full cdfi ecosystem and i want to recommend changes proposed by senator smith and rounds for the cdfi bond Program Improvement act. By reducing the bond size from 100 million to 25 million, this bill will allow more cdfis especially small cdfis to access the fixed rate longterm financing the program provides. Cdfi bond for special space and business incubators and lastly, id like to share the story of one of our entrepreneurs. Open consciously beautiful in 2018 in one of our Small Business incubators, she was a graduate of training program, recipient of Technical Assistant and loan client. Business was good. Then 2020 hit, salons were closed and civil unrest happened in our neighborhood and then life took another blow. Her son lost leg in boating accident. This isnt a story of tragedy but rising like a phoenix, marla, she did not quit. While staying with her son in the hospital she shifted her business model. She is designing a curriculum and working with the minnesota of cosmetology to be trained in doing hair in all types. Today marla and her son are thriving and paid off loan and graduated from dc black and latino programming. Not only is marla a mom and Business Owner, shes a leader in our community. Thank you so much for allowing me this opportunity to testify. Thank you very much. I am crystal cornelius, president and ceo of the corporation and neighbor works america affiliated in colorado and i thank you for the opportunity to appear before you how cdfis promote housing and Economic Opportunity. And formal greeting. Form foreign. Hello and great honor, measure of gratitude and strength within women today. I appreciate the opportunity. First in many times that only investor supporting native cdfis and their local target demand are direct financing help facility a direct job creation, Small Business development and Home Ownership opportunities for the upward Financial Mobility of native individuals and families across the United States, alaska and hawaii. Most native communities lack access to safe and affordable Capital Resources that are taken for granted in urban. The situation is more serious when it comes to mainstream Financial Institutions. According to native american lending study conducted by cdfi in 2001 6 communities are more than 100miles from nearest atm or bank. 86 of native communities lack a single Financial Institution within their borders. This report explicit identifies native communities underserved by Financial Institution and need for strategy that is increase the availability of Financial Service resources. The lack of Financial Institutions poses a fundamental problem in accessing basic Financial Services but perhaps more seriously it makes Home Ownership, business financing and personal Consumer Lending products almost impossible to obtain. And now by the native american lending study of investments and native american and native hawaiian economies reveal a 44 billiondollar gap of those in the United States economy. To address this need for strong and stable Financial Institutions main goal to help native the communities create communities capitalize and aid in the growth of cdfis, these organizations are communitybased identities governmented by representatives and boards that meet the need for accessible, affordable and other Financial Products that are oftentie today intensive training and Technical Assistance in addition to Capital Resources. These institutions form a foundation of to develop Home Ownership and privatesector opportunities for their respective tribal communities and lead the emergence of a bustling Home Ownership and privatesector economy for tribal members across the United States. The success of approach and the number of cdfi and tribal nations we work with within our services is paramount. Two certified nations today. 30 emerging that are meant to serve respective tribal communities. When we look specifically at the landscape of tribal communities and i think this was relayed by some of our Committee Members especially in Rural Communities. Tribal communities are lacking major Financial Institutions coming and offering products and Services Within the respective communities and we also typically can be permeated by predatory lenders as the only source of finance. So when we look at the imperative nature of what cdfis have done over the past 25 years, our institutions are the financial pillars of our economies of our tribal communities, they are a light and beacon of hope and what makes our organizations so different is we provide the much needed Development Services that are culturally relevant tied with the capital thats needed not only for Consumer Lending products, building businesses but we are also seeing huge insurgence which i find more excitingment more and more tribal members after 20 years of our organizations operating in these measures are credit ready. They are home buyer ready and they do not want to leave their home to leave their communities to find a better opportunity or to create assets and we know Home Ownership is one of the Building Blocks to creating assets in generational wealth. We began lending in 2002 with an exceptional record. Today direct financing has made an incredible impact within our communities from our inception of lending to our native cdfis, we have created 16,652 jobs, 3,885 Small Businesses and built 217 Affordable Housing unitsment when we look at the viability of capital, our loan clients this year, thats leveraging individuals and people that leverage individual, money as well. 349 million in Small Business lending, 109 million in housing lending and 79 million in Consumer Lending, 45 million in agricultural lending. I thank you so much for taking the lime, listening and really supporting how important native cdfis and cdfis are across the country when we look at what the American Dream is supposed to encompass and communities that are vulnerable and not have the opportunity to enter financial mainstream, 1100cdfis are changing the lives of individuals each and every day. They are creating tax bases, they are creating stability within families. They are creating longterm generational wealth and more so specifically within native communities we are creating Community Wealth and when we see the dollar reverbuate and the strength that that builds, thats what true change looks like, thats what true quality looks like and thats what true equity looks like and when we look at the industry, we look at what cdfis specifically do, they are intrinsically tied to their community. Another individual says, i can do the same thing. If they did it, why cant i . We have created over 16,000 jobs. We have 66 and 30 more emerging. We need your continued support, your continued championship of the cdfi and specifically within native appropriations, we have seen native appropriations pretty much at the same level at 21 million. That was perfect when we had 5, 10, 15 cdfis and now getting to juncture of 60 or over the competitive nature of this program in and of itself we are finding much smaller cdfis are actually not getting funded because the more successful and impactful and we are all impactful but we need to make avenues which we can increase of all communities and obviously im speaking on behalf of native communities but each and every one of the communities deserve this and you are champions. Thank you very much. Thank you all for your testimony. We will have a chance to hear from all of you in questions which we will now begin and our first line of questioning will be coming from senator tester who is joining us remotely, welcome senator tester, you 5 minutes. Thank you chairman smith and Ranking Member lumus and thank you for your thank you folks who have testify thed. Have you ever heard of i have, yes. The answer is yes. Okay. Good. Thats good. I was just in bosnar on friday with a number of businesses and housing is highest growth areas in the country and housing there reflects that, housing prices, rental prices are through the roof. Its created a lot of problems, almost population. Its also created an affordability for people, that combined with higher Interest Rates that are turnover in properties isnt happening because nobody wants to give up their 3 loan and i dont blame them. The question for you is there high growth area, it can be bosman or somewhere else. A highgrowth area like that, can cdfis play a role in housing, rental housing or ownership housing and what is that role . Thank you for that question. Financing for all types of housing including manufactured housing, singlefamily housing, et cetera. Keep going, sorry. Large gap between rental housing and getting into for sale housing, Home Ownership and we are looking for options such as manufactured housing to be able to bridge that gap to be a steppingstone for people to start off and then work their way up towards what they would like to end up in as their home. Okay, so a couple questions that we involve around that which is where im at with these folks that didnt have any huge solutions for them or Game Changers because quite honestly its a big problem. The cost is a problem. How does a Community Get involved . Do they have to have a cdfi in that community to be able to make this work or do you guys work with businesses or banks or how do you it so that i could tell the business, look, this is how you need to start working from this angle. Recently released research indicating that adding housing nearly anywhere along the spectrum will assist in filling the gaps because people who move into that housing will empty out housing somewhere along the line, along the chain and free up houses for others to move into and so that can be filled by cdfis at the Affordable Housing level and also through Market Rate Developers at other housing levels. Okay. From a standpoint of policy makers on the roster today the senators are in the room today, is there more that congress can do or the administration can do to break down barriers to allow cdfis to do their work even better . Yes. Theres a whole list of things. Specifically for housing to to provide more basis funding as suggested would be extremely helpful in planning and knowing where we can go to, lowincome tax housing credits is by far the best tool we have to provide for affordable rental housing and that is very difficult to get to do access in rural areas in particular but the credits are in very short supply and they tend to go to the urban areas more than anywhere else and then the bases in rural and native areas is also lacking. Okay, the last question because i only have 19 seconds left. 341 million was appropriated to cdfis. How much is that leverage . In other words, what is the real value of the 41 million . Its roughly 10 times that on average. Okay. Thank you very much. Thank you, senator tester. Senator lumus for questions. Thanks, madame chairman. First of all, thanks for your enthusiasm of cdfis. Do you have proposal to revise the certification application . Yes, forgive me that i went over. I was so excited. Its infectious. Detrimental to cdfi, native cdfis and how continue to operate in our communities specifically one by prohibiting interest only Mortgage Loans, Mortgage Loans with balloon payments and Mortgage Loans with terms longer than 30 years. Under the proposed cdfi changes, cdfis would have to write mortgages that include no negative amortizations, interest only payments or balloon payments. When we look at a majority of the mortgages that are held within portfolios of native cdfis, the majority of those are balloon payments. So if we lack at how number 1 we are not able to access conventional means outside of section 184 or usda502 programs, the mortgages that were holding work for our communities by implementing this change we are going to see a huge decrease in Home Ownership across native communities. Also, the predominance is financing entity and cdfi time dedicate today Developmental Services as individuals working within the cdfi industry in and of itself part of the cdfi certification is the marriage of Development Services in conjunction with financing activities. If we are to start looking at the cdfi and cdfis throughout the nation as more conventional lenders and not allowing Development Services to be imperative to creating stronger borrowers, we are also going to see minimized individuals that are coming through our doors, Development Services are imperative whether youre native, rural or not to really building the capacity and the Financial Mobility of native communities. Thank you. What can we do to ensure cdfis have better access to forms of capital and im particularly interested in what you might have to say about Federal Home Loan Bank membership. Federal home Bank Membership hasnt been really accessible for all cdfis for a number of reasons but those who do access it are able to get to that financing with pledging of Home Mortgage assets, those who dont do mortgage lending dont have those assets to pledge and even more so, cdfis make a lot of nonconforming Mortgage Loans which are not pledgeable to Federal Home Loan Banks. Such as nonconforming in what ways . Collateral on reservations, Mortgage Loans with the higher loan to value than prescribed. Those homes in certain areas that have value gap from class to construction. Great. Thanks. Thats very helpful. Thank you. Senator lumus, i think as well the bond bill, the cdfi bond that we talked about, the fact that it could go from 100 million which for ndc we would have never looked at that. We couldnt use it but to go to 25 million. Is that the right number. Is 25 million the right number . 25 million works because we can collaborate and even work together. Its more obtainable, its more accessible for us at that level. I think that gives us it gives us like fixed rate longer term because thats what we need with these entrepreneurs that we support that want to do commercial development. Patient capital what we call it. Its key. We are grateful for that. Do you agree that 25 million is the sweet spot . It would be very helpful for some and and, yes, to be able to collaborate i think we could use that a lot more. I would also say that the cost which leads to the higher Interest Rate makes it not as useful for certain types of loans or many types of loans and if there were some funding with the bill proposing 10 million of funding to provide for the loan loss reserve, that would reduce the Interest Rate cost, we would have to access the cdfi bond funds and it would make it help us to make more affordable loans to our customers. Okay, thank you. My time is up but i will have more questions in a minute. Thank you. Thank you, madame chairman. Thank you so much, senator lumus. Senator menendez. Thank you, madame chair. Republicans in the house have spent the last few months debating draconian cuts to domestic programs that hardworking americans rely on including the cdfi fund. In july the House Appropriations committee passed bill that cut funding by 45 million, 15 year in fiscal 2023. Can each of you briefly describe how these large cuts to the cdfi fund would impact the work that you and other cdfi do for disadvantaged communities . Thank you, senator. I would say just as a highlevel to cut 45 million would cut nearly half a billion dollars of of Community Lending. Specifically to each of us it would cut out a lot of our activity that we are able to do within communities and that can be devastating for some of those areas that we serve and some of the people. I completely agree. If you think about what we were able to do with covid, additional funding with those programs that i mentioned with my testimony with the Rapid Response as well as Equitable Recovery Program, the additional funding that we received during that time made it easier for us to serve those that we need to serve. So if anything during these times especially now with Interest Rates and everything else, more funding would be needed. I would echo their communities as well. I think how it can affect generally the cdfi field and weve heard this is the ability to leverage funding so when we look at what we are able to do with cdfi funds, leverage those fund with other longterm patient capital, we are going to be looking at a huge decrease and amount of activity and loan volume in which we will be able to provide to our respective clients. Cdfis are proven effectiveness time and time again which is why earlier this year 45 senators joined my letter requesting robust funding for the cdfi fund and i hope we can continue that bipartisan support. The cdfi Bond Guaranty Program which i help create in the wake of 2007 financial crisis allows cdfis to access longterm lowcost capital to jumpstart Economic Growth in Community Development or at no cost to the taxpayer. The program has supported over 1. 3 billion in affordable financing for community facilities, nonprofits, commercial real estate, other development projects. Can you explain in greater detail how cdfi Bond Guaranty Program helps these types of projects come to life . The cost of those funds to us is rather high to be useful for other than longterm investments such as housing, rental housing, properties, for example. We would greatly appreciate improvement act even a 10 milliondollar investment can make that much more accessible to many more uses in Community Development. I think it can only be more powerful. Finally, can you talk about how cdfis can help alleviate the lack of Affordable Housing supply in lowincome communities . Cdfis are working on many avenues to increase housing, both rental and for sale singlefamily housing and looking at pretty much any option we can come up with. Manufactured housing, renovating, existing homes, providing for unique types of construction, financing unique types such as the prefab walls and things along those lines. So we are working with others to help them help our communities. Thank you. Senator fetterman . Hi, thank you, everybody. I just wanted to open with any of you by the question. Do you believe that there is a homeless issue in rural county across america or pennsylvania . Yes, its hidden, though, in Northern Areas very much so. There are a lot of people who couch surf, if you will, and they dont appear to be homeless because they have a place to live for the night but its very precarious and they could be out on the streets any day. Finals agrees. We more lack at severe overcrowding of housing. We can have 16 individuals in a twobedroom house simply for the fact there is not enough individuals could be homeless and doesnt constitute how we care for our community. A super majority in my state, pennsylvania is rural and i have heard again and again that theres a real housing crisis in rural pennsylvania and ive thought about the problem and just what are the different kind of options, you know, right now as well too. I wanted to you this idea of manufactured housing uniting, ie, mobile homes, mobile homes and that would be affordable kind of option but is it fair to say that theres a stigma attach today it where its kind of like trailers or worst things that im not going to, you know, say out loud. But i think thats a shame, too because its really kind of strange to me too because theres been quite a time where tinny houses were all in the raise and urbanists and others think that thats is amazing. Why not about these kind of things too. We do have the kind of crisis of housing in Rural Counties, you know, do you really, i mean, do you really support that, you know, expanding Financing Options for people that just want manufacturing housing as well too or that never really has a path to pursue because of the stigma and that kind of a thing . People generally dont go looking for manufactured housing. We have been working on educating people, even our staff to understand the difference between mobile homes and post 76 and post 70 for homes that are much more Energy Efficient and well built and to think of them as a steppingstone tool and can be improved with multisections, carports, porches, things like that to look very attractive and not look like a mobile home. I dont know. I think millions of americans live in manufactured housing as well as too and theres nothing wrong with that and i think thats really a very affordable kind of option for people too and provides a roof over their head out and its not easily put in more of an urban area but i think its a shame, safe to say that it is that stigma for people, they are like, i dont want to live in a trailer or any of that kind of a thing. Ive visited, ive seen a lot of mobile homes that are lovely. They are beautiful. I would have no problem living there as well. Putting them into a coop, Resident Community model eases that stigma, increases the Community Spirit and desire to be a part of it when theyve got ownership in the land on which their houses are located and it helps them all become much more of a neighborhood rather than just living in something next to each other. So is it a fair statement that people would be rather have fewer people address with their housing, you know, or having traditional homes built too. It seems like its really kind of a tradeoff on that as well too. I heard for years and years and seen that there is housing across rural pennsylvania, thank you. Our Community Land trust in pennsylvania are doing amazing work to create longterm Affordable Housing options but Community Land trust struggle to find funding that moves quickly enough so they lose on private excuse me, they lose out their private equity and market rate buyers, have you seen these issues . Not just land trust but cdfis and nonprofits that would be buying homes to represent afford by and more so to maintain them and keep the homes at a safe and desirable and quality status so the kids growing up dont have to worry about a hole in their ceiling or leak on their bed and things like that. But to have that liquidity available to jump on those right away, thats something that we have been in discussions with north country, foundation, for example, in minnesota to look to buy full mobile home parks to turn them into resident communities. Right on time. The reforms that senator rounds and senator lumus are proposing because we talked about that quite a bit. I appreciate the feedback on that and as we move legislation forward i would love to be able to speak with all of you about that and make sure that we have it set up have it set up in the right way. Let me ask ask question of native cdfi relending Pilot Program so this is the this is the department of agriculture and we have had a chance to hear about how challenging that is particularly if you dont have any experience if youre an institution that does not have experience making mortgages on Tribal Trust Land it can be very difficult and difficult to resolve. Im wondering maybe both corneli us, i will have a followup. So would you like to go first . Get ready ms. Dawson because i have a question for you next. Being able to mortgage or have mortgages within land has been created barriers for our tribal communities, generations upon generations, the relending Program Number one is innovative and looking to address an issue to really create Home Ownership within our communities and measure that understands the complexities of trust land and allows for future mortgages, so all in all im very excited to see as well theres a coalesce of i would say government interests, for instance, fannie mae, freddie mac, put their heritage one product out, loan products specifically for mortgages within tribal communities. Right, right. Seems as if this pilot is quite successful and thats why we are hoping to expand it and excited to see steps that the usda has taken. Mark, would you like to add to that . Yes, it is very helpful when we are able to use those. Some of the tribes dont have the codes in their regulations that allow for federal guaranties and federal direct loans to be used there. So if some some leeway in terms of flexibility with those regulations that are required to be able to use those on reservations, that could be very helpful and i think there is already some sample codes out there for tribes to use to consider but its their option to implement those rules. Great, thank you. Thank you. I want to dive on some of the work that youve been doing at the Neighborhood Development center around black entrepreneurship and i have to say as you know im very familiar with your work and your colleague, longtime friend and ally of mine and i think that its sometimes difficult for people to understand like what are the barriers and how specifically does an organization like Neighborhood Development center break down those barriers so im, you know, youre wanting to start a Small Business, for example, just explain a little bit about what those barriers are and how you break them down at a place like Global Market or other places that you you are involved in . Absolutely. Thank you, senator smith. We actually at ndc we looked at our data and we noticed specifically for black and latino women, we noticed that they were not, stay start in training programs, they might not finish, they definitely might not get go onto get Technical Assistance and wouldnt get a loan and we got curious about what was happening. Instead of make up stories we did research and talked to them and found out that it was a lack of support, it was a lack of them being able to build community amongst themselves, them being able to get just more training and support so weve started a program called block which is black latina opportunity to connect. We started it and we didnt have funding at first and we had people come along can us and we are now into our second cohort and they get focused dedicated training and resources and if we think about it, its not if you think about marla, shes a graduate of bloc and its not that the entrepreneurs dont want to do or they dont care or any of that stuff, its just giving them access to the opportunity. Right, when you talk about Development Services, thats what youre getting at . Yes. From the standpoint of giving them Technical Assistance. For these entrepreneurs they have a coat and they have a Business Development coat and they can work with each other because its really important for them to be able to build community and so thats thats what we found and by doing that then now they are completing their business. Tech support. They have support and completing Business Plans and going with the loan. Access the capital. And then it just works and now they are together in this and so we have seen Great Success with the first round and now we started a second. I had a chance being on a panel discussing opportunities of building black wealth and two incredible entrepreneurs from the twin cities there and one of the things that she the Woman Entrepreneur talked about specifically was just sort of the challenges of trying to get access to capital and go into a bank and the bank looks at her record and says, you would be, i dont know what was the term that you used. She is really able to build wealth for her family and its its a great example, i think, of what youre talking about. I agree and its that access, right, its that access and ability to obtain the capital and thats why cdfis are so important because the work that we do, its not about, you know, your credit score and its not about how much collateral youre bringing to the table. Its truly about commitment to the community and thats what makes the difference we believe in the entrepreneurs, we believe in their spirit and their drive and so just to know that someone is there and walking along beside you and can get you what you need youre not waiting for them to fail. No. All the way. Thank you. Senator. Thank you so much. Thank you so much, chairman smith. Thank you for your line of questioning. As the president and ceo this was one area that we worked diligently on. Obviously access to capital and making sure that the Building Blocks for success for people what want to start their own business who want to be entrepreneurs are there and so i commend you for your continued work on that. I continued to be strong advocate for our countrys Banking System which gives so many hardworking families access to their American Dream. From the largest banks regional down to the smallest local Community Banks and credit unions, Financial Institutions of all sizes provide missions and services to their individual customers, their members, their communities and cdfis certainly play an important and Critical Role in this the banking ecosystem. Thanks to the strength and efforts of our Banking Industry in alabama, the number of unbanked and underbanked individuals in the state has decreased over the years. That being said, given the makeup of my state, 55 out of 67 of our counties are considered rural and many alabamans still lack access to typical Financial Services. Cdfis provide a host of services and product lines that not only help reach these underserved individualed but also reinvest back, many of the overburden regulations we have seen in the last two years have hindered customers and Small Business ability to access credit have continued to their part and offer affordable products that promote inclusion and asset building and expand access to our capital markets. Thats why congress have funded Grant Programs and enacted tax credits specifically for cdfis. For instance, the united bank at alabama recently received tax credit allocation and a Capital Magnet Fund award from the cdfi fund. We are very proud of this. They will use these federal investments to continue to bring new jobs to alabama, improver rural Healthcare Access and promote more Affordable Housing. In addition to federal investments, we need to ensure that we are promoting policies that also allow these institutions to continue to attract private capital as well. May question is, can you just tell us some of the important things that we need to take into consideration to ensure that cdfis continue to have access to private capital and we will start with you mrs. Cornelius and work our way down. I think one of the things im more excited about the native communities are the proposed cre changes. Okay. When we look historically, theres only been one cra investment within native cdfis or within the realm. Looking to have partnerships from banks typically what we are finding footprint, Rural Organization outside of larger banking institutions, so with that access, thats a whole new stream of capital thats really exciting and i also think as we start working weve been incredibly successful with social investors, social capital and really bringing Corporate Partnerships along i think its going to be intrinsic in how we web together all of our respective programs to really benefit communities to the best of our ability and leverage our opportunities. Scale that up absolutely. I think it would be helpful if we could have base funding for all cdfis, all cdfis are not created equal. Its extremely competitive process and so the ability to know as youre going about doing your Strategic Planning and doing your budget that you have this money and you dont have to do the long lengthy applications and things that you have to go through that if it was in your base it would make it a lot easier for us to do the work that we need to do unincumbart . Okay. Similar to the prior comments in terms of getting to predictable funding from the cdfi fund in addition to base funding something of on onramp of 3 to 5 years for new and emerging cdfis to Access Funding before joining the broader pool would be very helpful. The competitiveness has created a barrier to entry for those organizations who havent already been in it and even in the new markets Tax Credit Program the successful application within 4 or 5 points of the maximum. So some of those a few different ways to make it more predictable funding would be most helpful. Okay. Madame chair, do you mind if i ask one more question . You have the latitude. Which federal programming has been the most successful in providing assistance to cdfis so that they can reinvest in our community and on that same note, if you dont think of that right off the bat, if theres an existing gap or shortfall that we really need to take a look at and and address . Its for everybody if shell let me. One of the gaps that i keep seeing is when we think we talked about the wealth gap and the wealth inequities and one of the pathways for that is for entrepreneurs to own their own commercial real estate. Okay. And there is still such a gap for entrepreneurs to get the financing that they need to do that and we have some programs in minnesota that were trying but that gap, that, you know, 5 or 10 that the entrepreneurs that we support lower entrepreneurs is difficult to achieve. Id also say the ability to get market tax credits. Im really grateful for julia and her team because they have provided our cdfi for funding for us to be able to do real estate loans because we didnt we didnt have the amounts that we needed and so how do we get more more capital to more of these cdfis that are doing the work so that we can get further and deeper in those communities. Okay, thank you. Ms. Omar or corneluis . Either one. Are incredibly important to development of native communities and fortunately the cdfi fund has really looked at the onramping for what that looks like for native cdfis and thats incredibly important and i believe partnerships, when youre talking about federal programs that are beneficial, we work hand in hand quite a bit with usda and a lot of the programs that they have really complement a lot of our services and or lending initiatives which help propel our further developments in these areas. Thank you so much. I would add in addition to the others, again, that predictable capital is most important and neighbor works america for those who are fortunate enough to be members of it provide some Grant Funding every year to members and its spread across capital and operating and it is some of the most flexible and useful capital we have been able to access in recent years and things along those lines, supporting Networks America and increasing appropriation would be helpful as well as similar funding. I appreciate yall being here and madame Ranking Member thank you for your indulgence on that. Thank you. I am going the chairman has gone to vote as i understand it. There are no new democrat attendees. I believe that were about to conclude as well. I have a couple more questions and then im going to ask each of you to conclude by responding to this question. Is there anything you wish you would have been asked and werent and how would you respond but before you respond to that question, i have a couple extra questions. Your testimony talked about the gap between the financing needs of a project and its appraised value. Its the a problem that plagues a lot of Affordable Housing projects. Can you talk about the need to think creatively about financing the types of projects you work on and how cdfi bring expertise . Thats a great question, thank you, senator. That is needed to addresse issue on a broad basis and so weve worked on additional sources to try to fund that. New markets tax credits is being used by a handful of organizations to finance the developers of the home and then the new markets equity is used to reduce the cost by 20 or so of those homes with the affordable Home Developers will. Thank you. In what ways do Small Businesses benefit from cdf i . Thank you, senator. Its vast. They receive training. If you think about nbc, you might know how to do hair beautifully or start a restaurant, but you dont really have a Business Plan or know how to run a business, so we provide you with a Business Plan so you get training. And then its like once you start a business, thats great about as you go along you might need Additional Support and help with accounting. Thats the biggest thing for the entrepreneurs is the financial acumen so you might need help with accounting and marketing. And then obviously as weve already talked about here today, the ability to Access Capital for a person that looks like me is difficult at best. Then you need a space to put your business. So youve got this great idea and need a space. I think that we believe in the power and ingenuity of entrepreneurs and we dont stop at any point it is complete Wraparound Services and we are with them every step of the way and as a Business Owner myself, my husband and i have had a restaurant and other businesses and still have businesses to have someone to walk along beside you and know they will not give up on you no matter what is a beautiful thing. They are unique. Thats why im so pleased so many of you have such positive remarks about them. Okay so now we are down to the last question. What do you wish you would have been asked and what do you want to leave the hearing knowing what weve heard . Looking at what can be asked and im representing native communities throughout the United States, alaska and hawaii. What can we do to support a specifically those marginalized communities, programs that we can enhance availability and partnerships because again working in such rural areas and having the opportunity to engage in larger programs i think would be imperative. And when we look at the cultural differences, hawaii is much different than what we are looking at encompassing 574 federally recognized state recognized tribes. I think we are doing such great work but there is so much more to do. Thank you. My daughter and my husband were both part of the forprofit subsidiaries. They converted those into storybooks beautifully illustrated. Every fourth grader in wyoming received a copy of these books so im very familiar with what they are capable of. Gratitude for the ability to be here with you all today. If i think about the 1500 that i feel sitting around this table with you, i want to express that and also as i think about the build in the Alliance Organization of 16 organizations across the country from anchorage to texas, we are in this together. And it has been really heartwarming for me to understand and to get to know you better and to know that we are not fighting this fight alone and that we have a vehicle where we have concerns that we can have a conversation about it and come together and i want you to know that i am grateful for that. I also think that its important to understand that when people found out i was testifying, all i received was go get it, this is great, tell them our story. Its a collaborative effort and we are all in this together and i am eternally grateful for this opportunity. Thank you. Thank you so much for your testimony today. We are delighted to have you. We want this to be a dialogue so be sure when you look at the legislation that is drafted for you that it and make suggestions to make the language clear and helpful. Thank you, senator. I also appreciate the opportunity to share our thoughts with you both and with of the committee. Weve been quite Flexible Working in so many different spaces. We havent talked a great deal about the Development Services such as homebuyer education financial counseling and free income tax preparation. Of those services are some of the Building Blocks to help people get into their own homes to prepare them financially for all kinds of life work, work and home and that brings us into help them get into Affordable Housing. We talk about a few different solutions. To have that more assessable throughout all areas of the state would be extremely helpful and i guess i will mention a few statistics according to a recent report by the joint center for housing studies, 41 of the rural renters are cost burden and manning they pay more than 30 of their income for housing cost and nearly half of the households pay more than 50 of their income for housing. So, with those kind of costs and a lot of homelessness as i mentioned earlier, we need to figure out ways, and we are working on ways to have some of the tools that are already there improved and strengthened and increased and helpful for us. I want to thank the witnesses and a madam chair, welcome back. I believe that we are out of questions. The floor is yours. Thank you so much. I dont know if the senator explained but we have votes going on so she and i just go back and forth. Id like to close by thanking all of you for your excellent testimony. I see what youve raised painting a very good story about the important in rural and tribal communities and underserved communities for those that are looking to build a Stable Family and build by earning their own homes, so im encouraged by what you said and weve also got some good ideas for work that we can do in a bipartisan way to make sure that the federal government is setting up certification processes and other rules that actually work to make it easier for you to do your work rather than harder to do your work of course all agreeing that we know the importance of accountability in the process. So, thank you very much for being here today and for your testimony. For senators who wish to submit questions for the record, those are due one week from today which will be tuesday, october 204th. For the witnesses, you will have 45 days to respond to any questions for the record. Thank you again. And with this, the hearing is adjourned. 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