tion's community development financial institutions (CDFIs) are receiving a greater level of recognition, including a new infusion of federal funding to bolster their mission of serving lower-income communities. Despite the challenging nature of the markets they serve – not to mention their own lower capital levels – many of these institutions are doing their part to keep the dream of homeownership financing alive. {OPENADS=float=left&zone=6} From a federal standpoint, 2010 has been a positive year for the CDFI sector. Donna J. Gambrell, director of the Department of the Treasury's CDFI Fund program, brought good tidings from the Obama administration during a March 3 speech before the CDFI Institute. ‘The president's fiscal-year 2011 budget request included exceptionally strong support for the CDFI Fund, increasing appropriations to $250 million,’ Gambrell said. ‘This included $140 million – a 30 percent increase – in funding for our flagship CDFI financial and technical assistance awards to expand the availability of affordable capital and credit in distressed communities and provide specialized technical assistance and training to CDFIs through an expanded capacity-building initiative.’ The CDFI Fund received $54 million prior to the recession in 2007, but that sum increased to $94 million in 2008 and $107 million in 2009, with an extra $100 million added through the 2009 stimulus package. This stands in contrast to the earlier part of the previous decade, where the fund faced repeated attempts to whittle down its operating capacity. ‘The increases started when Democrats became the majority in Congress following the 2006 elections,’ observes Jeannine Jacokes, chief executive and policy adviser of the Community Development Bankers Association. ‘The Obama administration is also very good in being supportive of the CDFIs.’ Founded in 1994, the CDFI Fund is the largest source of capital for the institutions within this sector. ‘All CDFIs work in low-income communities that lack access to capital, even in good times,’ adds Jacokes. ‘It is frustrating, because many CDFIs don't have amount of capital they need to respond to today's markets. It is tough for CDFIs to raise equity, and the CDFI Fund is the best way for them to expand.’ Indeed, the CDFIs are expanding. The Treasury Department reports that CDFI bank assets averaged $163 million in 2009 – up from $108.8 million in 2003. There are also more CDFIs at work today: 694 in pre-recession 2006 to 834 by the end of 2009. [b][i]No place like home[/i][/b] However, a national survey by the Opportunity Finance Network found that more than half of CDFIs were unable to keep up with loan demand by the end of 2009, with the lack of capital being the primary reason for this dilemma. David Oser, executive vice president, chief investment officer and treasurer with Chicago-based ShoreBank, points out that CDFIs face unique circumstances, especially in regard to mortgage origination in today's environment. ‘CDFIs want to play a role and have encouraged affordable housing in their areas,’ he explains. ‘But CDFIs are not large institutions. They are smaller institutions, and their problems are exacerbated by the tightening of regulations – not only in banking, but from Fannie and Freddie, who have reinvented redlining by defining various cities as distressed areas and, thus, require higher down payments and higher credit scores.’ David Beck, director of policy and media at Self-Help Credit Union in Durham, N.C., notes that the typical CDFI customer is having a rougher time in today's economic climate. ‘The core part of our mission is providing homeownership opportunities for those having difficulty getting mortgages,’ he says. ‘Our borrowers don't have the financial cushion to weather hard times.’ Ensuring that people stay in their homes is another key area of concern for CDFIs. However, Beck states that the sector is highly proactive in ensuring their originated mortgages do not veer into disaster. ‘We and other CDFIs, in general, often have higher rates of delinquencies,’ he says. ‘But our foreclosure rate is comparable to or lower than conventional lenders'. One key point is that we reach out to our borrowers more quickly – we contact them if they have been delinquent for 30 days, rather than 60 or 90 days. It is much harder for borrowers to catch up when they are 60 to 90 days late.’ Moving forward, the CDFI sector is being tapped for a new federal initiative. In her recent speech before the CDFI Institute, Gambrell reported that the CDFI Fund was given the responsibility for implementing the $50 million Bank on USA initiative to reach communities that traditional financial services institutions have not embraced. ‘The Bank on USA initiative will address the financial challenges residents of underserved communities continue to face by expanding access to bank accounts; developing a model of low-cost, simple banking products; and integrating financial access and financial education,’ she said. ‘ Separate from the Bank on USA endeavor, Start Community Bank, a de novo CDFI in New Haven, Conn., is planning ahead in this area. ‘We are imparting financial literacy on a continuous basis, in groups and one-on-one,’ says William Placke, president, who adds that he believes this approach will build customer loyalty. ‘We're hoping people see us as the one-stop shop.’ Jacokes predicts that the sector will continue to see activity in mortgage origination and other financial services needs. ‘CDFIs across the spectrum have all seen an increase in demand, with more people coming to do business,’ she says. ‘Some borrowers, in ordinary times, may have gone to traditional banks. But now, banks are not willing to lend to those borrowers.’ For Oser, CDFIs are doing much more than filling a niche. ‘If CDFIs are not able to remain in their communities, no one else is going to,’ he says. ‘They have been a tremendous stabilizing force in our time.&qu