The Treasury Department has approved $325 million in community development bonds to invest in low-income communities across the country.

The Community Development Financial Institutions Fund (CDFI Fund) selected three teams to issue the bonds and, upon the final closing of the guarantees, to make bond loans to eligible CDFIs for investment in needy communities.

This is the inaugural round of the CDFI Bond Guarantee Program. The bonds, when issued, will be guaranteed by Treasury and purchased by the Federal Financing Bank. Under the approved term sheets, the bonds have maturities up to 29.5 years. The program responds to the scarcity of 15-to-30-year financing for projects that create jobs and eliminate blight in areas with significant poverty.

The three organizations chosen to issue the bonds as the qualified issuers are The Community Reinvestment Fund, Opportunity Finance Network, and TriSail Funding Corp.

TriSail Funding is a subsidiary of Bank of America. It will serve as the issuer for two CDFIs: Enterprise Community Loan Fund and Local Initiatives Support Corp. LISC and Enterprise will each use $50 million in proceeds to support affordable housing and other commercial development projects.

Enterprise will use the proceeds for several new products including permanent mortgages of less than $2 million for multifamily rental properties. LISC will finance affordable housing, charter schools, community health centers, and other economic development projects.

The Community Reinvestment Fund is a certified CDFI based in Minneapolis. It will serve as the qualified issuer for The Community Development Trust (CDT), a certified CDFI that provides financing for the preservation of multifamily affordable housing properties throughout the country.

CDT announced it has received a term sheet for $125 million in bonds that it will use to advance its work in preserving and expanding affordable housing. CDT has more than 5,200 units of affordable housing and also has mortgages on nearly 17,500 units of multifamily rental housing.

Opportunity Finance Network is a certified CDFI based in Philadelphia. It will serve as the qualified issuer for Clearinghouse CDFI, a certified CDFI that offers loan products to non-profits, small businesses, and community service organizations for low-income individuals and communities throughout California and Nevada.

Unlike other CDFI Fund programs, the CDFI Bond Guarantee Program does not offer monetary awards or tax credit allocations. Instead, it is a federal credit program, and bond proceeds are debt instruments that must be repaid. The program was designed to function at no cost to taxpayers. Bond loans can be used to support commercial facilities that promote revitalization and community stability, community facilities, the provision of basic financial services, senior living and health-care facilities for uninsured or under-insured people, businesses that provide jobs for low-income people or are owned by low-income people, and other community or economic development activity in low-income or under-served urban and rural areas.