Continuing his efforts to reduce the federal government, President Donald Trump ordered the elimination of all nonstatutory functions of the Community Development Financial Institutions (CDFI) Fund and the U.S. Interagency Council on Homelessness (USICH).
Part of the Treasury Department, the CDFI Fund seeks to expand economic opportunities for underserved people and communities.
Supporters say the move jeopardizes important investments in small businesses, affordable housing, and local communities.
The March 14 executive order comes as housing leaders are already bracing for mass layoffs and cuts at the Department of Housing and Urban Development.
Among other roles, the CDFI Fund administers the Capital Magnet Fund, which awards grants to CDFIs and nonprofits to finance affordable housing. Over the years, it has helped create more than 63,000 affordable homes, including more than 55,600 rental units and 7,400 owner-occupied units. Officials note that it has generated $20 of additional investment for every $1 of award funding.
The CDFI Fund also oversees the New Markets Tax Credit (NMTC), a program that spurs community development to revitalize distressed communities. Created by Congress in 2000, the tax credit has helped construct or rebuild more than 268.2 million square feet of commercial real estate.
The same day that Trump issued his order, the CDFI Fund reported that it received 216 applications from across the country for the latest round of NMTC awards. These applicants requested an aggregate total of $19.2 billion in NMTC allocation authority, almost double the $10 billion in authority available for the 2024-2025 round.
Affordable housing leaders and others are speaking out against the move to eliminate the CDFI Fund.
“We can’t have America First without putting our communities first,” added Harold Pettigrew, president and CEO of the Opportunity Finance Network, a leading network and intermediary focused on community development investment. “For decades, CDFIs have been a driving force in bringing capital to communities that traditional financial institutions have left behind. We are fighting to ensure that federal support continues for the vital work that community development financial institutions deliver to Main Street.”
On March 16, Sens. Mark Warner (D-Va.) and Mike Crapo (R-Idaho), co-chairs of the Senate Community Development Finance Caucus, issued a statement on the important role of the CDFI Fund. “… We are proud to reaffirm our bipartisan commitment to support the CDFI Fund’s mission,” said the statement.
In addition, the National Association of Affordable Housing Lenders emphasized that much of the CDFI Fund’s operations are statutory, having been authorized by a number of laws, including the Riegle Act, the Community Renewal Tax Relief Act, and the Housing and Economic Recovery Act.
Trump also listed USICH on his latest list of entities to be cut. It is the only agency at the federal level with the sole responsibility of ending homelessness. It works across 19 federal agencies and departments, and with partners in both the public and private sectors, to coordinate a federal response to homelessness.
“As if decimating the U.S. Department of Housing and Urban Development and gutting our nation’s fair housing rules weren’t enough, late Friday night when the Trump administration thought everyone was asleep, they moved quietly to dismantle the U.S. Interagency Council on Homelessness by bureaucratic fiat,” said Rep. Maxine Waters (D-Calif.). “This is consistent with his attacks on the social safety net, including Social Security, Medicaid, and now programs to end homelessness. Trump’s attempt to dismantle a nonpartisan independent agency that does indispensable work to combat homelessness within the United States shows that cruelty is truly his goal.
“It’s also clear that Trump has absolutely no idea what USICH does or the purpose the agency serves. USICH’s role is to reduce bureaucracy to make federal efforts to end homelessness more coordinated, streamlined, and effective. USICH also helps local communities end homelessness by providing technical assistance, which is especially critical in rural areas where homelessness is worsening rapidly.”
Waters, the top Democrat on the House Financial Services Committee, added that Trump’s actions come “when a record 771,480 people are already experiencing homelessness in the United States and countless families are just one missed paycheck away from facing the same fate.”
