Mary Scott Balys
On March 28, President Biden released his fiscal year (FY) 2023 budget request outlining his Administration’s federal spending priorities for FY 2023. The Biden budget recommends $331 million in funding for the CDFI Fund in FY 2023, an increase of $26 million over final FY 2022 spending levels. The budget proposal falls short of the $1 billion in appropriations recommended by OFN and the CDFI industry.
“Economic opportunity is one cornerstone of a free and just nation. It often starts with access to capital through loans, and the CDFI industry needs sustained investments of at least $1 billion annually for the CDFI Fund to help meet this promise,” said Lisa Mensah, OFN president and CEO. “The President’s budget moves us forward, but increased funding is necessary.”
While OFN is disappointed in the level of funding proposed by the President for the CDFI Fund, we are encouraged to see a strong commitment to addressing the affordable housing crisis. The budget also proposes a new CDFI Affordable Housing Supply Fund to increase affordable housing through $5 billion in long-term, mandatory funding. If authorized and funded by Congress, eligible CDFIs would use this funding to finance construction and substantial rehabilitation projects that create new, affordable rental and homeownership units.
The budget also proposes making the New Markets Tax Credit (NMTC) permanent. OFN strongly supports Congressional action on the bipartisan New Markets Tax Credit Extension Act (S. 456 / H.R. 1321), which would make the NMTC permanent and index the allocation to inflation.
While a president’s budget is rarely enacted into law as is, it does signal the Administration’s spending priorities as Congress begins its work on federal funding for the upcoming fiscal year. As the appropriations process begins on Capitol Hill, the CDFI industry must advocate for Congress to provide $1 billion for the CDFI Fund.
Take action by contacting your Members of Congress today!