CDFI Research Update

Sizes across four measures—total assets, capital available for lending, loans outstanding, and loans closed—for each sector show substantial differences. Looking at the baseline sizes for each sector helps to set the stage for comparisons between fundamentally different member loan funds. We compare across the three sectors in the sample for any year in the five-year period.

Housing remained the largest sector in the sample, with total assets in 2024 exceeding $15 billion and loans outstanding totaling nearly $8 billion. Community and commercial lenders were the next largest, with close to $6 billion in assets and more than $4 billion in loans outstanding.^v Business lenders remained the smallest category, with more than $4 billion in total assets and around $2.5 billion in loans outstanding.

These size rankings remained the same when looking across the balance sheet measures of total assets, capital available for lending, and loans outstanding. However, business lenders engaged in more lending activity (i.e., loans closed) than community and commercial lenders. This is because business lenders provide smaller loan products with shorter terms allowing them to recycle capital at higher rates.

To understand how these aggregate sizes evolved, we investigated the time trends of the same four measures—total assets, capital available for lending, loans outstanding, and loans closed. We show both the changes in total amount over the five years (“Over Time”), as well as the percentage change in the total amount in each year (“Year-Over-Year Change”).

In 2024, overall size increased for all three sectors. From 2023 to 2024, total assets increased from $3.8 billion to $4.3 billion for business lenders, from $5.0 billion to $5.7 billion for community and commercial lenders, and from $11.3 billion to $15.0 billion for housing lenders (or from $9.5 billion to $11.0 billion if we only include capital available for lending).^vi Continuing to grow beyond levels in the turbulent early 2020s, member loan funds in each sector maintained year-over-year balance sheet growth of around 10 to 15 percent (excluding unavailable assets). Lending activity—total loans closed—was less consistent. Nonetheless, two of the three sectors (business and housing) saw overall growth in annual lending activity, while community and commercial lender activity stayed roughly the same from 2023 to 2024.^vii

Overall, there was meaningful five-year growth in all three sectors across balance sheet measures of assets, capital available for lending, and loans outstanding. From 2020 to 2024, total assets increased by 64.0 percent for housing lenders, 47.7 percent for business lenders, and 38.9 percent for community and commercial lenders. These numbers are similar for capital available for lending, except for housing lenders, whose capital instead grew by 45.0 percent in this period. Lending portfolio sizes (loans outstanding) saw similar patterns of growth to capital available for lending.

CDFIs tailor the features of their loan products to meet borrower needs while also maintaining organizational and portfolio health. Therefore, different sectors of CDFI lending are associated with different interest rates and terms. We analyzed how each sector’s rates and terms changed over the five-year period, both at the average and median level.

In 2024, interest rates and terms were stable, although for the most part slightly higher than in 2023. For business lenders, which are often the most susceptible to significant changes in the lending environment, rates were nearly flat after a sharp rise in 2023. For this sector, the average rate rose from 6.72 to 6.75 percent (the median fell slightly from 6.50 to 6.40 percent). Community and commercial lenders’ rates rose, from 5.63 to 5.86 percent (their median interest rate rose more, from 5.66 to 5.97 percent). Average rates for housing lenders rose slightly, from 5.05 to 5.15 percent, although median rates fell from 5.24 to 5.11 percent. This average–median divergence for housing lenders comes from differences within the sector—housing lenders to individuals comprise a smaller group in the sample but meaningfully increased borrowing costs, while housing lenders to organizations make up the majority of the group and slightly lowered borrowing costs. Due to sample shifts, the trends before 2024 were slightly different from those of 2025 brief but follow qualitatively similar patterns.

Terms on outstanding loans were stable, increasing by less than a quarter of a year for both business and housing lenders while falling by seven months for community and commercial lenders. In 2024, the average term on outstanding loans was slightly more than seven years (86 months) for business lenders, slightly less than seven years (83 months) for community and commercial lenders, and more than 11 years (137 months) for housing lenders. This is in line with expectations, since CDFIs continue to make long-term investments in borrowers.

The stability in both rates and terms of lending reflects the multiyear nature of CDFI products, capturing conditions of capital deployed in prior years. These longer-term investments are a core part of the CDFI business model. Member loan funds that increased rates did so in line with national interest rate trends. Member loan fund rates were not substantially higher than prepandemic levels, indicating that member loan funds insulated borrowers from macroeconomic conditions. Although this served borrowers well, this lower financing revenue may indicate a pressure point for member loan funds as borrowing costs remained high.

CDFIs in different sectors have distinct business models, leading to unique operational opportunities and challenges. We investigated how operational performance, measured through the deployment, self-sufficiency, and net income ratios, evolved over the five-year period using both average and median rates.

For business lenders, deployment continued to rise. After the early 2020s, when business lenders raised substantial new capital and faced an uncertain lending environment, business lenders managed to steadily increase deployment rates to 66 percent in 2024. Business lenders increased the deployed share of their available capital while still growing their overall balance sheets, leading to both higher deployment levels and higher deployment rates.

On the self-sufficiency side, business lenders stabilized since post-pandemic declines, with an average rise from 47 to 49 percent self-sufficiency in 2024. Business lenders saw large declines in self-sufficiency in previous years as pandemic-era program participations wound down. In 2024, business lenders reversed this trend as they developed more sustainable post-pandemic business models. Net income ratios showed similar trends to self-sufficiency ratios, although philanthropic and government support meant that business lenders’ 2021 peak in net income ratios was very high, nearly surpassing the average net income ratio of the other two sectors. From 2023 to 2024, business lenders’ average net income ratio rose from 14 to 18 percent.

Community and commercial lenders’ and housing lenders’ operational trends followed similar patterns to one another. Lending in these sectors does not typically require as high touch technical assistance, flexible portfolio management, and high loss reserves as business lending, while real estate incentives like the New Markets Tax Credit (NMTC) provide substantial earned revenue. This business model provides these sectors with more lending capacity and self-sufficient revenue streams.

In the five-year period, both the community and commercial and the housing deployment trends moved similarly but at a higher level compared to business lenders. Lower deployment rates in 2021 and 2022, due to pandemic-era capital constraints and uncertainty, have since risen. In 2024, deployment was steady at high levels for both sectors, averaging 76 percent for housing lenders and 74 percent for community and commercial lenders.

Self-sufficiency and net income ratios remained high for housing lenders in 2024, averaging 79 percent and 28 percent, respectively. Stability was an enduring feature of this sector, partly due to the consistently high demand for housing and revenue through programs like NMTC and project-based affordable housing incentives like the Low-Income Housing Tax Credit.

For community and commercial lenders, self-sufficiency fell more substantially from 2022 to 2023 as grant-based revenue sources withdrew in the post-pandemic period, but this sector saw more stability in 2024, at an average self-sufficiency of 70 percent. Compared to self-sufficiency, net income fell by less for community and commercial lenders post-pandemic and rose even more to a period peak of 29 percent in 2024. This suggests that this sector grew both contributed and earned revenue streams in 2024.

CDFIs are directly connected to borrower financial trends through their portfolio health. We measured portfolio health using the average and median of three measures of incomplete loan repayment—the 30-day delinquency, 90-day delinquency, and net charge-off rates—by sector over the five-year period.

Delinquencies in 2024 were elevated in all sectors compared to 2023, with 30-day delinquency rates of 6.13 percent, 4.27 percent, and 2.84 percent for business, housing, and community and commercial lenders, respectively. This increase matched national increases in non-CDFI loan delinquencies across many borrower categories, especially commercial real estate, consumer credit, and small business.^viii Depending on the sector, these national trends were linked to rising costs, elevated interest rates, economic uncertainty, and continued changes in real estate demand. Delinquencies and charge-offs remained highest for business lenders, although housing lenders saw meaningful rises in delinquencies after a period of stability.

Charge-offs across sectors, meanwhile, did not increase dramatically from 2023 to 2024. They averaged 2.04 percent for business lenders, 0.52 percent for community and commercial lenders, and 0.17 percent for housing lenders. This shows that while CDFI portfolios were under pressure from delinquencies, especially in business lending, their unique assistance, forbearance, and portfolio management strategies prevented dramatic losses.

Lending outcomes vary both between and within sectors, meaning there is no single measure that can capture the full scope of member loan fund outcomes. We therefore include multiple sector-specific outcomes measures. These represent our best attempt at capturing outcomes for the members, but outcomes are nuanced and member specific.^ix For example, job creation in community facility construction is different from job creation at microenterprises; housing development and rehabilitation can range from multifamily construction to single-family energy upgrades; and community facilities include schools, small childcare providers, cultural centers, and hospitals. The analysis here provides a high-level trend in broad outcomes, but each member loan fund has unique community impacts.

This high-level view reveals some trends. Business lenders created jobs efficiently when partnering with large government programs in 2020 and 2021, while their ownership financing followed growth in loans closed. In the early 2020s, community and commercial lenders were able to create jobs and take on technical assistance (TA) clients (partly through entering business lending with Paycheck Protection Program participation). However, this sector’s core outcomes in construction and real estate were not immune to economic challenges in the period. Consistent with their other trends, housing lenders saw steadier outputs throughout the period, although the 2020-2022 period also showed somewhat more pressure.