FROM KRISTEN SCHEYDER, DIRECTOR OF PROGRAMS, CITI FOUNDATION
OCTOBER 2025

AFN Short Take is a blog series highlighting insights and perspectives from recent AFN programming events.

*Note – examples throughout draw from AFN’s brief and webinar. These organizations are not funded by the Citi Foundation unless otherwise noted.

For generations, homeownership has been the cornerstone of family wealth and community stability. Yet for many low- and middle-income households, access to that cornerstone remains out of reach.

Today, as housing markets continue to tighten, and barriers to accessing stable and affordable housing persist, one group of institutions is helping bridge the gap: community development financial institutions (CDFIs). Grounded in community relationships and equipped with flexible financial tools, CDFIs are helping first-time and first-generation homebuyers access and sustain homeownership.

AFN recently released a new brief, Affordable and Sustainable Homeownership Through CDFIs: Creating Pathways to Building Wealth, and hosted a companion webinar to mark its launch. These cover examples of how CDFIs are driving innovation at the intersection of housing and financial health, and how philanthropy can support and scale that work.

“CDFIs are a conduit for transformational capital. Their work is local, but the implications are structural.Sierra Stoney, co-author of Affordable and Sustainable Homeownership Through CDFIs: Creating Pathways to Building Wealth

Meeting Prospective Homebuyers Where They Are

CDFIs aren’t just financial institutions. They are partners, educators, and bridge-builders. Their success depends on knowing the community’s history and designing strategies that reflect it.

In Mississippi and across the Deep South, Hope Credit Union, a federally chartered credit union and certified CDFI, has been a lifeline for first-time homebuyers who never thought homeownership was within reach. Paula Smith-Lawson, Vice President and Sales Manager, shared that HOPE is a bridge to homeownership in the Deep South, and that most of the people they serve didn’t even realize homeownership was available to them.

Through a broad range of philanthropic and public-sector partnerships, HOPE is able to offer grants ranging from $10,000 to $50,000 to help homebuyers with down payments and closing costs. As Smith-Lawson went on to share, in June 2025 alone 88% of their mortgage loans went to first-time buyers, including many from underserved communities. Nearly three-quarters of those loans included grant assistance.

“Grant funds are vital,” Smith-Lawson emphasized. “They’re how we help single mothers, first-generation buyers, and others build new legacies in communities that have long been excluded.”

In New York, the Habitat NYC Community Fund, a Citi Foundation grantee, works on a different front: preserving and expanding shared equity homeownership through limited equity co-ops and community land trusts (CLTs). These tools do more than create access—they protect affordability and equity-building opportunities for future generations.

“We see ourselves as making the city accessible,” said Christopher Illum, COO of Habitat for Humanity NYC and Westchester County. “We work with low- and moderate-income New Yorkers to make sure they can not only afford to stay in the city, but also thrive.”

Habitat’s CDFI supports residents throughout the entire homeownership journey—from education and mortgage access to estate planning, repairs, and energy efficiency upgrades. It also supports mission-aligned nonprofits and developers working to launch or expand affordable ownership models.

“In markets like New York, CDFIs can bring traditional lenders into spaces they’ve overlooked,” Illum said. “We’re filling gaps and scaling trust.”

Communities Unlimited, a CDFI featured in the brief, refers to this approach as “building a housing ecosystem.” That means not just helping families buy homes, but also ensuring the workforce, supply chain, and development tools are in place to support sustainable affordability now and in the future.

The Role of Philanthropy: Capital, Confidence, and Staying Power

Where CDFIs offer depth, philanthropy can offer a runway.

At Cone Health Foundation, a shift toward impact investing led to a $3.5 million impact deposit in the Latino Community Credit Union beginning in 2018. The result after five years was approximately $7 million in loans for LCCU members, translating to approximately 50 new mortgages in Guilford County, North Carolina, mostly in historically underserved neighborhoods.

“That’s what we mean by return on investment,” said Jamilla Pinder, Director of Community Engagement at Cone Health Foundation. “It’s not just financial. It’s social, generational, and deeply local.”

Pinder emphasized that for funders, engaging with CDFIs means trusting community-based institutions to define their own needs and lead the way. “CDFIs are rooted in trust. A CDFI deposit is a powerful upstream investment in the health and well-being of local families traditionally locked out of economic opportunity.”

From Innovation to Action: How Funders Can Help Scale Impact

CDFIs offer multiple entry points for philanthropy, whether through grantmaking, investment strategies, or ecosystem-building support. Some ways we discussed that funders can help scale impact include:

Funding What Makes Ownership Possible. As Stoney emphasized, “It’s not one-size-fits-all.” Funders can help CDFIs meet people where they are — before, during, and after the mortgage process through grants and capital investments.

  • Subsidize affordability through down payment and closing cost assistance or by underwriting development costs in high-cost markets
  • Seed loan funds or revolving capital pools
  • Sustain wraparound services like financial coaching, buyer education, estate planning, and post-purchase support

Aligning Grantmaking and Investment Strategies. Philanthropy can support CDFIs through both grantmaking and investment strategies, bridging programmatic goals with long-term capital tools.

  • Provide debt capital to fund mortgages and development at affordable rates
  • Make impact investments (PRIs, MRIs) via recoverable grants, credit lines, or loan pools
  • Use endowment capital strategically — many CDFIs now have an S&P credit rating (a measure of their ability to repay investors) and/or raise funds through private placements (a type of SEC-exempt offering to select investors)
  • Place deposits with credit union-based CDFIs to expand their lending reach

Building the Field for the Long Haul. CDFIs need infrastructure, not just capital:

  • Support capacity building to launch new homeownership programs or expand into underserved areas
  • Fund research and peer learning to evaluate impact and share promising practices
  • Convene collective capital by aligning with peer funders and creating layered capital stacks that lower risk and expand reach
Moving Forward, Together

CDFIs aren’t new and in an ever-evolving landscape they are a vital tool to helping low- and middle-income households access greater economic opportunity.

With housing affordability and access under growing strain, the homeownership sector is being called to reinvent itself. CDFIs are well-positioned to play a vital role in accelerating that shift, by bringing deep community insight and the flexibility to design solutions where traditional tools fall short.

The Citi Foundation is a longtime supporter of the CDFI sector, including funding solutions that advance financial inclusion and financial health in low income-communities across the U.S. We’ve seen the role they can play not only in expanding access to homeownership, but also in piloting new models, strengthening nonprofit infrastructure, and delivering impact that endures. Philanthropy can help accelerate this momentum — providing flexible capital, building organizational capacity, and staying the course as communities design what comes next.

Interested in learning more? Explore in-depth research, case studies, and funder strategies in the full brief.