Volume 68: CDFIs Create Vibrant Communities Where Individuals Prosper
About ImpactPHL Perspectives:
ImpactPHL Perspectives is a multi-part content series that explores the many facets of the impact economy in Greater Philadelphia from the perspectives of its doers, movers, shakers, and agents of change. Each volume is written directly by a leader in this space to discuss best practices and share lessons learned while challenging our assumptions about financial and impact returns. For more thought leadership like this, check out the full catalog of ImpactPHL Perspectives.
Dan Betancourt, President & CEO, Community First Fund
Imagine an inclusive, equitable, and vibrant community where individuals prosper, triumph over poverty, and live free from discrimination. Community First Fund, a Community Development Financial Institution (CDFI), works toward making that vision a reality by breaking down barriers to wealth-building opportunities for individuals, families, and business owners, especially Persons of Color, women, and immigrants.
Affinity Group Lending - Mamie’s Story
Mamie Sardnee, an immigrant from Liberia, was driving around in a van selling produce and baked goods. She lived in a Black neighborhood in Southwest Philadelphia and woke up every day at dawn to supply restaurants and grocery stores with her wares. She dreamed of her own storefront, but she lacked the credit history to secure financing from a bank. Then, she joined Community First Fund’s Affinity Group Lending (AGL) program, an innovative lending program that leverages social capital through a group guarantee model.
Hundreds of small business owners have gone through the AGL program, receiving not only capital but also personalized training and guidance on finance, business planning, and credit improvement. The group lending cycle is typically 12 months. Upon completing the first cycle, the group can participate in follow-up cycles at increased funding levels and training. Participants use these loans to establish credit, renovate a store, infuse their business with working capital, or purchase equipment and inventory. AGL can support early-stage entrepreneurs throughout the growth of their business.
“Mamie officially graduated from AGL when she closed a commercial real estate loan with Community First Fund to buy the building across the street from her current location and expand her business.”
Mamie’s first AGL loan was in 2014; she has received an additional 9 rounds over the past decade, receiving capital to build her inventory, open a storefront, and purchase a walk-in freezer. In 2022, with her improved credit profile and increased financial strength, Mamie officially graduated from AGL when she closed a commercial real estate loan with Community First Fund to buy the building across the street from her current location and expand her business. Her story is an example of how an immigrant with a vision and sweat equity can access wealth-building opportunities with the support of a CDFI. Her store contributes to the vitality of a vibrant neighborhood. Patrons are greeted with the rich smells and vibrant colors of fresh produce and spices as they walk through her doors, and she is supplying healthy food in a food desert. She has also created 8 full-time and 2 part-time jobs.
Supporting Small Businesses – David’s Story
An Indonesian immigrant, David Christian, came to Philadelphia in 2003 and found employment at an auto repair shop. While working as a mechanic, David noticed there was a language barrier for many Indonesians looking to have their cars repaired. Realizing he could address this communication gap in the community, he decided to open his own business to serve his Indonesian neighbors.
However, as an immigrant without a credit history in the United States, he found it very difficult to secure financing. He refers to Community First Fund as “one of God’s miracles for me” because not only did the CDFI help him secure his first business loan, but it also helped him secure his first mortgage so his family could move from an apartment into their first home. Today, Miracle Joy Motors, one of the only Indonesian auto repair shops in Philadelphia, is a thriving business.
By aligning capital with economic justice for low-income communities and low-wealth individuals, CDFIs are revitalizing vibrant communities. In our 30-year history, Community First has made $487 million in loans and investments to individuals living and working in 16 Pennsylvania counties plus Campden, NJ, and Delaware. These loans have benefited mainly low-income people, including 63% of People of Color and 42% of women-owned businesses, and have created 71,000 jobs.
A Place to Call Home – Home Mortgages and Affordable Housing
Blanca Pacheco was a single mother of two teenage boys who had immigrated from Ecuador when her boys were small. After several years of renting apartments, Blanca reached out to Community First Fund with the goal of owning her own home. Blanca was not one to show much emotion, but on the day of her mortgage closing, her eyes filled with tears when her loan officer told her the deal was done and she owned her home. She and her boys grinned from ear to ear as they hugged the loan officer who supported her through the entire process.
“Not only did Community First Fund open the doors to make this opportunity possible for Blanca, but she has become a conduit between Community First Fund and the Philadelphia immigrant community.”
Purchasing her home allowed her to build assets and reduce her monthly housing costs. Not only did Community First Fund open the doors to make this opportunity possible for Blanca, but she has become a conduit between Community First Fund and the Philadelphia immigrant community. Blanca is the Co-Director of the New Sanctuary Movement of Philadelphia, a grassroots organization to advance justice for immigrants. In the years since closing on her home, she has referred many immigrants to Community First Fund for financial and technical assistance, small business financing, or help with obtaining a mortgage to purchase their own home, as she did.
Community First Fund’s Philadelphia Office has a lending team specializing in mortgages for first-time homebuyers and immigrants. We have supported 464 first-time homebuyers in the last three decades.
In addition to home mortgages, Community First provides specialized financial products to support affordable housing development. There is a significant shortage of affordable housing units nationwide, which is felt acutely in Philadelphia. According to the Pew Charitable Trust Research Center, Philadelphia has the highest number of cost-burdened households with low incomes among the nation’s 10 most populous cities. Cost-burdened households spend more than 30% of their income on rent (or mortgage) and utilities. Community First often works with local Community Development Corporations such as HACE and NorrisSquare, and other community partners interested in affordable housing. We partner with them to finance affordable housing projects in Philadelphia’s low-income neighborhoods.
Community First has been a significant partner in the Village Square on Haverford – a development project that will revitalize a long-neglected area in Philadelphia’s central Matua neighborhood. This project will feature a variety of community-focused services and affordable housing units. Nearly 40,000 square feet of retail and office space will include a full-service supermarket, a Federally Qualified Health Center, and a Black-led talk radio station. The residential component will feature 144 apartments, including 113 low-to-moderate housing units.
Projects like this revitalize neighborhoods by establishing mixed-use properties that balance subsidized affordable housing with market-rate income properties. They also align community services with the neighborhoods they serve. This large-scale project creates affordable housing units with access to healthy food and healthcare services. It also supports a Black-led radio station and makes retail and office space available to bring additional services and jobs to the neighborhood.
“Issues such as poverty, economic justice, affordable housing, and neighborhood revitalization are complex and have no simple solution.”
Community First Fund has supported more than 3,000 affordable housing units over the years and works with developers, community development corporations, and housing authorities to identify barriers to affordable housing and develop products that will provide solutions. In addition to working with large developers like Shift Capital, Community First Fund also supports smaller developers, especially those run by women and Persons of Color, to support their participation in affordable housing projects.
Transforming Communities One Transaction at a Time
Poverty, economic justice, affordable housing, and neighborhood revitalization are complex and have no simple solution. However, Community Development Financial Institutions, such as Community First Fund, offer a concrete, tangible investment opportunity with a significant community impact. These investments experience a ripple effect as loans are repaid, and the dollars are reinvested in new projects to advance economic equity and create generational wealth-building opportunities. Investments are at a philanthropic, below-market rate- but the return on investment yields community impact that will continue to compound over generations.
Dan Betancourt has served as President and CEO of Community First Fund since 1999. Under his leadership, Community First Fund has grown into a revered regional Community Development Financial Institution (CDFI), attracting multi-million-dollar investments with nearly $230 million under management. Community First Fund has had a presence in Philadelphia for decades, and in 2020, Community First merged with FINANTA to advance their joint missions to advance financial equity. With more than 30 years of experience in small business and economic development lending, Betancourt’s leadership extends beyond the Community First Fund Family of Companies. He is a Federal Reserve Bank of Philadelphia’s President’s Council member. He serves on the board of directors for the Expanding Black Business Credit Initiative, Greater Philadelphia Hispanic Chamber of Commerce, Impact Services of Philadelphia, and Elizabethtown College. As Chair of the Pennsylvania CDFI Network, Betancourt’s leadership was instrumental in developing the COVID-19 Relief Pennsylvania Statewide Small Business Assistance program.