SOAR Co-Principal Officer, U.S. Rep. Harold “Hal” Rogers (KY-05) announces nearly $4.6 million in COVID-19 relief funds for four community development financial institutions (CDFIs) located in southern and eastern Kentucky. The U.S. Department of Treasury issued the following awards through the CDFI Rapid Response Program (RRP) in Kentucky’s Fifth Congressional District:
- $743,000 for Frontier Housing, Incorporated in Morehead, Kentucky
- $1,826,265 for Kentucky Highlands Investment Corporation (KHIC) in London, Kentucky
- $200,000 for Redbud Financial Alternatives in Hazard, Kentucky
- $1,826,265 for Southeast Kentucky Economic Development Corporation (SKED) in Somerset, Kentucky
“As we continue to recover from the economic impact of the COVID-19 pandemic, this funding will go a long way to support job creation and business expansion where we need it the most,” said Congressman Rogers. “This funding will fast-track financial services for businesses as they revamp operations, providing more hope in our rural region as we move forward.”
The U.S. Department of Treasury awarded a total of $1.25 billion nationwide.
“In serving places that the financial sector historically hasn’t served well, CDFIs lift our whole economy up. We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment, meaning that this announcement might lead to an additional $10 billion in investment,” said Secretary Janet Yellen.
The CDFI RRP grant funds will be used to support eligible activities such as financial products, financial services, development services, and certain operational activities, and to enable CDFIs to build capital reserves and loan-loss reserves.
“This grant from the CDFI Fund will be instrumental in helping our region’s companies rebound from the effects of the pandemic,” said Brett Traver, Executive Director of the Southeast Kentucky Economic Development Corporation. “SKED will put these funds to work helping businesses not just recover, but grow, increase revenue and add jobs in Southern and Eastern Kentucky.”
The CDFI Fund designed the program to disburse the funds rapidly in light of the nationwide economic impacts of the COVID-19 pandemic.
“KHIC will utilize the funds to expand our lending and technical assistance to Small Businesses in our 22-county service area,” said Jerry Rickett, President and CEO of Kentucky Highlands Investment Corporation. “Survival and expansion of small business is a key to the economic recovery and growth of our southeastern Kentucky economy.”
Redbud Financial Alternatives is a new CDFI that provides affordable consumer loans as an alternative to high cost preditory lenders with credit counseling and financial education to help families achieve housing and financial stability.
“The COVID-19 pandemic impacted Redbud by reducing lending operations by 70% with an increase of deferments and write-offs. These funds are critical as the economy reopens because we are seeing strong demand for trust worthy, low-cost financial products with a 34% increase in lending above pre-pandemic levels,” said Redbud’s CDFI Director Louis Irvin. “The Rapid Response Program is amazing because it was easy to apply for with a quick turnaround, and it will infuse capital into the economy where it is needed. These funds will be a building block to economic recovery aiding low income families and businesses in eastern Kentucky.”
“With these funds, Frontier Housing will help more credit-ready homebuyers in northeastern Kentucky realize their dream of owning their own home,” said Tom Manning-Beavin, President of Frontier Housing, Inc. “Homeownership is transformational; it is critical to the health of our local communities, and it changes the lives of the people who reside in the home.”
The CDFI RRP was authorized by the Consolidated Appropriations Act, 2021.