Community lenders and developers are scrambling to determine the ramifications of a late Friday executive order from the Trump administration targeting a relatively small pot of federal money that has a substantial impact on Detroit commercial real estate development. 

The programs under federal scrutiny are CDFIs — shorthand for community development financial institutions — which help fund organizations focused on backing critical developments in low-income and under-served areas, often filling in financing gaps in needed housing and other building projects. 

Clifford Brown, who runs Detroit-based development company Woodborn Partners LLC, said all of the projects he has worked on — The Coe in West Village, The Brooke in southwest Detroit, The Scott at Brush Park and others — have all had some level of CDFI support. He said he is concerned about any federal policies that could hurt CDFIs.
“None of my developments would have been done without CDFIs,” Brown said.

An executive order released around 8 p.m. March 14 requires the federal Community Development Financial Institution Fund, or CDFI Fund, to “eliminate” its “non-statutory components and functions” … “to the maximum extent consistent with applicable law.” The order also says the CDFI Fund and six other organizations are required to “reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.”
The order came hours after Congress authorized a fresh $324 million infusion for the fund, catching CDFI industry officials by surprise. 

The March 14 order gives the head of the CDFI Fund, as well as six other targeted government agencies, until this Friday to submit a report to the Office of Management and Budget "confirming full compliance with this order and explaining which components or functions of the governmental entity, if any, are statutorily required and to what extent." 

U.S. Treasury Secretary Scott Bessent is trying to preserve the CDFI Fund while also adhering to the order, according to people familiar with the matter who aren’t authorized to speak to the media. Republican lawmakers have expressed apprehension over the Trump administration plan, Politico reported, as the program has had longtime bipartisan support and often serves as a "lifeline."

​

At stake is more than $300 billion in mortgages and loans for small businesses and commercial real estate projects in low-income communities across the country, largely across Republican-controlled states like Mississippi and Louisiana.

In general, the CDFI Fund provides small grants and other forms of funding to CDFIs around they country. They, in turn, leverage that for additional funding from elsewhere. It also administers the New Markets Tax Credits program, which according to the Michigan CDFI Coalition, resulted in $1.78 billion in investments in the state between fiscal 2005-2022.

Michigan's 46 CDFIs have deployed some $5.6 billion in across 59,000-plus unique loans in that 17-year span, according to the coalition and federal government data. Their efforts have resulted in 41,000-plus permanent jobs, 27 million square feet of real estate development and 16,000 housing units created, with 72% of those deemed affordable. They also supported 25,000 small or microbusinesses, according to the coalition.

Among the major ones locally: Invest Detroit; Lansing-based Cinnaire Solutions; the Detroit offices of the Local Initiatives Support Corp., often known by just its acronym LISC; IFF and Capital Impact Partners — just to name a few.

​

​

​

​

​​

​

​

​

​

​

​

​

​

​

Credit: Amy Barczy/Crain's Detroit Business
The Parker Durand apartment and retail building in Detroit's West Village neighborhood at Kerchevel and Van Dyke on Wednesday, March 19, 2025.

 

SMALL PROGRAM, HUGE IMPACT
CDFIs were created in the mid-1990s during the Clinton administration via the Riegle Community Development and Regulatory Improvement Act of 1994. They also fund things like business development and provide technical and financial assistance in communities around the country — not just in major cities like Detroit. They fund projects and other things in red and blue congressional districts, rural and urban areas, and impact people across the country.

But in Detroit, they can have outsized impact. 
Invest Detroit, for example, has provided funding for major housing projects like the redevelopment of the Fisher Body No. 21 plant in the Milwaukee Junction neighborhood, the new Parker Durand apartment and retail building in West Village, among many others. Invest Detroit has also been heavily involved in Detroit's Strategic Neighborhood Fund. LISC manages the Detroit Housing for the Future Fund. 

“Dismantling the CDFI Fund would cut off critical funding to our communities throughout Michigan, including millions of dollars in private sector investment made possible because of the CDFI Fund and CDFIs,” said Jennifer Hayes, chair of the Detroit CDFI Coalition and senior vice president of public policy at Invest Detroit. “When you look around the city of Detroit, you see CDFI impact in neighborhoods throughout the city.”

​

​

​The precise impact of the administration's order is not fully known, although it has sent a chill through the CDFI community locally. 

Some in the CDFI ecosystem fear that while the fund itself may end up largely untouched, at least for now, there could be negative consequences, perhaps including fund staff cuts that could slow down things like administrative functions. 

The move, according to one academic who has studied CDFIs, runs parallel with other Trump administration policies.

​

 

“For CDFIs that serve Spanish speaking communities, immigrant communities, Black communities, poor communities — to focus on a fund that is so small in the scale of the federal budget, yet so important for the communities they serve, I would say that lines up pretty well with the other patterns that we’re seeing about the administration, targeting marginalized and impacted communities,” said Terri Friedline, a professor in the University of Michigan School of Social Work.

​

​In addition to the $324 million CDFI Fund, the order also targets the Federal Mediation and Conciliation Service; the U.S. Agency for Global Media; the Woodrow Wilson International Center for Scholars at the Smithsonian; the Institute of Museum and Library Services; The U.S. Interagency Council on Homelessness; and the Minority Business Development Agency.

Statewide, organizations representing CDFIs are also expressing concern.
“For more than 30 years, CDFIs have been providing affordable and flexible financing to communities throughout Michigan,” said Elissa Sangalli, chair of the Michigan CDFI Coalition and president of Northern Initiatives, which is based in Marquette. “Our members’ investments touch every county in the state, supporting residents buying their first home, fulfilling dreams of starting a small business, and supporting housing and neighborhood projects in local communities. We can’t have America First without putting our communities first.”
There are more than 1,430 CDFIs across the country, according to Opportunity Finance Network, a national trade association for CDFIs.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​Credit: One Detroit Credit Union | Portia Powell is CEO at One Detroit Credit Union.

​​

​

LENDERS RAISE RED FLAGS
Credit unions and, in some cases, banks can qualify as CDFIs — and there are concerns locally.
For example, One Detroit Credit Union is already preparing for the impact that the executive order may have on the institution. Portia Powell, CEO of One Detroit, said she’s been meeting with legislators and partners to share how significant a CDFI institution is to the community.

“If you look at Detroit in general … a lot of the work that’s been done around small business, housing, workforce development, job creation, all of those things are the direct work of CDFIs,” Powell said.
One Detroit has been a CDFI since 2014, which has allowed the credit union to make higher risk investments and develop programming and products for members that otherwise would not have qualified for assistance.

As of Dec. 31, 2024, One Detroit has made $36.2 million in loans, 98% of which are to members within CDFI markets and underserved communities, like Inkster and Highland Park, where One Detroit is the only financial institution available.
“If we weren't able to leverage grants and funds from the CDFI Fund, we probably wouldn't be able to exist in those communities. We’re talking about an entire community of people who wouldn't have a financial institution,” Powell said.
The loss of that program could mean a detrimental impact for the communities it serves. Powell said One Detroit would be “forced to change its entire model,” because it would no longer have the federal support that allows the credit union to make riskier investments.

One Detroit launched its auto loan refinancing program, Refi my Ride, in 2014 following its CDFI designation. It was designed with CDFI municipalities in mind, offering refinanced rates to members with “less-than-stellar credit” and could be on the chopping block if the credit union loses its federal support.

“Need is only increasing, it's not decreasing. Support (needed) in these communities is only increasing. We're seeing more larger financial institutions close by the day, and what we've been able to do is leverage those CDFI grants and the fund to be able to continue to serve in underserved communities. If this is restricted in any way, that would prohibit our ability to be able to continue to do that,” Powell said.
-- Bloomberg reporters Emily Flitter, Simone Foxman and Amara Omeokwe contributed to this report.

 

​