NEW YORK (8/11/15)--Applications for secondary capital loans, as well as deposits to expand lending and combat predatory loans, are available from the National Federation of Community Development Credit Unions (CDCUs).
The federation provides these resources through its Community Development Investment program, designed to serve underserved communities.
The funding round covers secondary capital loans, Predatory Relief and Intervention Deposits (PRIDEs) and microenterprise deposits.
Secondary capital is a subordinated loan that can be counted towards a credit union’s net worth and can be help CDCUs expand safe and affordable lending to local communities. There are two types:
Secondary Capital I loans can be up to $500,000 with maturities of five to seven years and interest rates of between 5% and 6%; and
Secondary Capital II loans can be up to $1 million with maturities of five to seven years and interest rates of between 3.25% and 3.75%.
Only low-income designated credit unions may hold Secondary Capital loans.
PRIDEs are designed to combat high-cost, predatory lending in local communities. They are available for up to $100,000 for alternatives to auto title lending, assistive technology and tax anticipation lending. Deposit maturities range from two to four years. Interest rates are variable.
Microenterprise deposits partially collateralize microbusiness loans in order to expand CDCU lending. Federation microenterprise deposits typically collateralize 25% of the loan, which shares the risk between the federation and the credit union.
Microenterprise deposits of up to $25,000 for three-year terms are available. Interest rates are variable.
All applications are due to the federation by Aug. 28, and are available online.