Community Reinvestment Plan - Economic Development
Economic development addresses wealth disparities by promoting asset building such as home ownership and expanding access to financial resources such as grants and loans for small businesses and entrepreneurs. This program area also invests in workforce development, financial literacy education, and other training and support activities
Strategic Investment Areas
The Community Reinvestment Plan recommends four strategic sets of economic development investments: subsidized lending, financial assistance/payments, outreach and support, and workforce development. The plan prioritizes a focus on existing, successful asset-building and economic development activities of the Department of Commerce and the Employment Security Department.
This strategy encompasses three programs aimed at expanding grants and loans to small businesses and entrepreneurs. A comprehensive, best practices approach integrates financial coaching and small business training and support activities to provide holistic implementation.
Loan Guarantee Fund – $17 million.
This fund is a pool of resources that provides funding and loan loss reserves to lenders across the state, including Community Development Financial Institutions (CDFIs), local municipalities, and non-profit organizations. Loan Guarantee funds are often used to encourage small businesses, startups, individuals and other entities that might be traditionally considered “high-risk” borrowers.
Black, Latino, Indigenous-Led Lending Agency Support – $15 million.
The Black, Latino and Indigenous-Led Lending Agency Support Program aims to support existing and emerging Black, Latino and Indigenous-Led lenders who are or are not currently Community Development Financial Institutions (CDFIs), by providing grants for lending capital as well as capital for operations and salaries. This program recognizes the importance of providing robust investment to CDFIs, as they often operate with limited resources and staff. By enhancing their capacity, these CDFIs can serve a greater number of individuals and communities, access the risk pool, and gain access to additional training opportunities to effectively address wealth gaps.
Homeownership Capital Accelerator – $15 million.
The Homeownership Capital Accelerator grant program provides loan capital to lending agencies for increased leverage to help reduce buyers’ monthly mortgage payments and/or increase purchasing power. This may include options like secondary mortgages to eliminate mortgage insurance to facilitate home purchases.
The Community Reinvestment Plan recommends strategies for equitable income growth and wealth-building opportunities for children, adults, and families with low incomes. Among those strategies are establishing Individual Development Account programs for children and adults to encourage savings and investments in their future, like education, purchasing a home, or saving for retirement.
Individual Development Accounts – $25 million.
The Individual Development Accounts (IDA) program is aimed at helping individuals save for specific assets, such as education, housing, or starting or growing a business. The program provides matched savings accounts up to $10,000 to participants. The match will come from savings from earned income. To participate in the program, individuals must participate in financial education and coaching, developing skills and knowledge necessary to effectively manage their finances and achieve their savings goals.
Blended Capital Investments – $25 million.
The Blended Capital Enhancements program can assist beneficiaries in acquiring or securing assets through loans, matched savings, and asset journey acquisition enhancement. This enhancement is the capital that comes after matched savings and loans reach their limit, providing beneficiaries with additional funding to acquire and secure their assets. The program is managed by a central entity or regional entities, and financial technical assistance providers are required to provide a case statement for the amount requested for the asset journey enhancement, describing the asset being acquired or secured, how the enhancement will help secure the asset, the amount saved in the beneficiary’s Individual Development Account, the loan amount, if applicable, and the expected date of use. The maximum amount can be set for each asset journey.
Cannabis Business Grants – $3 million.
The Cannabis Business Grants program is a financial assistance initiative aimed at supporting social equity-qualified license holders to provide early-stage financial support and technical training to cannabis licensees who meet the social equity definition. To be eligible for the grant, an applicant must have majority ownership and control by at least one individual who has either resided in a disproportionately impacted area for five of the last 10 years or has been convicted of a misdemeanor marijuana offense or has a family member who has.
The Economic Security for All (EcSA) initiative is a poverty reduction model that coordinates existing programs to increase their collective ability to support low-income Washingtonian residents in their pursuit of equity, dignity and sustained self-sufficiency. A combination of intensive program navigation, local innovation, and flexible support fills gaps and meets needs within existing programs and regulations. At the local level, EcSA is run by partnerships of community service providers, includes the voices of those who have experienced poverty, and is convened and coordinated by local workforce development boards. EcSA’s innovative approach to equitably reduce poverty focuses on historically marginalized populations and people with multiple obstacles to self-sufficiency.
EcSA Career Accelerator Incentives – $10 million.
The Economic Security for All (EcSA) Career Accelerator Incentives grant program is designed to support individuals as they work towards economic security and stability, with a focus on justice-involved individuals (and their families) impacted by the racial, social and economic disparities caused by the war on drugs. Underemployed job seekers can receive training, support payments, financial coaching, and financial incentives of up to $1,000 as they achieve specific goals such as obtaining an industry-recognized or post-secondary credential, gaining measurable skills, finding employment, or reaching a certain median wage. Local Workforce Development Boards will conduct outreach and help interested EcSA participants engage with other Community Reinvestment programs as they work towards economic security and stability.
EcSA Business Support – $15 million.
The Economic Security for All (EcSA) Business Support program funds Black, Indigenous, and Latino businesses participating in the Workforce Innovations and Opportunity ACT (WIOA) while also providing job seekers with the necessary skills and experience to secure long-term employment.
The Community Reinvestment Plan recognizes the importance of financial literacy, credit counseling, and investment education and coaching, to developing the necessary skills and knowledge to effectively manage finances and achieve savings goals. The Plan focuses on integrating financial coaching and other support and training alongside the other Community Reinvestment programs to provide holistic implementation.
Asset Building Initiatives – $3 million.
The Asset Building Initiatives grant program will provide funding to groups of organizations and individuals that come together to promote practices and advance policies to build assets and achieve financial stability. These coalitions can focus on issues such as increasing access to affordable housing, improving financial education and counseling, and promoting savings and asset building programs like Individual Development Accounts (IDA).
Financial Coaching and Mentorship – $10 million.
The Financial Coaching and Mentorship program provide grants for community organizations and financial institutions to hire employees to provide trauma-informed financial coaching, business coaching, and homebuyer education to households in a culturally responsive manner. The financial coaching and technical assistance will be integrated to include workforce development goals, home ownership, startup/scale-up lending, construction loans, detached accessory dwelling unit loans, and debt remediation. Some of the expected results include obtaining or maintaining employment, obtaining a vocational credential or degree, receiving additional public benefits for income support, improving credit ratings, opening savings and checking accounts, reducing debt, contributing to monthly savings, and saving for retirement or children’s education. As an intermediate goal, families will work towards improving credit, increasing their income to narrow the gap between their current income and self-sufficiency, and initiating the building of savings or assets.
Four Primary Funding Categories
- Community Reinvestment Plan Report (PDF)
- Saporta Report, Homelessness: An income-first approach promotes transition to stable housing.
- California Housing Finance Agency, ADU Grant Program
- Portland KOIN 6 News Article: Portland’s backyard ADU program quietly launches
- Contracting Barrier and Factors Affecting Minority Business Enterprises
- Incorporating Race into the Illinois Community Reinvestment Act
- Blueprint For a Just & Equitable Future. The 10-Year Plan to Dismantle Poverty in Washington
- Improving Homeownership Rates for Blacks, Indigenous, and People of Color in Washington
- Black Home Initiative: Connecting Capital and Community
- Center for Community Investment
- Civic Commons
- Center for Working Families
- WA State Small Business Training & Education Center
- Find Ventures & Dept of Commerce Open Applications for New Equitable Innovations Accelerator
- Building Supportive Ecosystems for Black-Owned US Businesses