California Insurance Commissioner Dave Jones is offering insurance companies $4.67 million in tax credits to invest in underserved communities.
Under the program, investors place a minimum of $50,000 on deposit with a Community Development Financial Institution (CDFI) for 60 months at zero percent interest. In exchange, the investor receives a 20 percent state tax credit, with an approximately 4.5 percent annual percentage rate of return.
In the recent past, CDFIs across the state have made notable investments, including:
• A mortgage loan for a nonprofit residential alcohol treatment facility;
• Micro-loans of $500 to $5,000 to self-employed business owners;
• Loans for six childcare centers to serve 500 low-income children;
• Pre-development loans to Habitat for Humanity to construct affordable homes;
• A loan to a church to build a child care center for lower income residents;
• A loan for 953 water hook-ups in two small, rural communities; and
• A short-term loan to close escrow on housing for low-income foster youth.