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Federal Reserve Bank of San Francisco
Community Development Investment Review
The struggle to establish a vibrant secondary market for community development loans
David J. Erickson
Abstract

Securitization of loans and their sale to long-term investors has revolutionized many areas of finance: real estate, autos, consumer credit; but despite many efforts, it has not taken hold in community development financing. The obstacles to creating a secondary market for community development loans are similar to obstacles other markets faced: lack of data, standardization of documents and loan process, and loan volume. Other markets have managed to overcome these obstacles. Yet despite recent advances, such as Community Reinvestment Fund’s recent issuing of rated securities in November 2004 and May 2006, the goal of a vibrant secondary market for community development loans seems almost as far away today as it did nearly a decade ago.


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David J. Erickson, "The struggle to establish a vibrant secondary market for community development loans" , Federal Reserve Bank of San Francisco, Community Development Investment Review, issue 1, pages 17-34, 2006.
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Keywords: Asset-backed financing; Community development; Loans
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