June 25, 2024 09:00 AM Eastern Daylight Time

ANAHEIM, Calif.--(BUSINESS WIRE)--Change Lending is pleased to announce the appointment of Madison Simm as its Chief Financial Officer (“CFO”). Madison brings a wealth of experience and a proven track record of success in residential mortgage lending, servicing, and capital markets that will support Change Lending’s strategic growth in these areas.

Madison has over 25 years of experience in the financial services sector, having held senior executive roles at banks and mortgage lenders, most recently serving as President of Real Estate at Texas Capital Bank.

“Madison’s expertise in developing nationally recognized financial services businesses and managing sound growth will be invaluable to Change Lending as the company continues to expand and innovate,” said Steven Sugarman, Founder of The Change Company.

May 9, 2024 09:00 AM Eastern Daylight Time

ANAHEIM, Calif.--(BUSINESS WIRE)--Change Lending, LLC (“Change”) proudly announces it has become a member of the Federal Home Loan Bank (FHLB) of San Francisco as of May 6, 2024. This milestone marks a significant step forward in Change Lending's commitment to serving underbanked and underserved borrowers and communities.

The FHLB of San Francisco is a vital financial institution dedicated to providing reliable liquidity, funding, and support to its member institutions. As a member, Change Lending gains access to a diverse range of financial products and services that will bolster its lending capacity and liquidity and allow it to better serve its customers.

March 13, 2024 09:00 AM Eastern Daylight Time

ANAHEIM, Calif.--(BUSINESS WIRE)--Change Lending, LLC (“Change”) announced today that the Federal Home Loan Bank of San Francisco (“FHLB-SF” or the “Bank”) has approved Change’s application for membership in the Bank. This decision was based on the determination that Change satisfied all statutory requirements for membership – including those relating to capital, profitability, and liquidity. Change’s membership will become effective upon Change’s acquisition of capital stock in the FHLB-SF.

Change Lending and its parent company, The Change Company CDFI LLC (“The Change Company”), are each community development financial institutions certified by the United States Department of the Treasury. Change focuses on making home loans to underserved, prime homeowners. Since becoming a CDFI in 2018, Change Lending’s loans have been primarily to Black, Latino, and low-income borrowers, and borrowers who reside in low-income communities.

Steven Sugarman, Founder of The Change Company, stated, “Change Lending is proud to become a member of the FHLB-SF. We welcome a partnership with the FHLB-SF to enhance our strength and reach as America’s CDFI. We are excited to expand our impact and better serve our target market borrowers.”

February 7, 2024. Anaheim, CA. Change Lending, LLC (Change) is proud to announce that the United States Treasury Community Development Financial Institutions Fund (the “Treasury”) renewed Change’s CDFI Certification on February 7, 2024. The renewal followed the completion of Treasury’s review of Change’s CDFI Annual Certification Report.

Change Lending has been a CDFI in good standing with the Treasury since its initial certification in 2018. During Change’s tenure as a CDFI, Change has provided over $25 billion in loans to 75,000+ borrowers.

November 15, 2023. Anaheim, CA. Change Lending, LLC (“Change”) announced today that it has entered into a global settlement agreement with the United States Department of Treasury, Community Development Financial Institutions Fund (“Treasury”) that resolves its claims relating to Change Lending, LLC v. United States Department of the Treasury, Community Development Financial Institutions Fund. The settlement confirms that Change is and remains a certified CDFI in good standing with the Treasury and provides Change a release from future claims relating to the dispute.

Carlos Salas, Chief Executive Officer of Change Lending, stated, “Change is proud to continue our mission of lending to all Americans, including Black, Latino, and low-income homeowners and those who live in low-income communities. We appreciate the commitment of our strategic partners who make our mission possible and demonstrated unwavering support during this uncertain period. We now look forward to expanding our impact and our reach serving underserved borrowers and communities by expanding our innovative product offerings in the coming weeks.”

Change and the Treasury notified Judge James V. Selna of the United States District Court, Central District of California on November 15, 2023 that they have entered into a global settlement agreement.

The Change Company Issues its First AAA Rated Securitization Backed Exclusively by its Proprietary Community Mortgages

Securitization was comprised entirely of mortgage loans originated by Change Lending, a Community Development Financial Institution (CDFI) certified by the United States Department of the Treasury CDFI Fund.

DBRS Morningstar rated the senior A1 class as AAA and the A2 class as AA, while Fitch Rating rated the A3 through B2 along with DBRS. Both rating agencies cited the demonstrated performance history on prior Change Company CDFI issuances being in line with the broader NQM market as rational for their assigned rating.

The loan collateral for the deal included $307 million of loans with a weighted average 8.72% coupon, 740 FICO, 71.1 LTV and 43 months of reserves.

Under President Trump, the United States Department of the Treasury sought to change fundamental rules relating to CDFI’s through the improper introduction of a proposal under the Paperwork Reduction Act. These new rules sought to eliminate the exemption CDFI’s enjoy from the Consumer Financial Protection Bureau’s ability to repay (ATR) rules relating to mortgage loans. This would eliminate the underwriting flexibility CDFIs need to meet the needs of minority and unbanked borrowers.

CDFI Fund Director Jodie Harris’ proposal appeared to have significant support until it faced public comment and scrutiny for the first time this past Winter. On December 5, 2022, America’s largest non-bank CDFI, The Change Company, posted a public comment highlighting the enormous damage the proposal would do to millions of Americans and all CDFIs engaged in consumer lending. In an interview with Barron’s, Steven Sugarman, the Founder of Change, commented “I can’t imagine a scenario where the proposed rule change carries the day. Someone is going to look at this, and they’re going to say, ‘Let’s take a little bit more of a nuanced view here.’”

The Change Company CDFI, LLC (“The Change Company”) and its subsidiary Change Lending, LLC, America’s Community Development Financial Institution (CDFI), and Framework Homeownership (“Framework”) announced today that they have partnered to provide financial literacy education to underbanked homeowners throughout the United States. The partnership is focused on educating consumers about the homeownership process with the shared mission of expanding homeownership by financing underserved borrowers, fairly and responsibly.

Omar Esposito, President and CEO of Framework said: “We are thrilled to partner with The Change Company, America’s largest CDFI, as we work to make smart homeownership the new norm nationwide by leveraging technology to reach a new generation of homebuyers and homeowners. We believe that with a superior curriculum, the latest technology, dedication to our customers, and innovative relationships with lenders like The Change Company, we can help millions more homebuyers purchase their first homes.”

ANAHEIM, Calif.--(BUSINESS WIRE)--The Change Company CDFI LLC and its subsidiary Change Lending, LLC (“Change”) – America’s CDFI – are pleased to announce that Change has closed its sixth securitization of 2022. Investors in the $201 million offering included socially responsible asset managers seeking to finance home loans to credit-worthy Black, Latino, and low-income borrowers and communities.

The Change Company CDFI LLC and its subsidiary Change Lending LLC (“Change”) – America’s CDFI – are pleased to announce that Change has closed the first ever AAA rated securitization of residential home loans originated entirely by a CDFI. Investors in the $283 million Standard & Poor’s and DBRS Morningstar AAA rated offering included socially responsible asset managers and banks seeking to finance home loans to credit-worthy Black, Latino, and low- and moderate-income borrowers and communities.

The Change Company was certified as a CDFI in 2018 with the goal of expanding access to capital for homeownership, founder Steven Sugarman says. Since then, they’ve funded more than $20 billion in loans for more than 50,000 families nationwide.

Next City spoke to Sugarman recently about how securitization could make homeownership more accessible and how other CDFIs can replicate the model for home loans.

Steven Sugarman, Founder of The Change Company, stated, “We are humbled to attract the high-quality institutional capital and liquidity necessary to increase social and racial equity in America. We are encouraged by the strong, diverse consortium of socially responsible investors who participated in our offerings. The Change Company will continue to expand its partnerships to reach more prime, underbanked borrowers in more underserved markets across the United States.”

Perhaps more prevalent than any other trend in the corporate space today, environmental and social has become a mainstay for businesses seeking investor, shareholder and public support. Amid public sector initiatives to achieve the objectives of the Paris Climate Agreement, there has been a sharp growth in investors’ use of environmental, social and governance (ESG) approaches to integrate climate risks and opportunities into investment decisions.

While noteworthy progress has been made across most industries, some challenges and unknowns resulting from the COVID-19 pandemic have made the road to “doing the right thing” more complex.

To explore the impacts leading up to and resulting from the ESG movement and to get a deeper understanding of the investment and corporate perspectives of ESG transparency, we turned to two of the region’s trusted advisors and experts, who graciously weighed in for a discussion and shared insights and forecasts of what to expect from this powerful focus everyone is talking about.

It strikes a balance between altruism and being lucrative

One doesn’t typically associate altruistic work with lucrativeness. Yet California-based The Change Company has struck that balance – incrementally increasing its loan volume year-to-year while serving historically underbanked communities.

Armed with CDFI (Community Development Financial Institution) certification, the lender provides financial services in low-income communities and to individuals lacking access to financing. Barely two years old, the company is now poised to exceed $10 billion worth of loan volume in that segment alone – up from about $8 billion last year and some $7 billion the year before.

The Change Company, a community mortgage lender based in California, has packaged residential home loans made to people of color and low-income borrowers into a first-of-its kind bond and is planning a second round.

The firm sold a $297 million mortgage bond deal last week. The Change Company is a lender known as a community development financial institution, which were created in 1994 to provide loans mainly in neighborhoods and areas that might not otherwise have access to credit. They are eligible to receive grants and low-cost funding from the U.S. Treasury.

The Change Company is the first such institution to sell mortgage bonds backed entirely by loans it made. Among the more than 20 buyers of the bonds were managers of funds that aim to be socially responsible.

The Change Company, America’s Community Development Financial Institution (CDFI), is pleased to announce that it has closed the first ever securitization of residential home loans originated entirely by a CDFI. Investors in the $297 million offering included socially responsible asset managers and banks seeking to finance home loans to credit-worthy Black, Latino, and low- and moderate-income borrowers and communities.

Jesse Elhai, Managing Director of Capital Markets for Change, said, “We are proud to be the first CDFI to securitize its own residential loans. This inaugural securitization validates the importance of the exemptions provided to CDFIs by the CFPB to fairly and responsibly meet the needs of minority and low-income borrowers under Regulation Z. We thank our new financial partners for helping us demonstrate that CDFIs are essential to ending structural economic inequalities in homeownership. Change will continue to expand its partnerships with financial institutions seeking socially responsibly investments that level the financial playing field for Black, Latino and low-income Americans across the United States.”

Steven Sugarman, Founder of The Change Company, said, “As we celebrate Black History Month, we are reminded that homeownership is the key to closing the racial wealth gap and achieving generational wealth. We thank our new financial partners who, through their investment in this securitization, are demonstrating their commitment to fair and equitable homeownership in America.”

After the collapse of its deal with the quarterback-turned-civil-rights-activist Colin Kaepernick, The Change Company, led by Steven Sugarman, says it’s in talks with other investors to fulfill its vision of serving minority and low-income borrowers.

The neobank is going ahead with plans to expand its mortgage and small-business lending and new digital loan marketplace, according to Sugarman.

Last year, the Irvine, California, company was on track to be acquired by a special-purpose acquisition company sponsored by Kaepernick’s Mission Advancement Corp. According to The Wall Street Journal, the deal fell apart when Kaepernick refused to talk about it in media interviews.

To take a closer look at the CDFI landscape and what is needed to get capital into underbanked communities, we have turned to some of the region’s leading experts – in community finance, diversity, equity and inclusion (DEI), and public policy. These leaders answered our questions and shared their insights on the state of CDFIs in 2021 and moving forward.

Q: Is the government doing enough to help CDFIs serve the underbanked?

Sadly, the government can be doing so much more to help non-bank CDFIs.

Expanding financial services in minority and underbanked communities requires the inclusion of non-bank CDFIs in government programs. Unfortunately, the government still excludes non-bank CDFIs from many of the most important programs. The vast majority (over 90%) of non-bank community development financial institutions continue to be ineligible to partner with the Federal Reserve, are excluded from the most impactful treasury programs, and are forced into second-class membership at the government-sponsored enterprises who are supposed to provide them and their communities access to capital. It is time for the federal government to truly partner with non-bank CDFIs who serve the underbanked and communities ignored by traditional banks. This would involve the full deployment of budgeted and funded programs, like the CDFI Bond Guarantee Fund, and equal membership rights to bank members at the federal home loan banks. As a case in point, non-bank CDFIs were not approved as PPP lenders for months and the underbanked borrowers they serve were forced to wait for relief during COVID.

Today, the Small Business Administration still refuses to issue non-bank SBA preferred lender licenses to non-bank CDFIs, instead keeping in place a “moratorium” on such licensing opportunities. The racial wealth gap is larger today than it was when The Fair Housing Act of 1968 was signed into law more than a half century ago. We hope that the government will revisit its current approach to non-bank community development lenders and include them as a core part of the solution.

The Change Company, America’s Community Development Financial Institution (CDFI), announced today that it has been named to the prestigious FORTUNE 2021 “Change the World” list. The annual list recognizes leading businesses that exemplify the power of capitalism to improve the human condition by addressing important social or environment impacts through their core profit-making strategy and operations.

“It is an honor to be recognized by FORTUNE for its 2021 ‘Change the World’ list,” said The Change Company Founder Steven Sugarman. “When we founded The Change Company, we set out with a singular mission to bank the unbanked, fairly and responsibly. Our core business offerings bring fairness, responsibility, opportunity, and equal access to the American dream of homeownership. FORTUNE’s recognition of The Change Company shows that our approach to financial services is not just good for our customers but also good business. We thank FORTUNE for this honor. We are humbled by it.”

Owning a home has always been the cornerstone of the American dream, providing stability and a gateway to financial security and wealth. But for many, especially those in underserved communities, the dream is out of reach due to wealth inequality and a lack of access to capital. The Change Company, a community development financial institution (CDFI) that promotes capital and local economic growth in Black, Latinx, and low-income communities, is working to fix that.

“Our mission is to bank the unbanked, fairly and responsibly,” says Steven Sugarman, founder of the Change Company. “We do this by providing digital-first solutions to the resolution of social and racial inequities in lending and banking. Homeownership is key to breaking the intergenerational poverty resulting from a legacy of unequal access to lending and other structural racial inequities caused by the financial services industry.”

The Change Company, headquartered in Irvine, Calif., operates five divisions that encompass everything from mortgage lending to appraisal management services—all geared toward empowering underserved homeowners, small businesses, and consumers.