Technical Assistance


Key COVID-19 Response Strategies for Development Finance Agencies

Toby Rittner, DFCP
President & CEO
Council of Development Finance Agencies
Twitter @tjrittner

Key COVID-19 Response Strategies for Development Finance Agencies

-- Bonds, Tax Increment Finance, Revolving Loan Funds --

Development finance has always been at the forefront of recovering from natural disasters and economic challenges. The emergence of the COVID-19 crisis requires a unique and targeted response by the federal government, state and local development finance agencies (DFAs), private banks, and philanthropy.

As the situation surrounding COVID-19 evolves, small businesses and communities across the country are very quickly facing liquidity challenges, job losses, and project stagnation. Credit is tightening and small businesses are struggling to make payroll while communities have been forced to scale back or halt development. Moreover, communities are facing difficulties financing critical infrastructure such as health facilities, broadband networks, and testing centers to address local COVID-19 demands.

DFAs are uniquely positioned to solve these challenges through pragmatic solutions and adjustments to existing initiatives. CDFA understands that DFAs are under considerable stress and pressure to address these immediate challenges while being mindful of the long-term financial health of their organizations and communities. The following set of strategies and recommendations is designed to help DFAs evaluate their portfolios and determine whether modifications are needed for their bonds, tax increment finance, and revolving loan fund programs.

Bond Portfolios

DFAs operate extensive bond portfolios of both recourse and nonrecourse bond issuances. During this crisis, DFAs will face significant pressure to maintain their bond ratings and ensure timely debt service payments for all outstanding bond issuances. DFAs should consider the following:

Tax Increment Finance Portfolios

Thousands of existing tax increment finance districts are operating throughout the country. The COVID-19 crisis will put stress on existing debt obligations of these districts and may delay the development of new districts. DFAs should consider the following:

Revolving Loan Fund Portfolios

DFAs operate thousands of loan funds throughout the country. CDFA expects these funds to be impacted significantly due to the COVID-19 pandemic, both in the immediate term to address current economic challenges as well as in the long term as business recovery continues. DFAs should consider the following:

Other Considerations

DFAs will face a number of challenges in the coming weeks and months. These challenges are understandable and navigable. DFAs were a big contributor to the nation’s recovery during the recession of 2008-2009. During the coming months, DFAs should remain vigilant and focused on addressing immediate challenges while keeping a watchful eye on the future. Operational budgets and capacity may get stretched and tested but DFAs should continue to use sound financial management approaches. Now is the time for the development finance community to rise to the occasion and support our nation’s bright future and full recovery.


The CDFA COVID-19 Resource Center is the largest collection of financing responses to the COVID-19 crisis. It includes an interactive map that highlights every published financing program to aid with disaster recovery and relief in each state. In addition, federal programs and tools are outlined along with daily headlines and policy recommendations. To help DFAs stay informed, CDFA has created the following resources:

CDFA COVID-19 Resource Center
CDFA COVID-19 Recovery & Relief Update Newsletter
CDFA Weekly Development Finance COVID-19 Briefings

CDFA would like to thank Katie Kramer, Vice President, CDFA, and Michael P. Pehur, Development Finance Consulting Director, Duane Morris Government Strategies for contributing to this piece.

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