The distribution of $250 million in government funds to the community-impact unit of St. Paul-based Sunrise Banks will result in $2.5 billion in increased credit to Twin Cities borrowers, the bank's top executive said Friday.
Sunrise was the only Minnesota financial institution to receive a portion of $8.3 billion in federal funds distributed for community lending this week. The funds were set aside in a pandemic-related stimulus package signed into law in December 2020 by then-President Donald Trump.
Sunrise will make the capital available through its community development subsidiary, called University Financial Corp. It will pay a 2% annual dividend on the investment.
"This is a fantastic asset for us to invest in underserved communities in the Twin Cities area," Sunrise CEO David Reiling said in an interview Friday.
He said the increased credit will flow to minority homebuyers and small-business owners in areas that were hardest hit by the pandemic and resulting downturn.
"For example, we have a successful mortgage program, generally for immigrants without permanent residency, in the Twin Cities, in which we use alternative forms of documentation. We want to expand that program, including to other communities around the state," Reiling said.
He said the firm will also expand its relationship with the Metropolitan Economic Development Association, the largest nonprofit finance provider in Minnesota.
The government funds were part of what's called the Emergency Capital Investment Program, or ECIP, which was part of the $900 billion round of government stimulus in late 2020. On Wednesday, the Treasury Department announced that 162 CDFIs would split up the $8.3 billion from the program.
