Grants typically cover the costs that can’t be supported through loan income—the community engagement work, technical assistance, and relationship building that make CDFI lending possible but don’t generate revenue. New CDFIs need grants for startup capital and core infrastructure like loan origination systems, compliance frameworks, and initial staffing. Established CDFIs need ongoing grant support for expanding into new markets, piloting innovative programs, or deepening their community engagement in underinvested areas where loan volume alone can’t cover program costs. Think of grants as an investment in what makes CDFIs different from banks. A CDFI working with first-time homebuyers might spend 20 hours helping a family understand the mortgage process, improve their credit, and navigate down payment assistance programs. That relationship-building work is essential to their mission, but doesn’t fit traditional lending economics.