Community Finance Trends in 2025: Growth and Gaps in Financial Access

CNote Impact Evaluation August 2026

Green financing and home lending grew across the mission-driven banks and credit unions analyzed in CNote’s Impact Cash® network between 2024 and 2025. Yet the share of lending reaching low-income borrowers declined at more than half of institutions reporting that measure in both years. Lending growth and borrower access did not move together consistently.

Each year, institutions in the Impact Cash® network report on their lending, the people they serve, and the practices they use to respond to community needs. CNote compares these annual submissions to understand how activity and access change over time. This report, based on analysis of a targeted sample of 122 mission-driven banks and credit unions, presents the findings, institutions’ explanations of the changes, and the implications for those supporting community finance.

Part One: Where the Network Is Growing

Green Financing Volume Grew 

Among the mission-driven institutions with active green financing programs in both years, 69% grew their programs. The median green financing volume almost doubled, from $8.2M to $16.6M. Combined, the network originated $393.6M in green financing in 2025, up 38% from $285.6M in 2024.

In discussions with institutions about their green financing expansion, we heard that the expansion was primarily driven by increased demand. Consumers are seeking EV loans, solar financing, and energy efficiency products. Institutions that have built the infrastructure to serve that demand are seeing increased volume as they respond. One institution that grew its green financing program by more than 500% attributed approximately 75% of that growth to member demand, with the remaining 25% coming from active promotion of a modest rate discount on qualifying vehicles. This institution also pointed to targeted relationships with local dealerships that were carrying high volumes of qualifying EV inventory.

Green financing growth was not driven by a handful of large institutions, instead it was distributed across the majority of active programs.

Mission-driven community lenders are becoming meaningful participants in climate-aligned lending, not because of policy mandates, but because their communities are asking for these products. The capital flowing through the Impact Cash network is reaching green financing at a pace that outstrips what most observers assume about community bank and credit union capacity in this space.

Home Lending Grew, and the Growth Is Real

The network originated $6.19B in home loans in 2025, up 13.2% from $5.46B in 2024. Loan counts rose 5.6%. 51% of the institutions that reported home lending in both years grew their volume, with no single institution accounting for a disproportionate share of the gain.

The explanation we heard most consistently from institutions in the network was not that housing affordability had improved. It was that buyers who had been waiting for interest rates to return to the lows of 2020 and 2021 finally accepted that those rates were not coming back. After prolonged hesitation, housing transaction volume increased.

First-time homebuyer volume grew 7.8% in absolute terms, which is a positive signal. However, the share of institutions tracking and reporting first-time homebuyer outcomes fell from 43% to 39%, a decline that happened as home lending volume was growing. Measuring who receives the benefit of expanding home lending is as important as measuring the volume itself, and this is an area where data infrastructure across the network needs improvement.

Second-Chance Checking Programs Are Expanding

Second-chance checking accounts serve people whose banking history, typically a record of overdrafts or unpaid fees, makes them ineligible to open a standard checking account at most financial institutions. Among the mission-driven institutions with active second-chance checking programs in both years, two-thirds grew their programs. The median institution opened 91 accounts in 2025, up from 74 in 2024, a 23% increase.

When we spoke with institutions about what was driving this growth, a consistent pattern emerged. In several cases, growth was not coming primarily from open-market demand. Instead, it was coming through intentional community partnerships: connections with workforce development programs, reentry organizations, and employment support services that create structured pathways from employment to banking access. One institution described a partnership with a local nonprofit that helps people secure jobs and then facilitates banking relationships as part of that employment pathway. Two of their second-chance products carry BankOn certification. BankOn is a national initiative that sets standards for what a safe and affordable bank account looks like: low or no fees, no overdraft charges, and no minimum balance requirements. Certification signals that an account has been independently verified to meet those standards, giving consumers a reliable way to identify products that won’t trap them in a cycle of fees.

The growth in second chance checking accounts points to institutions developing replicable models for reaching the unbanked through trusted community intermediaries.

Part Two: Where the Network Is Facing Headwinds

The Low-Income Lending Decline

Among the institutions that reported the share of their loans going to low-income borrowers in both years, 54% reduced that share. The median fell from 27.2% to 22.0%.. The overall low-to-moderate income lending share held roughly stable (61% in 2024 to 60% in 2025), which means the decline is concentrated at the lowest end of the income range: borrowers below approximately 80% of area median income.

What institutions told us. When we spoke with institutions about the low-income lending decline, four distinct explanations emerged, sometimes in combination at the same institution.

Federal funding disruption. Several institutions that rely on CDFI certification and associated grant capital described a year of significant uncertainty around recertification and grant approvals. For programs funded by grants that had already been deployed, this uncertainty meant an inability to make additional loans in certain categories. The pause was not due to reduced demand, but because the types of capital that support mission-aligned underwriting were frozen. One institution described going a full year without clarity on recertification status, during which time they had exhausted grant capital and reached concentration limits on specific loan types.

Credit tightening in response to portfolio stress. This was particularly noted in auto lending where vehicle price inflation combined with insurance affordability challenges created elevated risk rates, leading some institutions to raise their minimum credit score thresholds. A shift from a 560 minimum to a 580 minimum is small in absolute terms but disproportionately affects borrowers at the bottom of the credit spectrum.

Rapid portfolio growth. CNote’s portfolio mix analysis found that institutions whose total loan portfolios grew 15% or more were significantly more likely to see their low-income lending share decline. This was not because they lent less to low-income borrowers in absolute terms, but because growth was concentrated in larger-dollar product categories that raised the denominator faster than low-income focused smaller-dollar lending could keep pace. A single commercial real estate loan, for example, might represent more dollars than an entire year of credit builder or microbusiness lending, and as those larger transactions accumulate, the proportional share going to lower-income borrowers shrinks even when the absolute volume of mission-focused lending holds steady. 

Demand contraction among specific market segments. Several institutions that historically served immigrant communities through ITIN-based lending described reduced activity from those communities in 2025. 

Down Payment Assistance Program Challenges

Down payment assistance is one of the most direct tools for helping financially constrained buyers access homeownership, however total dollars fell 47.7%, the number of recipients fell 21.7%, and 58% of institutions with active programs in both years reported lower assistance. The institutions that maintained active programs generally concentrated their limited resources on fewer transactions, with the median grant size growing from $127K to $167K.

Network institutions shared that municipal and city-level DPA funding sources have become less reliable, not because programs have been eliminated, but because funds are being exhausted earlier in the year than institutions can plan around. Nationally, the total count of DPA programs actually grew 6% year over year according to Down Payment Resource’s Q4 2025 Homeownership Program Index, However available funds may run dry before the year ends. The Chicago Housing Authority’s DPA program, for example, depleted its entire 2025 allocation by October and closed to new applicants for the remainder of the year. 

Declining Alternative Underwriting 

Alternative underwriting, meaning the use of criteria beyond credit scores such as rent payment history, utility payments, or cash flow analysis, is one of the primary tools through which mission-driven lenders reach borrowers who are creditworthy but credit-invisible. The share of institutions using alternative underwriting criteria on at least some loans fell from 67% in 2024 to 63% in 2025, while the share requiring credit scores for all loans rose from 34% to 38%.

One institution in our network described raising its minimum credit score threshold directly in response to auto loan losses. This trend is consistent with sector-wide patterns. The NCUA flagged deteriorating loan performance in 2024 as a top supervisory priority, noting delinquency and charge-off rates at their highest levels in over a decade, concentrated particularly in used vehicle loan portfolios. 

Part Three: What This Analysis Reveals About Impact Measurement Practice

Longitudinal Analysis Provides a More Nuanced Understanding

One finding from this analysis is less about network performance itself and more about how that performance is measured. 

Several results looked meaningfully different when we analyzed changes among the same institutions over time rather than simply comparing aggregate totals from one year to the next. Jobs created and retained is the clearest example. At the aggregate level, reported jobs increased by 67%. But among institutions that reported in both years, there was no clear upward trend: the cohort was evenly split between institutions reporting an increase and those reporting a decline. The aggregate increase was driven by institutions entering the dataset in the later year, not by improved performance among existing reporters.

This does not make aggregate reporting less useful. Aggregate figures are important for understanding the overall scale of activity across a network, including total lending, capital deployment, and people or communities reached. However, when the goal is to understand whether performance is changing over time, comparing a consistent group of institutions provides a much clearer signal.

About This Analysis

The network. Every institution in the Impact Cash® network has completed CNote’s impact diligence and annual reporting process, which requires banks and credit unions to document the underserved communities they serve, the challenges those communities face, and the products and services they deploy to meet those needs. It also requires documentation of how representative their leadership is of the communities they serve, the mechanisms they use to remain responsive to community needs, and the depth of their lending to underserved communities, most commonly through lending to low- and moderate-income communities. The result is a dataset that reflects institutions actively providing responsive and responsible lending in underserved communities.

The dataset.  A targeted sample of the mission-driven banks and credit unions in CNote’s Impact Cash® network with submitted impact data in both 2024 and 2025. 

The methodology. All figures in this report reflect matched-pair analysis: every comparison is between the same institution in two consecutive years. 

What self-reported data gives us that regulatory data cannot. Our impact survey captures metrics that do not appear in call reports or regulatory filings: second-chance checking accounts opened, down payment assistance provided, financial education participants reached, etc. These are the metrics most directly relevant to whether a mission-driven lender is doing what it says it does. They require institutions to track and report them voluntarily, which means the quality of the data depends on the rigor of the reporting process. We review all submissions, flag anomalies for follow-up, and correct any confirmed errors before publishing. 

Qualitative outreach. Following the initial analysis, we contacted a select group of institutions whose data showed significant or notable changes, asking them to explain what the numbers reflected. Their responses are integrated throughout this report and attributed anonymously,

---

Published by CNote Impact Evaluation, September 2026. Data based on self-reported annual impact surveys submitted by mission-driven depository institutions in both 2024 and 2025. All figures subject to the methodology limitations described above. CNote is a community finance platform that deploys capital to mission-driven banks, credit unions, and CDFI Loan funds  across the United States.