Secondary Capital

Secondary Capital Loans are subordinated, long-term debt available to credit unions with low-income designation from their regulator. Although it is a loan, Secondary Capital counts as net worth for regulatory purposes because it is available to cover any insolvency of the credit union. Secondary Capital can be leveraged by growing CDCUs to expand safe and affordable lending to local communities.


Federation member credit unions with low-income designation that meet our general Eligibility Criteria are eligible to apply for Secondary Capital Loans.


The Federation makes secondary capital loans of up to $500,000 with maturities of 5-7 years. Interest rates range between 5% and 6%. Per regulatory guidelines, at the outset of a Secondary Capital Loan, the entire principal of the loan can be counted toward net worth. In each of the last 5 years of the loan term, the amount of the loan that can be counted toward net worth reduces by 20%. In the last year of the loan, the entire loan principal is booked as a subordinated loan and can no longer be counted as net worth.

How to Apply

Download and complete the Secondary Capital Loan application form and submit with required documents and application fee to the Federation per provided instructions. Applications for risk-sharing deposits and secondary capital are accepted on a continuous basis but are considered for approval only at the triannual meetings of the Community Development Investments Committee.

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