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Change Co. Bundles Loans to Low-Income Borrowers Into ESG Bonds

  • Second securitization deal is expected later this quarter
  • Mortgages are for borrowers that won’t otherwise get credit
Homes at subdivision in Georgia.
Homes at subdivision in Georgia.Photographer: Elijah Nouvelage/Bloomberg

Change Company, a community mortgage lender based in California, has packaged residential home loans made to people of color and low-income borrowers into a first-of-its kind bond and is planning a second round.

The firm sold a $297 million mortgage bond deal last week. Change Company is a lender known as a community development financial institution, which were created in 1994 to provide loans mainly in neighborhoods and areas that might not otherwise have access to credit. They are eligible to receive grants and low-cost funding from the U.S. Treasury.