Our Impact Glossary defines some of the terms and frameworks central to our approach to fixed income impact investing and is designed to help investors, partners, and community members better understand the language behind our work.
Below you’ll find definitions of concepts that guide our approach to fixed income impact investing. Our goal is to make impact investing more transparent and meaningful for all investors. If you have any questions, please email Jessica Botelho, Co-Chief Impact Strategist at jbotelho@ccminvests.com.
IMPACT GLOSSARY
Area Median Income (AMI)
AMI is the midpoint of a region’s income distribution — half of families in a region earn more than the median and half earn less than the median. For housing policy, income thresholds set relative to the AMI — such as 50% of the AMI — identify households eligible to live in income-restricted housing units and the affordability of housing units to low-income households.
Difficult Development Area (DDA)*
DDAs are areas with high land, construction, and utility costs relative to the area median income as defined.
Distressed or Underserved Census Tracts*
Distressed or underserved census tracts are non-metropolitan, middle-income geographies located in counties with: (1) an unemployment rate of at least 1.5 times the national average; (2) a poverty rate of 20% or more; or (3) a population loss of 5% or more in a five-year period preceding the most recent decennial census.
First-Time Homebuyer*
CCM uses the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration’s (FHA) definition for firs-time buyers, which helps lenders properly identify homebuyers meeting this criteria.
Historically Underutilized Business (HUB) Zone*
A HUB Zone is a U.S. Small Business Administration (SBA) program for small companies that operate and employ people in historically underutilized business zones.
High Needs Rural Regions
Rural areas in Middle Appalachia, Lower Mississippi Delta, or Colonias or census tracts located in Persistent Poverty Counties.
High Minority Census Tract*
A high minority census tract is one where minority households represent over 80% of the population.
High Poverty Census Tract*
High poverty census tracts are those that have a poverty rate greater than 20% per the Federal Financial Institutions Examination Council (FFIEC), which is tracked annually.
Just Transition
A just transition is a framework that aims to ensure that the transition to a sustainable economy is fair and inclusive.
Low- and Moderate-Income (LMI) Census Tract*
A property or business in a low-income census tract is where the median family income (MFI) of residents residing in the census tract is less than 50% of the MFI of the Metropolitan Statistical Area (MSA) or non-MSA. A property or business in a moderate-income census tract is where the median family income of residents residing in the census tract is greater than or equal to 50% and less than 80%.
Majority-Minority Census Tract*
Majority-minority census tracts are those where minority households represent over 50% of the population.
Medically Underserved Areas
Medically underserved areas or populations are designated by HRSA (U.S. Department of Health and Human Services, Health Resources and Services Administration) as having too few primary care providers, high infant mortality, high poverty, and/or high elderly population.
Metropolitan Statistical Area (MSA)
An MSA is a geographical region with relatively high population density at its core and close economic ties throughout the area.
Opportunity Zones
Opportunity Zones are defined by the IRS as economically distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment. Opportunity Zones are designed to spur economic development and job creation by providing tax benefits to investors who invest eligible capital into these communities.
Persistent Poverty County (PPC)*
A PPC is a county in a rural area that has had 20% or more of its population living in poverty over the past 30 years, as measured by the most recent decennial censuses.
Racially or Ethnically Concentrated Areas of Poverty (R/ECAPs)*
HUD has developed a census tract-based definition for R/ECAPs that must have a non-white population of 50% or more. Regarding the poverty threshold, neighborhoods of extreme poverty are census tracts with 40% or more of individuals living at or below the poverty line. Because overall poverty levels are lower in many parts of the country, HUD supplements this definition with an alternate criterion. Thus, a neighborhood can be a R/ECAP if it has a poverty rate that exceeds 40% or is three or more times the average tract poverty rate for the metropolitan/micropolitan area, whichever threshold is lower.
Rural Census Tract*
Counties that are not part of an MSA or a census tract in an MSA that is outside of the MSA’s Urbanized Areas, as designated by the U.S. Department of Agriculture’s (USDA) Rural-Urban Commuting Area (RUCA) Code #1, and outside of tracts with a housing density of over 64 housing units per square mile for USDA’s RUCA Code #2.
Walk Score®
Walk Score’s mission is to promote walkable neighborhoods. Walkable neighborhoods are one of the simplest and best solutions for the environment, overall health, and the economy. CCM tags investments that have high Walk, Bike, and Transit Scores above 70.
- Walk Scores of 90–100 are considered a “Walker’s Paradise” where daily errands do not require a car. Walk Scores of 70–89 are considered “Very Walkable” where most errands can be accomplished on foot.
- Bike Scores of 90–100 are considered a “Biker’s Paradise” where daily errands can be accomplished on a bike. Bike Scores of 70–89 are considered “Very Bikeable” where biking is convenient for most trips.
- Transit Scores of 90–100 are considered a “Rider’s Paradise” where world-class public transportation is available. Transit Scores of 70–89 are considered “Excellent Transit” where public transit is convenient for most trips.
Glossary terms marked with an asterisk (*) represent CCM Impact Designations used in our impact reporting. When applicable, these designations are featured in all impact bond stories.
Sources:
- https://www.huduser.gov/portal/datasets/qct.html
- https://hudgis-hud.opendata.arcgis.com/datasets/56de4edea8264fe5a344da9811ef5d6e_0/explore
- https://www.walkscore.com/
- https://www.sba.gov/federal-contracting/contracting-assistance-programs/hubzone-program
- https://www.census.gov/newsroom/press-releases/2023/persistent-poverty.html
- https://www.learncra.com/knowledgebase/what-is-considered-low-or-moderate-income-or-lmi/
- https://www.hud.loans/hud-loans-blog/what-is-area-median-income-ami/
- https://data.hrsa.gov/topics/health-workforce/shortage-areas/mua-find
- https://www.census.gov/programs-surveys/metro-micro.html
- https://onestophousing.com/blog/2022/7/14/workforce-housing-101
- https://www.hud.loans/hud-loans-blog/what-is-area-median-income-ami
- https://www.hud.gov/helping-americans/buying-a-home#openModal
- https://www.ffiec.gov/data/census/overview
- https://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes/descriptions-and-maps
- https://www.fhfa.gov/data/duty-to-serve/high-needs-counties-map-instructions
- https://www.irs.gov/credits-deductions/businesses/opportunity-zones#:~:text=Opportunity%20Zones%20are%20an%20economic,providing%20tax%20benefits%20to%20investors
This glossary is provided for informational purposes only and does not constitute investment advice, an offer, or a recommendation to buy or sell any security.
