[Federal Register: February 4, 2003 (Volume 68, Number 23)]
[Notices]
[Page 5743-5746]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe03-140]
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DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Notice of Funds Availability (NOFA) Inviting Applications for the
Community Development Financial Institutions Program, the Native
American CDFI Development Program, and the Bank Enterprise Award
Program
AGENCY: Community Development Financial Institutions Fund, Department
of the Treasury.
ACTION: Preamble for Notices of Funds Availability (``NOFA'') inviting
applications for the FY 2003 funding round of the Technical Assistance
Component and Financial Assistance Component of the Community
Development Financial Institutions (``CDFI'') Program, the Native
American CDFI Development (``NACD'') Program, and the Bank Enterprise
Award (``BEA'') Program.
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SUMMARY:
I. Legislative Background
The Community Development Banking and Financial Institutions Act of
1994 (12 U.S.C. 4701 et seq.) (the ``Act'') authorizes the Community
Development Financial Institutions Fund (the ``Fund'') of the U.S.
Department of the Treasury to promote economic revitalization and
community development through investment in and assistance to Fund-
certified community development financial institutions (``CDFIs'')
through the CDFI Program. The Act also authorizes the Fund to provide
incentives, through the BEA Program, to insured depository institutions
for the purposes of promoting investments in or other support to CDFIs
and facilitating increased lending and provision of financial and other
services in economically distressed communities. In addition, the
Departments of Veterans Affairs and Housing and Urban Development, and
Independent Agencies Appropriations Act, 2002 (Pub. L. No. 107-73)
authorizes the Fund to provide technical assistance grants to promote
economic development in Native American, Alaska Native and Native
Hawaiian communities by building the capacity of
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CDFIs that serve Native American, Alaska Native and Native Hawaiian
populations. Further, Title I, subtitle C, section 121 of the Community
Renewal Tax Relief Act of 2000, as enacted by section 1(a)(7) of the
Consolidated Appropriations Act, 2001 (Pub. L. No. 106-554, December
21, 2000), established the New Markets Tax Credit (``NMTC'') Program
which will provide an incentive to investors in the form of a tax
credit over seven years, which is expected to stimulate the provision
of private investment capital that, in turn, will facilitate economic
and community development in low-income communities.
II. The CDFI Fund's Programs: A Continuum of Capital, Investment and
Incentive Opportunities
Credit and investment capital are essential ingredients for
developing affordable housing, promoting homeownership, starting or
expanding businesses, meeting unmet market needs, and stimulating
economic growth. Access to financial services is critical to helping
bring more Americans into the economic mainstream. Provision of
counseling and technical assistance is needed for Americans to
effectively use the nation's financial system and avoid ``predatory''
financial products.
Through the CDFI Program, the BEA Program and the NMTC Program, the
Fund supports financial institutions around the country that are
specifically dedicated to financing and supporting community and
economic development activities. This strategy builds strong
institutions that make loans and investments and provide financial
services in markets (including economically distressed investment areas
and disadvantaged targeted populations) whose needs for loans,
investments, and financial services have not been fully met by
traditional financial institutions, particularly in the areas of
promoting homeownership, developing affordable housing, and stimulating
small business development, as well as providing financial services to
those that have not previously accessed financial institutions. The
Fund's programs are designed to address the unique capitalization and/
or technical capacity needs of CDFIs and other community development
entities, so that they may better meet the needs of their particular
target markets through loans, investments, financial services and other
related activities.
Pursuant to the Act, in 2001, the Fund completed and published the
Native American Lending Study (``the Study''), which identifies
significant barriers to lending and investment in Native American,
Alaska Native and Native Hawaiian communities and strategies for
overcoming those barriers. One of the barriers identified by the Study
is the small number of CDFIs and other financial institutions in Native
American, Alaska Native and Native Hawaiian communities. Since CDFIs
are important tools for developing self-sustaining economies in many
underserved communities, the Fund seeks to assist Native American,
Alaska Native and Native Hawaiian communities to create and develop
CDFIs that serve such communities.
In Fiscal Year 2003, the components of the CDFI Program, the NACD
Program, the New Markets Tax Credit (``NMTC'') Program, and the BEA
Program (each described below), together constitute a continuum of
programmatic and investment alternatives to support financial
institutions in their efforts to provide capital and financial services
to underserved communities. These program alternatives range from
capacity-building and technical assistance grants to emerging entities,
to financial investments to capitalize CDFIs, to community development
investment incentives for insured depository institutions, to Federal
tax credit incentives for community development investors.
(1) Technical Assistance Component (CDFI Program): Through the
Technical Assistance Component of the CDFI Program, the Fund provides
technical assistance (``TA'') grants to CDFIs, and entities proposing
to become CDFIs, in order to build their capacity to better address the
community development and capital access needs of their particular
target markets including, but not limited to, entities specifically
serving or proposing to serve Native American, Alaska Native and/or
Native Hawaiian communities. The FY 2003 and 2004 NOFA for the
Technical Assistance Component is published in this issue of the
Federal Register.
(2) Native American CDFI Development Program: Through the NACD
Program, the Fund may provide TA grants to entities in order to create
CDFIs designed to address the community development and capital access
needs of Native American, Alaska Native and/or Native Hawaiian
communities. The FY 2003 and 2004 NOFA for the NACD Program is
published in this issue of the Federal Register. Interested parties
should be aware that implementation of the FY 2003/04 NOFA for the NACD
Program is contingent on the appropriation of funds for the purposes
enumerated in the NOFA; as of the date of this NOFA, said appropriation
is pending with Congress. The Fund will issue a notice on its Web site,
at http://www.cdfifund.gov, at such time that the Fund has the
authority to implement the FY 2003/04 NOFA for the NACD Program.
(3) Financial Assistance Component (CDFI Program): Through the
Financial Assistance Component of the CDFI Program the Fund makes
financial investments in, and provides TA grants to, CDFIs that have
comprehensive business plans for creating demonstrable community
development impact through the deployment of capital within their
respective target markets and CDFIs that demonstrate the ability to
effectively leverage private sector sources of capital. The FY 2003
NOFA for the Financial Assistance Component is published in this issue
of the Federal Register.
(4) New Markets Tax Credit Program: Through the NMTC Program, the
Fund provides an incentive to investors in the form of a tax credit
over seven years, which is expected to stimulate investment in private
capital that, in turn, will facilitate economic and community
development in low-income communities. The calendar year 2003 Notice of
Allocation Availability for the NMTC Program will be published in the
Federal Register at a later date.
(5) Bank Enterprise Award Program: Through the BEA Program, the
Fund provides financial incentives to insured depository institutions
for the purpose of promoting investments in, or other support to, CDFIs
and facilitating increased lending and provision of financial and other
services in economically distressed communities. The FY 2003 NOFA for
the BEA Program is published in this issue of the Federal Register.
The revised interim rule for the CDFI Program (12 CFR 1805) and the
revised interim rule for the BEA Program (12 CFR 1806) are also
published in this issue of the Federal Register. Please refer to the
program regulations for an in-depth understanding of the respective
programs.
The following table provides a brief summary of certain aspects
found in each NOFA for the Fund's components or programs for FY 2003
and is intended to offer guidance to potential applicants as to which
components or programs they might be eligible to apply. Please refer to
each individual NOFA for specific application, eligibility, and
evaluation information for the particular component or program for FY
2003.
[[Page 5745]]
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Purpose; types and
Component or program amounts of assistance Eligible applicants Application deadlines
available
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Technical Assistance Component (CDFI TA grants to build CDFIs and other Applications will be
Program). capacity to share entities proposing to accepted and evaluated
target markets; up to become CDFIs; except on a first-come, first-
$50,000 per award; up those that have been reviewed basis,
to $100,000 per award previously selected to beginning with the
for entities receive in aggregate date of this NOFA,
principally serving or over $250,000 in TA or through May 31, 2004
proposing to serve FA from the Fund. (subject to FY 2004
Native American, funding availability).
Alaska Native, or
Native Hawaiian
communities.
Native American CDFI Development TA grants to build Entities that are not, Applications will be
(``NACD'') Program. capacity to create or will not become accepted and evaluated
CDFIs to serve target certified CDFIs but on a first-come, first-
markets; up to instead plan to create reviewed basis,
$100,000 per award. CDFIs to principally beginning with the
serve Native American, date of this NOFA,
Alaska Native and/or through May 31, 2004
Native Hawaiian (subject to FY 2003
communities. and 2004 funding
availability).
Financial Assistance Component (CDFI To (i) address Category I includes March 10, 2003.
Program). community development CDFIs that have
finance needs in ``Hot capitalization needs
Zones,'' and/or (ii) up to and including
increase affordable $1,000,000 and total
homeownership assets as of December
opportunities, 31, 2002 that range up
increase homeownership to $250 million (for
opportunities for insured depository
Other Targeted institutions and
Populations, generate depository institution
employment holding companies), up
opportunities, and/or to $25 million (for
expand the insured credit
availability of unions), or up to $15
financial services to million for other
people who have not CDFIs; Category II
previously had a includes CDFIs with
banking relationship assets above those
with a financial ranges and/or that can
institution. FA effectively deploy
investments (grants, funding in an amount
loans, equity in excess of
investments, secondary $1,000,000, either to
capital accounts, leverage greater
deposits, credit union private sector
shares) and TA grants; resources in support
up to $1,000,000 per of their lending and
award for Category I investing activities
CDFIs and up to (through funding a
$2,000,000 per award loan loss reserve or
for Category II CDFIs. credit enhancement),
or to develop and
effectively provide
innovative financial
products and services
that address the
capital needs of
particularly
underserved markets.
Bank Enterprise Award (``BEA'') Grants................. FDIC insured depository July 17, 2003 for six
Program. institutions. month assessment
period and February
25, 2004 for twelve
month assessment
period.
New Markets Tax Credit (``NMTC'') Federal tax credits for Community Development To be determined.
Program. investors. Entities, certified by
the Fund.
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An applicant may only apply for an award through one of the CDFI
Program Components or the NACD Program, with the sole exception of a
certified CDFI that applies for funds through the NACD Program in
collaboration with a Native American Partner (such a CDFI may also
apply for the CDFI Program, provided that the applications seek funding
for different activities). While an applicant may receive only one
award through the CDFI Program, an applicant, its Subsidiaries or
Affiliates may apply for and receive both a tax credit allocation
through the NMTC Program and an award through the CDFI Program or the
NACD Program.
III. Hot Zones and Programmatic Priorities
Through the FY 2003 NOFA for the Financial Assistance Component of
the CDFI Program, the Fund intends to target its resources and provide
financial assistance awards to CDFIs that will use award proceeds to:
(a) Serve Hot Zones, meaning geographic areas designated by the
Fund as having greater levels of economic distress, and/or
(b) Achieve the Fund's FY 2003 Programmatic Priorities, which are:
(i) To increase homeownership opportunities that are affordable to
Low-Income households, and
(ii) To increase homeownership opportunities for Other Targeted
Populations (as said term is defined in the FY 2003 NOFA for the
Financial Assistance Component).
For purposes of the FY 2003 NOFA for the Financial Assistance
Component, the Hot Zones (and the Fund's methodology for Hot Zone
designation) are identified through the Fund's Web site at http://www.cdfifundhelp.gov
and the Financial Assistance Component
application.
IV. Funding Availability
Subject to funding availability, and provided that the Fund deems
it appropriate, the Fund expects to make funds available for Fiscal
Year 2003 awards (and FY 2004 awards, as the case may be) as follows:
(a) Technical Assistance Component: approximately $13 million
(including approximately $3 million for entities
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serving or proposing to serve Native American, Alaska Native, or Native
Hawaiian communities) for FY 2003 awards, and approximately $4.5
million for FY 2004 awards, in appropriated funds;
(b) NACD Program: approximately $3 million for FY 2003 awards, and
approximately $1.5 million for FY 2004 awards, in appropriated funds;
(c) Financial Assistance Component: approximately $30 million for
FY 203 awards, in appropriated funds; and
(d) BEA Program: approximately $17 million for FY 2003 awards, and
approximately $8 million for FY 2004 awards, in appropriated funds.
The Fund reserves the right to re-allocate funds from the amount
that is anticipated to be available under any particular NOFA, to other
Fund programs, particularly if the Fund determines that the number of
awards made under a particular NOFA(s) is/are fewer than projected
based on the applications received. The Fund, in its sole discretion,
reserves the right to award amounts in excess of the anticipated
maximum award if the Fund deems it appropriate. Further, the Fund
reserves the right to fund, in whole or in part, any, all, or none of
the applications submitted in response to any of the NOFAs.
FOR FURTHER INFORMATION CONTACT: If you have any questions about the
programmatic requirements for the CDFI Program or the NACD Program,
contact the Fund's Program Operations Manager. If you have any
questions about the programmatic requirements for the BEA Program,
contact the Fund's Depository Institutions Manager. If you have any
questions about the programmatic requirements for the NMTC Program,
contact the Fund's Financial Equity Manager. If you wish to request an
application or have questions regarding administrative requirements for
any of the Fund's programs, contact the Fund's Awards Manager. The
Program Operations Manager, the Depository Institutions Manager, the
Financial Equity Manager and the Awards Manager may be reached by e-
mail at cdfihelp@cdfi.treas.gov, by telephone at (202) 622-6355, by
facsimile at (202) 622-7754, or by mail to CDFI Fund, 601 13th Street,
NW., Suite 200 South, Washington, DC 20005. These are not toll free
numbers. Allow at least one to two weeks from the date the Fund
receives a request for receipt of the application. Applications and
other information regarding the Fund and its programs may be accessed
and/or downloaded from the Fund's Web site at http://www.cdfifund.gov.
Information Sessions
In connection with the Fiscal Year 2003 funding rounds of its
programs, the Fund may conduct Information Sessions to disseminate
information to organizations contemplating applying to, and other
organizations interested in learning about, the Technical Assistance
and the Financial Assistance Components of the CDFI Program, the NACD
Program, and the BEA Program. For further information on the Fund's
Information Sessions, dates and locations, or to register online to
attend an Information Session, please visit the Fund's Web site at
http://www.cdfifund.gov. If you do not have Internet access, you may
register by calling the Fund at (202) 622-8401.
(Catalog of Federal Domestic Assistance: 21.020, 21.021)
Authority: 12 U.S.C. 1834a; 4703, 4703 note, 4704, 4706, 4707,
4713, 4717; 31 U.S.C. 321; 12 CFR part 1805; 12 CFR part 1806; 26
U.S.C. 45D.
Dated: January 27, 2003.
Tony T. Brown,
Director, Community Development Financial Institutions Fund.
[FR Doc. 03-2341 Filed 2-3-03; 8:45 am]
BILLING CODE 4810-70-P