[Federal Register: February 26, 2004 (Volume 69, Number 38)]
[Notices]
[Page 9018-9026]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26fe04-130]
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DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Funding Opportunity Title: Notice of Funds Availability (NOFA)
Inviting Applications for the FY 2004 Funding Round of the Financial
Assistance Component of the Community Development Financial
Institutions Program
Announcement Type: Initial announcement of funding opportunity.
Catalog of Federal Domestic Assistance (CDFA) Number: 21.020.
Dates: Applications must be received by 5 p.m. ET on April 28, 2004
(see Section IV.D), and must meet all eligibility and other
requirements and deadlines, as applicable, set forth in this NOFA.
Executive Summary: This NOFA is issued in connection with the FY
2004 funding round of the Financial Assistance (FA) Component of the
Community Development Financial Institutions (CDFI) Program. Through
the FA Component, the Community Development Financial Institutions Fund
(the Fund) provides FA awards and technical assistance (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 for community development purposes.
Through this NOFA, the Fund makes funding available through three
categories: (i) Category I/Small and Emerging CDFI Assistance (SECA);
(ii) Category II/Core & Sustainable CDFIs Assistance (Core); and (iii)
Category III/Financial Leverage and Market Expansion Assistance (FLOW).
I. Funding Opportunity Description
Through this NOFA, the Fund intends to target its resources by
providing (i) FA awards to CDFIs that will use FA award proceeds to
achieve the Programmatic Priorities, in the rank order set forth below,
and (ii) TA grants to build awardee capacity to serve Target Markets.
A. Programmatic Priorities: Please note that Programmatic
Priorities 1-4 are listed in order of priority for awards; the related
activities are not in listed in priority order. Applicants may apply
and be considered for funding for more than one type of Programmatic
Priority and activity.
[[Page 9019]]
------------------------------------------------------------------------
Programmatic priority Activities
------------------------------------------------------------------------
Priority 1........................ [sbull] Affordable Housing in
Housing Hot Zones and/or for Other
Targeted Populations.
[sbull] Economic Development (other
than Community Organization
Support) in Economic Development
Hot Zones and/or for Other Targeted
Populations.
[sbull] Community Development
Financial Services in Economic
Development Hot Zones and/or
Housing Hot Zones.
Priority 2........................ [sbull] Affordable Housing in
Economic Development Hot Zones and/
or other Investment Areas, and/or
for Low-Income Targeted
Populations.
[sbull] Economic Development (other
than Community Organization
Support) in other Investment Areas
and/or for Low-Income Targeted
Populations.
[sbull] Community Development
Financial Services for Low-Income
Targeted Populations and/or Other
Targeted Populations.
Priority 3........................ [sbull] Community Development
Financial Services in Investment
Areas (other than Hot Zones).
[sbull] Community Organization
Support.
Priority 4........................ [sbull] Other activities as
requested by the applicant and
deemed appropriate by the Fund.
------------------------------------------------------------------------
B. CDFI Program Regulations: The interim rule governing the CDFI
Program can be found at 12 CFR part 1805 and provides guidance on
evaluation criteria and other requirements of the CDFI Program. The
Fund expects to issue a revised interim rule in the very near future.
The Fund encourages applicants to review the interim rule and its
revision, when published.
C. Definitions: All defined terms in this NOFA shall have the
meanings ascribed to them in the interim rule. For purposes of this
NOFA, certain terms in the Programmatic Priority chart above are
defined as following:
(i) Affordable Housing includes activities that: (A) Promote the
supply of housing through the provision of pre-development financing,
construction and rehabilitation financing, and related Development
Services, and/or (B) increase homeownership through the provision of
first mortgage financing, subordinated mortgages (for home purchase and
rehabilitation), and related Development Services.
(ii) Community Development Financial Services include Financial
Services, financial education and other Development Services,
appropriate consumer loans, and re-financing of predatory loans.
(iii) Community Facilities: see 12 CFR 1805.104(j).
(iv) Community Organization Support includes: Financial Products
(see 12 CFR 1805.104(t)) related to the acquisition, construction,
development, or rehabilitation of Community Facilities; business loans
to non-profit organizations; and related Development Services, to non-
profit organizations.
(v) Development Services: see 12 CFR 1805.104(r).
(vi) Economic Development includes: Activities that support the
creation and retention of jobs and the growth of businesses through (i)
loans, Equity Investments and other similar financing to for-profit
small businesses, microenterprises, and commercial real estate other
than Community Facilities, (ii) related Development Services, and (iii)
Community Organization Support.
(vii) Financial Services: see 12 CFR 1805.104(u).
(viii) Hot Zones (and the Fund's methodology for Hot Zone
designation) are subsets of Investment Areas and are identified at the
Fund's Web site at http://www.cdfifundhelp.gov. For purposes of this
NOFA, Hot Zones include Economic Development Hot Zones, Housing Hot
Zones, and a combination thereof.
(ix) Investment Areas: see 12 CFR 1805.104(cc).
(x) Low-Income Targeted Populations: see 12 CFR 1805.104(dd) and
(ii).
(xi) Other Targeted Populations include identifiable groups of
individuals in the applicant's service area for which there exists a
strong basis in evidence that they lack access to loans, Equity
Investments and/or Financial Services (for further description, see
Eligibility section, below).
II. Award Information
A. Award Information: Subject to funding availability, the Fund
expects that it may award approximately $45 million in appropriated
funds under this NOFA. The Fund reserves the right to award in excess
of $45 million in appropriated funds under this NOFA provided that the
funds are available and the Fund deems it appropriate. Under this NOFA,
the Fund anticipates making awards (i) up to and including $300,000 per
award for Category I/SECA CDFIs; (ii) up to and including $1,000,000
per award for Category II/Core CDFIs; and (iii) up to and including
$2,000,000 per award for Category III/FLOW CDFIs. The Fund, in its sole
discretion, reserves the right to award amounts in excess of or less
than the anticipated maximum award amount 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
this NOFA. The Fund reserves the right to re-allocate funds from the
amount that is anticipated to be available under this NOFA to other
Fund programs.
B. Types of Awards: An applicant may submit an application either
for FA only, or for FA and a TA grant, under this NOFA. While the FA
Component offers TA grants in conjunction with FA awards, entities
seeking TA grants only should apply for funds through the Technical
Assistance Component of the CDFI Program. The FY 2003 NOFA for the
Technical Assistance Component was published in the Federal Register on
February 4, 2003 (68 FR 5735).
1. FA Awards: (a) Types of FA awards: FA may be provided by the
Fund through an equity investment (including, in the case of certain
Insured Credit Unions, secondary capital accounts), a grant, loan,
deposit, credit union shares, or any combination thereof. The Fund
reserves the right, in its sole discretion: (i) To provide FA in a form
and amount other than that which is requested by an applicant; (ii) to
offer TA for specified purposes, even if the applicant has not
requested TA; and/or (iii) to condition the awarding of FA on the
applicant agreeing to use TA for specified purposes.
(b) For any Category I/SECA applicant that does not meet certain
minimum evaluation criteria and thus is ineligible for a FA award, the
Fund may offer, in its sole discretion, the opportunity for the
applicant to submit certain additional documentation demonstrating the
need for a TA-only award from the TA Component, which the Fund may
provide in amounts and for uses the Fund deems appropriate, subject to
funding availability.
2. TA Grants: TA awards are in the form of grants. The Fund
reserves the right, in its sole discretion, to provide a TA grant for
uses and amounts other than that which are requested by an
[[Page 9020]]
applicant. Applicants for TA grants under this NOFA shall describe the
type(s) of TA requested, when the TA will be acquired, the provider(s)
of the TA, the cost of the TA, and a narrative description of how the
TA will enhance their capacity to provide greater community development
impact. Capacity enhancements may address a range of activities
including, but not limited to, improvement of underwriting and
portfolio management, development of outreach and training strategies
to enhance product delivery, and tools that allow the applicant to
assess the impact of its activities in its community.
Eligible types of TA grant uses include, but are not limited to,
the following: (i) Acquiring consulting services; (ii) paying staff
salary for the limited purposes of completing tasks and/or fulfilling
functions that are otherwise eligible TA grant uses under this NOFA;
(iii) acquiring/enhancing technology items, including computer
hardware, software and Internet connectivity; and (iv) acquiring
training for staff or management.
The Fund will not consider requests for TA grants under this NOFA
for expenses that, in the determination of the Fund, are deemed to be
ongoing operating expenses rather than non-recurring expenses. The Fund
will consider requests for use of TA to pay for staff salary only when
the applicant demonstrates, to the Fund's satisfaction, that: (i) The
staff salary relates directly to building the applicant's capacity to
serve its target market; (ii) the proposed staff time to be paid for by
the TA grant will be used for a non-recurring activity that will build
the applicant's capacity to achieve its objectives as set forth in its
Comprehensive Business Plan; (iii) the proposed capacity-building
activity would otherwise be contracted to a consultant or not be
undertaken; and (iv) the staff person assigned to the proposed task has
the competence to successfully complete the activity. Further guidance
on the limited uses of TA grants for staff salary expenditures is
available on the Fund's Web site at http://www.cdfifund.gov.
C. Notice of Award; Assistance Agreement: Each awardee under this
NOFA must sign a Notice of Award (for further information, see Section
VI.A, below) and an Assistance Agreement (see Section VI.B, below)
prior to disbursement by the Fund of award proceeds. The Notice of
Award and the Assistance Agreement contain the terms and conditions of
the award.
III. Eligibility Information
A. Eligible Applicants: The interim rule specifies the eligibility
requirements that each applicant must meet in order to be eligible to
apply for assistance under this NOFA. The following sets forth
additional detail and certain additional dates that relate to the
submission of applications under this NOFA:
1. Applicant Categories: The FA Component is designed to address
the capitalization and liquidity needs of three types of CDFIs:
------------------------------------------------------------------------
What can it apply
Applicant category Criteria for?
------------------------------------------------------------------------
Category I: Small and A Category I/SECA A Category I/SECA
Emerging CDFIs Assistance applicant is a CDFI applicant may
(SECA). that: request up to and
Has total assets as including $300,000
of December 31, in FA or FA/TA.
2003 as follows:.
[sbull] Insured
Depository
Institutions and
Depository
Institution Holding
Companies: up to
$100 million.
[sbull] Insured
Credit Unions: up
to $10 million
[sbull] Venture
capital funds: up
to $10 million.
[sbull] Other CDFIs:
up to $5 million.
OR
Did not begin
operations prior to
April 15, 2001
AND
Prior to the date of
application under
this NOFA, has not
been selected to
receive any
award(s) under the
CDFI Program that
total in the
aggregate an amount
greater than
$300,000
Category II: Core & A Category II/Core A Category II/Core
Sustainable CDFIs applicant is a CDFI applicant may
Assistance (Core). that has total request up to and
assets as of including $1
December 31, 2003 million in FA or FA/
as follows: TA.
[sbull] Insured
Depository
Institutions and
Depository
Institution Holding
Companies: up to
$500 million.
[sbull] Insured
Credit Unions: up
to $25 million.
[sbull] Other CDFIs:
up to $25 million.
Category III: Financial A Category III/FLOW A Category III/FLOW
Leverage and Market applicant is a CDFI applicant may
Expansion Assistance (FLOW). that has total request up to and
assets as of including $2
December 31, 2003 million in FA or FA/
as follows: TA.
[sbull] Insured
Depository
Institutions and
Depository
Institution Holding
Companies: $500
million and greater.
[sbull] Insured
Credit Unions: $25
million and greater.
[sbull] Other CDFIs:
$25 million and
greater.
------------------------------------------------------------------------
An applicant of any size or age can apply for a higher amount of
funding by applying in a higher-numbered Category. Applicants will be
evaluated and ranked with all other applicants; however, in an effort
to achieve an awardee pool that reflects a blend of emerging and mature
CDFIs of varying asset sizes, the Fund will evaluate
[[Page 9021]]
Category I/SECA applicants using more flexible review standards.
2. CDFI Certification: For purposes of NOFA, an application for an
award will not be considered unless:
(a) The applicant is already certified as a CDFI, with a
certification expiration date on or after December 31, 2004. Please
note: The Fund provided a number of CDFIs with certifications expiring
in 2003 and 2004 with notification that their certification had been
extended. The Fund will consider the extended certification date (the
later date) to determine whether those CDFIs meet this eligibility
requirement; or
(b) The Fund receives from an applicant a complete CDFI
certification application no later than March 31, 2004, evidencing that
the applicant can be certified as a CDFI. Applicants may obtain CDFI
certification applications through the Fund's Web site at http://www.cdfifund.gov.
Applications for certification must be submitted as
instructed in the application form.
3. Prior Awardees: Applicants must be aware that success in a prior
round of any of the Fund's programs is not indicative of success under
this NOFA. Previous awardees are eligible to apply under this NOFA,
except as follows:
(a) Any entity that has received a Notice of Award from the Fund
for a prior funding round of the CDFI Program, Native American CDFI
Technical Assistance (NACTA) Program, or Native American CDFI
Development (NACD) Program funding round, but that has not submitted a
CDFI certification application nor been certified as a CDFI, is not
eligible to receive funding under this NOFA (see CDFI Certification
section, above).
(b) The Fund is generally prohibited from obligating more than $5
million in assistance, in the aggregate, to any one organization and
its Subsidiaries and Affiliates during any three-year period. For the
purposes of this NOFA, the three-year period extends back from the date
of obligation under the NOFA. The Fund will deem the date of the Fund's
obligation of assistance to an organization as evidenced by the date
that the Fund has signed the Notice of Award issued to an awardee.
(c) The Fund will not consider an application submitted by an
applicant that is a prior Fund awardee under any Fund program if the
applicant is not current on its reporting requirements, set forth in
the previously executed assistance or award agreement(s), as of the
application deadline of this NOFA. Further, an entity is not eligible
to apply for an award pursuant to this NOFA if another entity that
Controls the applicant, is Controlled by the applicant or shares common
management officials with the applicant (as determined by the Fund), is
a prior Fund awardee under any Fund program and is not current on its
reporting requirements, set forth in the previously executed assistance
or award agreement(s), as of the application deadline of this NOFA.
(d) The Fund will not consider an application submitted by an
applicant that is a previous Fund awardee under any Fund program if the
applicant has received (or receives at any time prior to entering into
an assistance agreement under this NOFA) written notification from the
Fund that it is in default of a previously executed assistance
agreement(s) and/or it has been barred from applying to the Fund for
this funding round. Additionally, prior awardees whose awards
terminated in default status during the period from October 1, 2002
through September 30, 2003, will be found to be ineligible under this
NOFA. Prior awardees whose awards terminated in default status prior
October 1, 2002 may be eligible under this NOFA if other eligibility
requirements are met. Further, an entity is not eligible to apply for
an award pursuant to this NOFA if another entity that Controls the
applicant, is Controlled by the applicant or shares common management
officials with the applicant (as determined by the Fund), is a prior
Fund awardee under any Fund program, has received (or receives at any
time prior to entering into an assistance agreement under this NOFA)
written notification from the Fund that it is in default of a
previously executed assistance agreement(s) and/or it has been barred
from applying to the Fund for this funding round, and/or has an
award(s) that terminated in default status during the period from
October 1, 2002 through September 30, 2003.
(e) The Fund will not consider an application submitted by an
applicant that is a prior Fund awardee under any Fund program if the
applicant has a balance of undisbursed funds (defined below) under said
prior award(s), as of the application deadline of this NOFA. Further,
an entity is not eligible to apply for an award pursuant to this NOFA
if another entity that Controls the applicant, is Controlled by the
applicant or shares common management officials with the applicant (as
determined by the Fund), is a prior Fund awardee under any Fund
program, and has a balance of undisbursed funds under said prior
award(s), as of the application deadline of this NOFA. For the purposes
of this section, ``undisbursed funds'' is defined as: (i) In the case
of prior Bank Enterprise Award (BEA) Program award(s), any balance of
award funds equal to or greater than five percent of the total prior
BEA Program award(s) that remains undisbursed more than three (3) years
after the date that the Fund signed an award agreement with the
awardee, and (ii) in the case of prior CDFI Program or other Fund
program award(s), any balance of award funds equal to or greater than
five percent of the total prior award(s) that remains undisbursed more
than two (2) years after the effective date of an assistance agreement
with the Fund. In the case where another entity Controls the applicant,
is Controlled by the applicant or shares common management officials
with the applicant (as determined by the Fund), is a prior Fund awardee
under any Fund program, and has a balance of undisbursed funds under
said prior award(s), as of the application deadline of this NOFA, the
Fund will include the combined awards of the applicant and its
affiliates when calculating the amount of undisbursed funds.
(f) Accordingly, applicants that are prior awardees under any Fund
program are advised to: (i) Comply with requirements specified in award
and/or assistance agreement(s), and (ii) contact the Fund to ensure
that all necessary actions are underway for the disbursement of any
outstanding balance of a prior award(s). All outstanding reports,
compliance or disbursement questions should be directed to the Grants
Management and Compliance Manager by e-mail at gmc@cdfi.treas.gov; by
telephone at (202) 622-8226; by facsimile at (202) 622-6453; or by mail
to CDFI Fund, 601 13th Street, NW., Suite 200 South, Washington, DC
20005. The Fund will respond to applicants' reporting, compliance or
disbursement questions between the hours of 9 a.m. and 5 p.m. ET,
starting the date of the publication of this NOFA through April 26,
2004 (2 days before the application deadline). The Fund will not
respond to applicants' reporting, compliance or disbursement phone
calls or e-mail inquiries that are received after 5 p.m. on April 26,
2004 until after the funding application deadline of April 28, 2004.
4. Eligibility Appeals. Any applicant that is found to be
ineligible for funding through this NOFA on the grounds of late reports
or undisbursed balances, and that believes that such factual
determination was made in error, may appeal said decision by notifying
the Fund's Grants Management and Compliance Manager in writing or by e-
mail (at appeals@cdfi.treas.gov, Attention: GMC Manager). Such appeals
must be received by the Fund within five business days of the date of
the declination letter and must provide
[[Page 9022]]
documented evidence to contradict the Fund's finding. Only one such
appeal per applicant may be made.
5. Limitation on FA Awards: An applicant may receive only one FA
award through either the FA Component or the Native American CDFI
Assistance (NACA) Program. A FA Component applicant, its subsidiaries
or affiliates also may apply for and receive: (i) A tax credit
allocation through the New Markets Tax Credit (NMTC) Program, but only
to the extent that the activities approved for FA Component awards are
different from those activities for which the applicant receives a NMTC
Program allocation; (ii) an award through the BEA Program (subject to
certain limitations; refer to the revised interim rule at 12 CFR
1805.102); and (iii) an award through the TA Component of the CDFI
Program, the NACTA Program and/or the NACD Program, but only to the
extent that the activities approved for a FA award are different from
those for which the applicant receives a TA, NACTA and/or NACD award.
6. Other Targeted Populations: Other Targeted Populations are
defined as identifiable groups of individuals in the applicant's
service area for which there exists a strong basis in evidence that
they lack access to loans, Equity Investments and/or Financial
Services. The Fund has determined that there is strong basis in
evidence that the following groups of individuals lack access to loans,
Equity Investments and/or Financial Services on a national level:
Blacks or African Americans, Native Americans or American Indians, and
Hispanics or Latinos. In addition, for purposes of this NOFA, the Fund
has determined that there is a strong basis in evidence that Alaska
Natives residing in Alaska, and Native Hawaiians or Other Pacific
Islanders residing in Hawaii or other Pacific Islands, lack adequate
access to loans, Equity Investments or Financial Services. An applicant
designating any of the above-cited Other Targeted Populations is not
required to provide additional narrative explaining the Other Targeted
Population's lack of adequate access to loans, Equity Investments or
Financial Services. Additionally, the Fund recognizes that there may be
other such groups for which there is strong basis in evidence that they
lack access to loans, Equity Investments and/or Financial Services.
Such groups may be identified, and evidence of such lack of access may
be provided, in the Market Need section of the application associated
with this NOFA, and the application for CDFI certification (if not
identified in the Target Market of a currently certified CDFI).
For purposes of this NOFA, the Fund will use the following
definitions, set forth in the Office of Management and Budget (OMB)
Notice, Revisions to the Standards for the Classification of Federal
Data on Race and Ethnicity (October 30, 1997):
(a) American Indian, Native American or Alaska Native: A person
having origins in any of the original peoples of North and South
America (including Central America) and who maintains tribal
affiliation or community attachment;
(b) Black or African American: A person having origins in any of
the black racial groups of Africa (terms such as ``Haitian'' or
``Negro'' can be used in addition to ``Black or African American'');
(c) Hispanic or Latino: A person of Cuban, Mexican, or Puerto
Rican, South or Central American or other Spanish culture or origin,
regardless of race (the term ``Spanish origin'' can be used in addition
to ``Hispanic or Latino''); and
(d) Native Hawaiian or Other Pacific Islander: a person having
origins in any of the original peoples of Hawaii, Guam, Samoa or other
Pacific Islands.
For further detail, please visit the Fund's Web site at http://www.cdfifund.gov
, under Certification/Supplemental Information.
B. Matching Funds: 1. Matching Funds Requirements in General:
Applicants responding to this NOFA must obtain non-Federal matching
funds from sources other than the Federal government on the basis of
not less than one dollar for each dollar of FA provided by the Fund
(matching funds are not required for TA grants). Matching funds must be
at least comparable in form and value to the FA provided by the Fund
(for example, if an applicant seeks a FA grant from the Fund, the
applicant must obtain matching funds through grant(s) from non-Federal
sources that are at least equal to the amount requested from the Fund).
Funds used by an applicant as matching funds for a prior award under
the CDFI Program or under another Federal grant or award program cannot
be used to satisfy the matching funds requirement of this NOFA. If an
applicant seeks to use as matching funds monies received from an
organization that was a prior awardee under the CDFI Program, the Fund
will deem such funds to be Federal funds, unless the funding entity
establishes to the reasonable satisfaction of the Fund, that such funds
do not consist, in whole or in part, of CDFI Program funds or other
Federal funds. An applicant using matching funds from an affiliated
entity must be able to demonstrate that the affiliated entity received
funds in the same amount and in the same form from an eligible, non-
affiliated source within the eligible matching funds window, described
below.
2. Matching Funds Requirements Per Category: Due to funding
constraints and the desire to quickly deploy Fund dollars, the Fund
will not consider for FA funding any applicant that does not
demonstrate any matching funds committed or in-hand as of the
application deadline under this NOFA. Specifically, FA applicants must
meet the following matching funds requirements:
(a) Category I/SECA applicants: The Fund expects Category I/SECA
applicants to demonstrate no less than 30 percent of matching funds
requested as in-hand or firmly committed as of the application
deadline. Matching funds in-hand (received) or firm commitments for
matching funds made, on or after January 1, 2002, and on or before
April 30, 2005, will be considered when determining matching funds
eligibility. The Fund reserves the right to rescind all or a portion of
a FA award and re-allocate the rescinded award amount to other
qualified applicant(s), if an applicant fails to obtain in-hand the
required matching funds by April 30, 2005 (with required documentation
of such receipt received by the Fund not later than May 13, 2005), or
to grant an extension of such matching funds deadline for specific
applicants selected to receive FA, if the Fund deems it appropriate.
For any applicant that demonstrates that it has less than 100 percent
of matching funds in-hand or firmly committed as of the application
deadline, the Fund will evaluate the applicant's ability to raise the
remaining matching funds by April 30, 2005.
(b) Category II/Core and Category III/FLOW applicants: The Fund
expects that FA award amounts will not exceed 100 percent of matching
funds demonstrated in the application as in-hand or firmly committed as
of the application deadline. Matching funds in-hand (received) or firm
commitments for matching funds made, on or after January 1, 2002, and
on or before April 30, 2005, will be considered when determining
matching funds eligibility. The Fund reserves the right to rescind all
or a portion of a FA award and re-allocate the rescinded award amount
to other qualified applicant(s), if an applicant fails to obtain in-
hand the required matching funds by April 30, 2005 (with required
documentation of such receipt received by the Fund not later than May
13, 2005), or to grant an extension of such matching funds deadline for
specific applicants selected
[[Page 9023]]
to receive FA, if the Fund deems it appropriate.
3. For purposes of this NOFA, ``matching funds in-hand'' means that
the applicant has actually received the matching funds and has
documentation (such as a copy of a check) to evidence such receipt;
``firm commitment for matching funds'' means that the applicant has
entered into or received a legally binding commitment from the matching
funds source that the matching funds have been committed to be
disbursed to the applicant and the applicant has documentation (such as
a copy of a loan agreement, promissory note or grant agreement) to
evidence such firm commitment.
4. Please note that the revised interim rule allows an insured
credit union to use retained earnings to serve as matching funds for a
FA grant in an amount equal to: (i) The increase in retained earnings
that have occurred over the applicant's most recent fiscal year; (ii)
the annual average of such increases that have occurred over the
applicant's three most recent fiscal years; or (iii) the entire
retained earnings that have been accumulated since the inception of the
applicant or such other financial measure as may be specified by the
Fund. For purposes of this NOFA, if option (iii) is used, the applicant
must increase its member and/ or non-member shares or total loans
outstanding by an amount that is equal to the amount of retained
earnings that is committed as matching funds. This amount must be
raised by April 30, 2005.
IV. Application and Submission Information
A. Address to Request Application Package: Applicants may submit
applications under this NOFA either electronically or in paper form.
Shortly following the publication of this NOFA, the Fund will make
available the FY 2004 electronic application on its Web site at http://www.cdfifund.gov.
Paper applications may be obtained through the Fund
in the manner described in Section IV.C.2, below.
B. Content Application Submission: Detailed application content
requirements are found in the application related to this NOFA.
Applicants must submit all materials described in and required by the
application. Electronic applications must be submitted solely by using
the format made available at the Fund's Web site. Additional
information, including instructions relating to the submission of
signature forms and supporting information, is set forth in further
detail in the electronic application. Please note that, pursuant to OMB
guidance (68 FR 38402), each applicant must provide, as part of its
application submission, a Dun and Bradstreet Data Universal Numbering
System (DUNS) number. In addition, each application must include a
valid and current Employer Identification Number, issued by the
Internal Revenue Service. Incomplete applications will be rejected and
returned to the sender.
C. Form of Application Submission: Applicants may submit
applications under this NOFA either electronically or in paper form. In
order to expedite application review, the Fund expects applicants to
submit applications electronically (via an Internet-based application)
in accordance with the instructions provided on the Fund's Web site.
Submission of an electronic application will facilitate the processing
and review of applications and the selection of awardees. Applications
sent by facsimile or by e-mail will not be accepted.
1. Electronic Applications: Electronic applications must be
submitted solely by using the format made available at the Fund's Web
site. Applicants need access to Internet Explorer 5.5 or higher or
Netscape Navigator 6.0 or higher and at least a 56Kbps Internet
connection in order to meet the electronic application submission
requirements. Additional information, including instructions relating
to the submission of signature forms and supporting information, is set
forth in further detail in the electronic application.
2. Paper Applications: If an applicant is unable to submit an
electronic application, it must submit to the Fund a request for a
paper application and the request must be received by the Fund by March
31, 2004. The request must contain the applicant's name; the name and
phone number of a contact person; a mailing address (a street address
for courier or overnight service deliveries); and an explanation of why
the applicant cannot complete the electronic application. The request
for a paper application should be directed to the Fund's Program
Operations Manager and must be sent by e-mail to
paper_request@cdfi.treas.gov or by facsimile to (202) 622-6453.
D. Application Submission Dates and Times: 1. Application
Deadlines: The deadline for receipt of applications is 5 p.m. ET on
April 28, 2004. Applications and other required documents and other
attachments received after these dates and times will be rejected and
returned to the sender. Please note that the document submission
deadlines in this NOFA and/or the funding application are strictly
enforced. The Fund will not grant exceptions or waivers for late
delivery of documents including, but not limited to, late delivery that
is caused by third parties such as the U.S. mail, couriers or overnight
delivery services. [FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][NOTICES][NOTICE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/SUBJECT]
a. Paper applications must be received in their entirety by this
time and date, including an original signature page, a letter or other
documentation from the Internal Revenue Service confirming the
applicant's Employer Identification Number (EIN), and all other
required paper attachments.
b. Electronic applications must be received by this date and time.
In addition, applicants that submit electronic applications must
separately (by mail or other courier/delivery service) submit an
original signature page, a letter or other documentation from the
Internal Revenue Service confirming the applicant's Employer
Identification Number (EIN), and all other required paper attachments
not later than 5 p.m. ET on May 5, 2004. See application instructions,
provided in the electronic application, for further detail.
Applications and other required documents and other attachments
received after these dates and times will be rejected and returned to
the sender.
E. Intergovernmental Review: Not applicable.
F. Funding Restrictions: For allowable uses of FA award proceeds,
please see the interim rule, 12 CFR 1805.301. Please see Section I.A,
above, for the Programmatic Priorities of this NOFA.
G. Other Submission Requirements:
1. Addresses: Paper applications must be sent to: CDFI Fund Grants
Management and Compliance Manager, FA Component, Bureau of Public Debt,
200 Third Street, Room 10, Parkersburg, WV 26101. The telephone number
to be used in conjunction with overnight delivery or mailings to this
address is (304) 480-5450. Applications and attachments will not be
accepted at the Fund's offices in Washington, DC. Applications and
attachments received in the Fund's offices will be rejected and
returned to the sender. Electronic applications must be submitted
solely by using the Fund's website and must be sent in accordance with
the submission instructions provided in the electronic application
form.
V. Application Review Information
A. Criteria: The Fund will evaluate each application, assigning
points and numeric scores with respect to the following three criteria
categories:
1. Market Need and Community Development Performance (comprising 50
percent of possible points), including an evaluation of:
[[Page 9024]]
(a) Market need: the applicant's understanding of its market
context and its current and prospective customers, the extent of
economic distress within the designated Investment Area(s) (including
Hot Zones) or the extent of need within the designated Targeted
Population(s), the extent of need for Equity Investments, loans,
Development Services, and Financial Services within the designated
Target Market, and the extent of demand within the Target Market for
the applicant's products and services;
(b) Programmatic Priorities: the extent to which the applicant
demonstrates that it will target its activities to the Fund's
Programmatic Priorities. Pursuant to the ranking of Programmatic
Priorities, highly qualified applicants, meaning those with passing
scores in the other sections of the application, that propose to
conduct Priority 1 activities, will receive higher scores in the Market
Need and Community Development Performance section than comparable
applicants that propose to conduct Priority 2 activities; those that
propose to conduct Priority 2 activities will receive higher scores
than those that propose to conduct Priority 3 activities; and those
that propose to conduct Priority 3 activities will receive higher
scores than those that propose to conduct Priority 4 activities;
(c) Community development performance/impact: (i) The applicant's
track record and the likelihood of its projections for community
development impact, including the extent to which the applicant will
concentrate its activities on serving its Target Market, and the extent
to which the activities proposed in the Comprehensive Business Plan
will expand economic opportunities or promote community development
within the designated Target Market (including achieving the Fund's
Programmatic Priorities); (ii) product design and strategy, including
an assessment of the applicant's products and services, marketing and
outreach efforts, and delivery strategy (including the applicant's
track record in community development and serving the target market);
(iii) the extent to which the applicant will provide products that meet
key community development needs (such as low-down-payment mortgage
products for Low-Income homebuyers and provision of financial services
to individuals previously lacking such services); (iv) likely
effectiveness of the proposed use of Fund dollars; and (v) the degree
to which the applicant's strategy is integral to Federal community
development initiatives (for example, Empowerment Zones) particularly
targeted to benefit Low-Income people or underserved communities.
(d) Additional considerations:
(i) Category III/FLOW applicants will be evaluated on their plans
to leverage greater private sector resources directly or indirectly in
support of their lending and investing activities (such as through
funding a loan loss reserve or credit enhancement), or into their
Target Markets, or develop and effectively provide innovative financial
products and services that address the capital needs of markets that
are particularly underserved by traditional financial services
institutions.
(ii) In the case of an applicant that has previously received
funding from the Fund through the BEA Program, CDFI Program, the NACD
Program or the NACTA Program, the Fund will consider the extent and
effectiveness to which the applicant has used previous assistance from
the Fund and the community development impact that will be created with
new Fund assistance over and above benefits created by previous Fund
assistance.
(iii) The Fund will take into consideration the Community
Reinvestment Act (CRA) rating of any applicant that is an Insured
Depository Institution or Depository Institution Holding Company. The
Fund will not approve a Financial Assistance award to any applicant
that does not currently have at least a ``Satisfactory'' CRA rating.
2. Management and Underwriting (comprising 25 percent of possible
points), including an evaluation of:
(a) Portfolio quality: the applicant's underwriting and portfolio
quality;
(b) Management controls: including risk mitigation strategies; and
(c) Management team: the capacity, skills and experience of the
applicant's management team as appropriate to deliver the proposed
products and services and manage compliance with the Fund's reporting
requirements.
3. Financial Health and Viability (comprising 25 percent of
possible points), including an evaluation of:
(a) Financial track record: The applicant's liquidity and other
elements of financial strength, including earnings, capital adequacy,
and deployment of resources;
(b) Financial projections: the applicant's projected financial
health, including its ability to raise operating support from sources
other than the Fund and its capitalization strategy; and
(c) Safety and Soundness: The Fund will not approve FA to any
Insured Credit Union (other than a State-insured credit union) or
Insured Depository Institution applicant that has a CAMEL rating that
is higher than a ``3'' or for which its Appropriate Federal Banking
Agency indicates it has safety and soundness concerns, unless the
Appropriate Federal Banking Agency asserts, in writing, that (i) an
upgrade to a CAMEL 3 rating or better (or other improvement in status)
is imminent and (ii) such upgrade is expected to occur not later than
September 30, 2004 or within such other time frame deemed acceptable by
the Fund.
B. Review and Selection Process: All applications will be reviewed
for eligibility and completeness. To be complete, the application must
contain, at a minimum, all information described as required in the
application form. An incomplete application will be rejected as
incomplete and returned to the sender.
If determined to be eligible and complete, the Fund will conduct
the substantive review of each application in accordance with the
criteria and procedures described in the CDFI Program regulations, this
NOFA and the application. First, the Fund will determine whether the
applicant has a need for capital (for Financial Products, reserves,
Development Services, or Financial Services), based on the applicant's
projections of capital available and activities projected. Applicants
not projecting a need for capital will not be considered for FA. Next,
the Fund will determine whether the applicant has matching funds in-
hand and/or firmly committed. If there are no matching funds documented
as in-hand or firmly committed, the applicant will not be considered
for FA.
In the case of an applicant that has previously received funding
from the Fund through any Fund program, the Fund will consider and will
deduct points for: (i) The applicant's noncompliance with any active
award or award that terminated in calendar year 2003, in meeting its
performance goals, financial soundness covenants (if applicable),
reporting deadlines and other requirements set forth in the assistance
or award agreement(s) with the Fund during the applicant's two complete
fiscal years prior to the application deadline of this NOFA (generally
FY 2002 and 2003); and (ii) the applicant's failure to make timely loan
payments to the Fund during the applicant's two complete fiscal years
prior to the application deadline of this NOFA. Additionally, the Fund
may take into account performance on any prior assistance agreement as
part of the overall assessment of the applicant's ability to carry out
its Comprehensive Business Plan. All outstanding reports or compliance
questions should be
[[Page 9025]]
directed to the Grants Management and Compliance Manager by e-mail at
gmc@cdfi.treas.gov; by telephone at (202) 622-8226; by facsimile at
(202) 622-6453; or by mail to CDFI Fund, 601 13th Street, NW., Suite
200 South, Washington, DC 20005. The Fund will respond to reporting or
compliance questions between the hours of 9 a.m. and 5 p.m. ET,
starting the date of the publication of this NOFA through April 26,
2004 (2 days before the application deadline). The Fund will not
respond to reporting or compliance phone calls or e-mail inquiries that
are received after 5 p.m. on April 26, 2004 until after the funding
application deadline of April 28, 2004.
The Fund shall consider the institutional and geographic diversity
of applicants in making its funding determinations.
Fund reviewers will evaluate and score each application and make
recommendations for funding to the Fund's selecting official. As part
of the substantive review process, applicants may receive a telephone
interview or an on-site visit by Fund reviewers for the purpose of
obtaining clarifying or confirming application information. During the
review process, the applicant may be required to submit additional
information about its application in order to assist the Fund in its
final evaluation process. Such requests must be responded to within the
time parameters set by the Fund.
The Fund's selecting official will make a final funding
determination based on the applicant's file, reviewer scores and
recommendations, and the amount of funds available. In the case of
Insured CDFIs, the selecting official will take into consideration the
views of the Appropriate Federal Banking Agencies; in the case of
State-insured credit unions, the Fund may consult with the appropriate
State banking agencies (or comparable entity). Each applicant will be
informed of the Fund's award decision either through a Notice of Award
if selected for an award (see Notice of Award section, below) or a
declination letter, if not selected for an award, which may be for
reasons of application incompleteness, ineligibility or substantive
issues. All applicants that are not selected for awards based on
substantive issues will be given the opportunity to obtain feedback on
the strengths and weaknesses of their applications. This feedback will
be provided in a format and within a timeframe to be determined by the
Fund, based on available resources.
The Fund reserves the right to change its eligibility and
evaluation criteria and procedures, if the Fund deems it appropriate;
if said changes materially affect the Fund's award decisions, the Fund
will provide information regarding the changes through the Fund's
website.
VI. Award Administration Information
A. Notice of Award: The Fund will signify its selection of an
applicant as an awardee by delivering a signed Notice of Award to the
applicant. The Notice of Award will contain the general terms and
conditions underlying the Fund's provision of assistance including, but
not limited to, the requirement that an awardee and the Fund enter into
an Assistance Agreement. The applicant must execute the Notice of Award
and return it to the Fund. By executing a Notice of Award, the awardee
agrees that, if prior to entering into an Assistance Agreement with the
Fund, information comes to the attention of the Fund that either
adversely affects the awardee's eligibility for an award, or adversely
affects the Fund's evaluation of the awardee's application, or
indicates fraud or mismanagement on the part of the awardee, the Fund
may, in its discretion and without advance notice to the awardee,
terminate the Notice of Award or take such other actions as it deems
appropriate. Moreover, by executing a Notice of Award, an awardee
agrees that, if prior to entering into an Assistance Agreement with the
Fund, the Fund determines that the awardee is in default of any
previous Assistance Agreement entered into with the Fund, the Fund may,
in its discretion and without advance notice to the awardee, either
terminate the Notice of Award or take such other actions as it deems
appropriate. The Fund reserves the right, in its sole discretion, to
rescind its award if the awardee fails to return the Notice of Award,
signed by the authorized representative of the awardee, along with any
other requested documentation, within the deadline set by the Fund.
B. Assistance Agreement: Each applicant that is selected to receive
an award under this NOFA must enter into an Assistance Agreement with
the Fund prior to disbursement of award proceeds. The Assistance
Agreement will set forth certain required terms and conditions of the
award, which will include, but not be limited to, (i) the amount of the
award; (ii) the type of award; (iii) the approved uses of the award;
(iv) the approved Target Market to which the funded activity must be
targeted; (v) performance goals and measures; and (vi) reporting
requirements for all awardees. Assistance Agreements under this NOFA
will generally have three-year performance periods.
The Fund reserves the right, in its sole discretion, to rescind its
award if the awardee fails to return the Assistance Agreement, signed
by the authorized representative of the awardee, and/or provide the
Fund with any other requested documentation, within the deadlines set
by the Fund.
In addition to entering into an Assistance Agreement, each awardee
that receives an award either (i) in the form of a loan, Equity
Investment, credit union shares/deposits, or secondary capital, in any
amount, or (ii) a FA grant in an amount greater than $500,000, must
furnish to the Fund an opinion from its legal counsel, the content of
which will be specified in the Assistance Agreement, to include, among
other matters, an opinion that the awardee: (A) Is duly formed and in
good standing in the jurisdiction in which it was formed and/or
operates; (B) has the authority to enter into the Assistance Agreement
and undertake the activities that are specified therein; and (C) has no
pending or threatened litigation that would materially affect its
ability to enter into and carry out the activities specified in the
Assistance Agreement. All other awardees must provide the Fund with a
good standing certificate (or equivalent documentation) from their
state (or jurisdiction) of incorporation.
C. Administrative and Policy Requirements: (a) Performance Rating:
PLUM: In order to better manage its portfolio of awards, the Fund is
developing a performance rating system, called PLUM, which will rate
each CDFI according to its overall financial strength and potential for
creating community development impact. Initially, PLUM will serve as
the Fund's internal portfolio risk rating tool. PLUM will cover four
areas: Performance effectiveness/community development impact;
Leverage, liquidity and solvency; Underwriting (including portfolio
quality); and Management. The Fund currently is conducting the analyses
needed to identify appropriate peer groups and target ranges for each
indicator. In order that additional data can be collected for the
Fund's analyses, indicators within the above four areas have been
incorporated into the FY 2004 Financial Assistance Component
application. Each CDFI will have access to its own PLUM rating.
(b) Fees: The Fund reserves the right, in accordance with
applicable Federal law and if authorized, to charge award reservation
and/or compliance monitoring fees to all entities receiving CDFI
Program awards. Prior to imposing
[[Page 9026]]
any such fee, the Fund will publish additional information concerning
the nature and amount of the fee.
D. Reporting: (a) Reporting Requirements: The Fund will collect
information, on at least an annual basis, from all CDFI Program
awardees including, but not limited to, an Annual Report that comprises
the following components: (i) Financial Report; (ii) Performance Goals
Report/Annual Survey; (iii) Financial Status Report (for TA awardees);
(iv) Uses of Financial Assistance and Matching Funds Report; and (v)
Explanation of Noncompliance (as applicable). Awardees are responsible
for the timely and complete submission of the Annual Report, even if
all or a portion of the documents actually are completed by another
entity or signatory to the Assistance Agreement. If such other entities
or signatories are required to provide Annual Surveys or Financial
Reports, or other documentation that the Fund may require, the awardee
is responsible for ensuring that the information is submitted timely
and complete. The Fund reserves the right to contact such additional
signatories to the Assistance Agreement and require that additional
information and documentation be provided. The Fund will use such
information to monitor each awardee's compliance with the requirements
set forth in the Assistance Agreement and to assess the impact of the
CDFI Program. The Performance Goals Report/Annual Survey must be
submitted through the Fund's new web-based data collection system, the
Community Investment Impact System (CIIS). All other components of the
Annual Report may be submitted to the Fund in paper form. CIIS is
currently under development and is expected to be operational in April
2004. The Fund reserves the right, in its sole discretion, to modify
these reporting requirements if it determines it to be appropriate and
necessary; however, such reporting requirements will be modified only
after notice to awardees.
(b) Accounting: The Fund will require each awardee that receives FA
and TA under this NOFA to account for and track the use of said FA and
TA awards. This means that for every dollar of FA and TA received from
the Fund, the awardee will be required to inform the Fund of its uses.
This may require awardees to establish separate administrative and
accounting controls, subject to the applicable OMB Circulars. OMB
Circular A-110 (Uniform Administrative Requirements for Grants and
Agreements with Institutions of Higher Education, Hospitals and Other
Non-Profit Organizations) states that, as applicable, recipients of
Federal funds ``must be able to account for the receipt, obligation,
and expenditure of funds.'' Further, OMB Circular A-110 states that
``Recipients shall maintain advances of Federal funds in interest
bearing accounts unless (1), (2), or (3) apply:
(1) The recipient receives less than $120,000 in Federal awards per
year;
(2) The best reasonably available interest bearing account would
not be expected to earn interest in excess of $250 per year on Federal
cash advances; or
(3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources.'' The Fund will provide guidance to awardees
outlining the format and content of the information to be provided on
an annual basis, outlining and describing how the funds were used.
VII. Agency Contacts
The Fund will respond to questions and provide support concerning
this NOFA and the funding application between the hours of 9 a.m. and 5
p.m. ET, starting the date of the publication of this NOFA through
April 26, 2004 (2 days before the application deadline). The Fund will
not respond to questions or provide support concerning the application
that are received after 5 p.m. ET on April 26, 2004, until after the
funding application deadline of April 28, 2004.
A. Information Technology Support: Technical support can be
obtained by calling (202) 622-2455 or by e-mail at
ithelpdesk@cdfi.treas.gov. People who have visual or mobility
impairments that prevent them from creating Hot Zone or Investment Area
maps using the Fund's website should call (202) 622-2455 for
assistance. These are not toll free numbers.
B. Programmatic Support: If you have any questions about the
programmatic requirements of this NOFA, contact the Fund's Program
Operations Manager by e-mail at cdfihelp@cdfi.treas.gov, by telephone
at 202/622-6355, by facsimile at (202) 622-7754, or by mail at CDFI
Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 20005.
These are not toll-free numbers.
C. Administrative Support: If you have any questions regarding the
administrative requirements of this NOFA, contact the Fund's Grants
Management and Compliance Manager by e-mail at cdfihelp@cdfi.treas.gov,
by telephone at (202) 622-8226, by facsimile at (202) 622-6453, or by
mail at CDFI Fund, 601 13th Street, NW., Suite 200 South, Washington,
DC 20005. These are not toll free numbers.
VIII. Information Sessions and Outreach
In connection with the Fiscal Year 2004 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 Fund's programs. 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 or call the
Fund at (202) 622-9046.
Authority: 12 U.S.C. 4703, 4703 note, 4704, 4706, 4707, 4717; 12
CFR part 1805.
Dated: February 23, 2004.
Tony T. Brown,
Director, Community Development Financial Institutions Fund.
[FR Doc. 04-4301 Filed 2-25-04; 8:45 am]
BILLING CODE 4810-70-U