[Federal Register Volume 63, Number 206 (Monday, October 26, 1998)]
[Notices]
[Pages 57224-57226]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28515]
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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 (CDFI) Program--
Intermediary Component
AGENCY: Community Development Financial Institutions Fund, Department
of the Treasury.
ACTION: Notice of Funds Availability (NOFA) inviting applications.
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SUMMARY: 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'') to
select and provide assistance to eligible applicants under the
Community Development Financial Institutions (``CDFI'') Program. The
interim rule (12 CFR part 1805), which was published in the Federal
Register on April 4, 1997 (62 FR 16444), provides guidance on the
contents of application materials and program requirements. This NOFA
is in connection with the third competitive round of the Intermediary
Component of the CDFI Program. This Intermediary Component will provide
financial assistance to CDFIs that provide financing primarily to other
CDFIs and/or to support the formation of CDFIs. Subject to the
availability of funds, the Fund currently anticipates making awards of
up to $7.5 million in appropriated funds pursuant to this NOFA. 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. Also being
published elsewhere in this issue of the Federal Register is a separate
NOFA in connection with the Core Component of the CDFI Program, with
respect to which the Fund intends to make available up to $50 million
in appropriated funds.
DATES: Applications may be submitted at any time after October 26,
1998. The deadline for receipt of an application is 6:00 p.m. EST on
January 19, 1999. Applications received in the offices of the Fund
after that date and time will be rejected and returned to the sender.
Applications sent to the Fund electronically or by facsimile will not
be accepted.
The Fund anticipates making available up to $7.5 million in
appropriated funds under this NOFA. The anticipated maximum aggregate
award per applicant under this NOFA is $1.5 million. However, the Fund,
in its sole discretion, reserves the right to award amounts in excess
of $1.5 million for an applicant(s) if it deems it appropriate.
ADDRESSES: Applications shall be sent to: Awards Manager, Community
Development Financial Institutions Fund, U.S. Department of the
Treasury, 601 13th Street NW., Suite 200 South, Washington, DC 20005.
FOR FURTHER INFORMATION CONTACT: If you have any questions about the
program requirements for this program, contact the CDFI Program
Manager. Should you wish to request an application package or have any
questions regarding application procedures, contact the CDFI Awards
Manager. They may be reached by phone at (202) 622-8662, by facsimile
on (202) 622-7754 or by mail at CDFI Fund, 601 13th Street, NW., Suite
200 South, Washington, DC 20005. Allow at least one to two weeks for
the receipt of the application package. Applications and other
information regarding the Fund and its programs may be downloaded from
the Fund's website at http://www.treas.gov/cdfi.
SUPPLEMENTARY INFORMATION:
I. Background
Credit and investment capital are essential ingredients for
creating and retaining jobs, developing affordable housing, starting or
expanding businesses, revitalizing neighborhoods, and empowering
people. As a key urban and rural policy initiative, the CDFI Program is
facilitating the creation of a national network of financial
institutions that are specifically dedicated to community development.
This strategy will build strong institutions that make loans and
investments and provide services to economically distressed investment
areas and disadvantaged targeted populations. This NOFA is in
connection with the Intermediary Component of the CDFI Program.
Elsewhere in this issue of the Federal Register, the Fund is
publishing a NOFA for financial and technical assistance to CDFIs
pursuant to the direct funding approach of the Core Component of the
CDFI Program. The Fund anticipates that it will devote the great bulk
of the financial assistance available for the CDFI Program to the Core
Component. In the separate NOFA for the Core Component, the Fund is
making available up to $50 million in appropriated funds.
The Fund also recognizes that to address the diverse needs and take
full advantage of the enormous potential of the growing CDFI industry,
it is important that the Fund be on the cutting edge of innovation by
expanding the tools it utilizes to assist CDFIs. This NOFA in
connection with the Intermediary Component of the CDFI Program is one
part of a broader effort to develop and make available such new tools.
Under the Intermediary Component NOFA, the Fund has an anticipated
maximum award for $1.5 million per applicant. However, the Fund, in its
sole discretion, reserves the right to award amounts in excess of the
anticipated maximum award amount if the Fund deems it appropriate.
[[Page 57225]]
The Fund recognizes that there are in existence certain
intermediary CDFIs, and that others may be created over time, that
focus their financing activities primarily on financing other CDFIs.
Such institutions may have knowledge and capacity to develop and
implement a specialized niche or niches in their financing of CDFIs
and/or CDFIs in formation. The Fund believes that providing financial
assistance to such intermediaries can be an effective way to enhance
its support of the CDFI industry. To illustrate the concept of an
intermediary CDFI with a few examples, an intermediary may have a
specialized niche or niches focusing on financing a specific type or
types of CDFIs, providing small amounts of capital per CDFI, financing
CDFIs with specialized risk levels, or financing institutions seeking
to become CDFIs. By providing financial assistance to specialized
intermediaries, the Fund believes it can leverage the expertise of such
intermediaries and strengthen the Fund's capacity to support the
development and enhancement of the CDFI industry. This NOFA invites
applications from CDFIs, and organizations seeking to become CDFIs,
that are or plan to become a specialized CDFI intermediary, focusing on
providing loans to, or investments in, other CDFIs and/or to support
the formation of CDFIs. This NOFA is not intended and should not be
construed to allow an applicant to file a joint application on behalf
of a group of other CDFIs, but rather to provide financial assistance
to intermediaries that have criteria for financing, in arms-length
transactions, other CDFIs and/or to support the formation of CDFIs.
This NOFA implements the third round of the Intermediary Component.
Many CDFIs will be facing the decision of whether they should devote
the substantial time and effort necessary to prepare an application,
due by January 21, 1999, in response to the Core Component NOFA
published elsewhere in this issue of the Federal Register. Given what
is expected to be the highly competitive nature of the Core Component
round, many CDFIs may decide not to apply for the Core Component, but
instead to concentrate on seeking assistance from a CDFI intermediary.
II. Eligibility
An applicant for assistance pursuant to this NOFA must meet the
eligibility requirements found in Sec. 1805.200. At the time an entity
submits an application, the entity must be duly organized and validly
existing under the laws of the jurisdiction in which it is incorporated
or otherwise established. In addition, under Sec. 1805.200(a)(3), this
NOFA is limited to applicants that satisfy the following requirements:
(1) The applicant's financings (loans and/or development
investments) must primarily focus on financing other CDFIs and/or
supporting the formation of CDFIs; or
(2) If (a) the applicant is not a CDFI; or
(b) If the applicant's financings do not primarily focus on
financing and/or supporting the formation of CDFIs at the time of
application, the application shall include a realistic plan for the
applicant to meet both criteria (a) and (b) within one year of the date
on which the Fund approves the applicant for financial assistance
(which period may be extended at the sole discretion of the Fund). In
no event will the Fund disburse assistance to the applicant until the
applicant can be certified as a CDFI and demonstrates that its
financings primarily focus on other CDFIs and/or the formation of
CDFIs.
III. Types of Assistance
An applicant may submit an application for financial assistance in
the form of an equity investment, loan, or grant (or a combination of
these financial assistance instruments). Applicants for financial
assistance shall indicate the dollar amount, form, terms, and
conditions of assistance requested. The Fund will not accept
applications for technical assistance under this NOFA.
Since an intermediary that is selected under this NOFA must be a
CDFI when funded, its predominant business activity must, per
Sec. 1805.701(b)(4), be the provision of loans and/or development
investments. Thus, even if an intermediary applicant receives a grant
from the Fund, the Fund will normally expect that the intermediary will
use such grant to enhance its ability to make loans and/or development
investments in CDFIs or to support the formation of CDFIs. However, the
Fund will consider requests by an intermediary applicant to utilize
Fund assistance to enhance the ability of the intermediary to make
grants to CDFIs or to support the formation of CDFIs, as long as the
intermediary applicant demonstrates to the satisfaction of the Fund
that using Fund assistance in this manner will further the purposes of
the Act, and as long as the intermediary's predominant business
activity will remain the provision of loans and/or development
investments.
IV. Application Packet
Except as described hereafter, an applicant shall submit the
materials described in Sec. 1805.701 and the application packet.
If an applicant is currently certified as a CDFI, it may, at its
option, submit a copy of the letter of certification and the
certification of material changes form, a copy of which is contained in
the application package, in lieu of the information requested in Part
III.B., 1 through 8, of the application packet. However, an applicant
should include in its application information that it believes is
relevant to the substantive review of the application specified in
Sec. 1805.802(b) and this NOFA.
Since the target markets served by an applicant under this NOFA
will depend on the target markets served by CDFIs funded by the
applicant, the applicant need not fill out Part III.B.3, C. Map of
Investment Area(s), 4. Studies or Analyses of Unmet Needs, or 9. Target
Market Designation, or 10. Investment Area Designation Worksheet.
Instead, the applicant should describe its target markets, which
description may include target markets that are regional or national in
scope. The application should include an analysis of target markets
served by CDFIs and/or CDFIs in formation which the applicant currently
finances, and what changes in such target markets, if any, may be
expected if the applicant receives financial assistance from the Fund.
If applicable, the applicant should provide an all-inclusive list of
CDFIs or CDFIs in formation that it has financed, and the amount and
form of financing, over at least the last three years.
V. Matching Funds
Applicants responding to this NOFA must obtain matching funds from
sources other than the Federal Government on the basis of not less than
one dollar for each dollar of assistance provided by the Fund. Such
matching funds shall be at least comparable in form and value to the
assistance provided by the Fund. Non-Federal funds obtained or legally
committed on or after January 1, 1997 may be considered when
determining matching funds availability. Applicants selected to receive
assistance under this NOFA must have firm commitments for the matching
funds required under Sec. 1805.600 by no later than August 31, 1999.
The Fund may recapture and reprogram funds if an applicant fails to
raise the required match by such date. The Fund reserves the right to
extend such matching funds deadline for specific applicants selected
for
[[Page 57226]]
assistance if the Fund deems it appropriate.
VI. Evaluation Factors
Applications will be evaluated on a competitive basis in accordance
with the criteria described in 12 CFR 1805.802(b) and this NOFA. Also,
applications will be reviewed for eligibility and completeness purposes
under 12 CFR 1805.802(a) and this NOFA. The Fund reserves the right to
conduct eligibility and completeness reviews under Sec. 1805.802(a) and
this NOFA concurrently with its substantive review under
Sec. 1805.802(b) and this NOFA.
In conducting its substantive review, the Fund will initially
evaluate applications using a 300 maximum point scale as follows:
(a) Financial Strength and Organizational Capacity (12 CFR
1805.802(b)(1)), 150 points maximum;
(1) The applicant's track record, financial strength and current
operations (including its general financial operations and lending/
investment operations), 25 points for established groups, 5 points for
start-ups;
(2) The capacity, skills, and experience of the management team and
other key personnel (overall organizational structure, lending/
investing activities, community development experience), 75 points for
established groups, 95 points for start-ups;
(3) The quality of the comprehensive business plan (identification
of community needs, market analysis, strategies for addressing needs
and demand, implementation strategy including any community
partnerships, and identifying risks and assumptions), 50 points;
(b) External Resources 12 CFR 1805.802(b)(2), 50 points maximum;
and
(c) Community Impact and Community Partnerships (if applicable) 12
CFR 1805.802(b)(3) and (4), 100 points maximum.
As shown above, the Fund will utilize two different 150 point
scales for the Financial Strength and Organizational Capacity criteria
depending on whether an applicant is deemed by the Fund to be a start-
up organization or an established organization. The Fund defines a
start-up organization as an entity that has been in operation for less
than two years. The Fund will find an organization to be a start-up if
it began incurring operating expenses after October 26, 1996, based on
a review of submitted income and expense statements and/or other
statements submitted by an applicant as part of its application. In
evaluating applications of start-up organizations against the Financial
Strength and Organizational Capacity criteria, the Fund will place
greater emphasis on the experience, strength and background of an
applicant's management team and key personnel than on the breadth and
depth of its financial resources and trends in operating performance.
Once the initial evaluation is completed, the Fund will determine
which applications will receive further consideration for funding based
on the application scores (standardized if deemed appropriate), the
recommendations of the individuals performing the initial reviews and
the amount of funds available. Those applicants selected for further
review or a second stage evaluation may receive an on-site interview
conducted by Fund staff in accordance with 12 CFR 1805.800 for purposes
of obtaining clarifying or confirming information. A final review panel
will consider the results of the initial and second stage evaluations
and the geographic and institutional diversity of the target markets of
those applicants being considered for funding under 12 CFR
1805.802(b)(5). The final review panel will make recommendations to the
Fund's selecting official.
While previous awardees are eligible to apply under this NOFA, such
applicants should be aware that success in a previous round should not
be considered indicative of the likelihood of success under this NOFA.
At the same time, organizations will not be penalized for having
received awards in a previous round or rounds, except to the extent
provided by 12 CFR 1805.502(a) which prohibits the Fund, except in
certain circumstances, from providing more than $5 million in
assistance to any organization and its subsidiaries and affiliates
during any three-year period.
The anticipated maximum award per applicant under this NOFA is $1.5
million. However, the Fund, in its sole discretion, reserves the right
to make individual award amounts in excess of $1.5 million if it deems
it appropriate.
VII. Workshops
The Fund expects to host workshops in November and December of this
year to disseminate information to organizations interested in applying
for assistance under this NOFA. If you wish to be on a mailing list to
receive information about such workshops, please fax your request to
the Fund.
Authority: 12 U.S.C. 4703, 4703 note, 4704, 4706, 4707, and
4717; 12 CFR part 1805.700.
Dated: October 20, 1998.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development
Financial Institutions Fund.
[FR Doc. 98-28515 Filed 10-23-98; 8:45 am]
BILLING CODE 4810-70-P
