[Federal Register Volume 63, Number 206 (Monday, October 26, 1998)]
[Notices]
[Pages 57222-57224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28516]
[[Page 57221]]
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Part IV
Department of the Treasury
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Community Development Financial Institutions Fund
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Notice of Funds Availability (NOFA) Inviting Applications for the
Community Development Financial Institutions (CDFI) Program--Core
Component and Intermediary Component; Notices
Federal Register / Vol. 63, No. 206 / Monday, October 26, 1998 /
Notices
[[Page 57222]]
DEPARTMENT OF THE TREASURY
Community Development Financial Institutions Fund
Notice of Funds Availability (NOFA) Inviting Applications for the
Community Development Financial Institutions Program--Core 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'') of the
U.S. Department of the Treasury to select and provide financial and
technical 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 the
necessary application materials and program requirements. Subject to
funding availability, the Fund intends to award up to $50 million in
appropriated funds under this NOFA and expects to issue approximately
50 to 65 awards. The Fund reserves the right to award in excess of $50
million in appropriated funds under this NOFA provided that the funds
are available and the Fund deems it appropriate. 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.
This NOFA is in connection with the Core Component of the CDFI
Program. The Core Component provides direct assistance to CDFIs that
serve their target markets through loans, investments and other
activities. (These primary activities do not include the financing of
other CDFIs. Elsewhere in this issue of the Federal Register, the Fund
is publishing a separate NOFA for the third round of the Intermediary
Component of the CDFI Program. The Intermediary Component provides
financial assistance to CDFIs that provide financing primarily to other
CDFIs and/or to support the formation of CDFIs.)
DATES: Applications may be submitted at any time following October 26,
1998. The deadline for receipt of an application is 6 p.m. EST on
January 21, 1999. Applications received in the offices of the Fund
after that date and time will be rejected and returned to the sender.
Applications sent electronically or by facsimile will not be accepted.
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, D.C. 20005.
FOR FURTHER INFORMATION CONTACT: If you have any questions about the
programmatic requirements for this program, contact the CDFI Program
Manager. Should you wish to request an application package or have
questions regarding application procedures, contact the CDFI Awards
Manager. They may be reached by phone at (202) 622-8662, by facsimile
at (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
fostering the creation of a national network of financial institutions
that are specifically dedicated to funding and supporting 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. The Act, which
implements this vision, authorizes the Fund to select entities to
receive financial and technical assistance. Institutions in operation
at the time of application are eligible to receive assistance to expand
their activities. New institutions are eligible to receive start-up
assistance. This NOFA invites applications from eligible organizations
for financial assistance, technical assistance, or both, for the
purpose of promoting community development activities, including
relatively new approaches to meeting the needs of underserved
populations such as:
(a) Efforts to design and implement financial services for low-and
moderate-income people, such as deposit accounts eligible for the
electronic receipt of Federal benefit payments under the Department of
Treasury's Electronic Funds Transfer (EFT '99) program;
(b) Programs, including a new Federal program authorized this year,
to encourage low-and moderate-income persons to accumulate personal
savings, such as through Individual Development Accounts (IDAs) that
provide matching contributions for each dollar saved; and
(c) Programs that provide technical assistance (TA) to prospective
and current small business borrowers, such as evaluating business
plans, financial analysis of debt service capacity and key financial
ratios, cash flow analysis, and referrals to other TA providers.
These TA programs may be structured as one-on-one consulting,
classroom and group training, peer group formats or as boards of
advisors.
The program connected with this NOFA constitutes the Core Component
of the CDFI Program, involving direct financial and TA to CDFIs that
serve their target markets through loans, investments and other
activities. This NOFA does not support CDFIs that primarily are funding
other CDFIs. Under this Core Component NOFA, the Fund has an
anticipated maximum award of $2.5 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.
Elsewhere in this issue of the Federal Register, the Fund is
publishing a separate NOFA for the third round of the Intermediary
Component of the CDFI Program. The Intermediary Component NOFA is
issued in recognition of the fact that many CDFIs may have specialized
needs which the Fund can most effectively address by supporting
intermediary CDFIs that, in turn, address such specialized needs.
An applicant under the Intermediary Component NOFA shall meet the
eligibility requirements set forth at Sec. 1805.200. An additional
requirement imposed upon each Intermediary Component applicant under
Sec. 1805.200(a)(3) is that it must primarily focus on financing CDFIs
or CDFIs in formation. To illustrate the concept, an Intermediary CDFI
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 CDFIs being
formed or organized but which are not yet CDFIs. By providing financial
assistance to specialized intermediaries, the Fund believes it can
leverage the expertise of such
[[Page 57223]]
intermediaries and strengthen the Fund's capacity to support the
development and enhancement of the CDFI industry.)
II. Eligibility
The Act and the interim rule specify the eligibility requirements
that each applicant must meet in order to be eligible to apply for
financial assistance, TA, or both under this Core Component NOFA. At
the time an entity submits its application, the entity must be duly
organized and validly existing under the laws of the jurisdiction in
which it is incorporated or otherwise established. An entity must meet,
or propose to meet, the CDFI certification requirements. In general, a
CDFI must have a primary mission of promoting community development,
provide lending or investments, serve an investment area or a targeted
population, provide development services, maintain community
accountability, and be a non-government entity. The details regarding
these requirements and other program requirements are described in the
application packet and the interim rule.
A CDFI, or proposed CDFI, whose primary focus is financing other
CDFIs and/or providing financing to support the formation of CDFIs
shall not be eligible for an award under this NOFA, but instead may be
eligible for an award under the NOFA on the Intermediary Component
published elsewhere in this issue of the Federal Register.
III. Types of Assistance
An applicant may submit an application for financial assistance,
TA, or both under this Core Component NOFA. Financial assistance may be
provided through an equity investment, a grant, a loan, deposits,
credit union shares, or any combination thereof. Applicants for
financial assistance shall indicate the dollar amount, form, and terms
and conditions of assistance requested. Applicants for TA under this
NOFA shall describe the types of TA requested, the provider(s) of the
TA, the cost of the TA, and a narrative justification of its needs for
the TA.
IV. Application Packet
Except as described hereafter, an applicant under this NOFA,
whether applying for financial assistance, TA, or both, shall submit
the materials described in Sec. 1805.701 and the application packet.
If an applicant is currently certified as a CDFI by the Fund, it
may submit a copy of the Fund's letter of certification and the
Certification of Material Changes form, a copy of which is contained in
the application packet, in lieu of the information described in
Secs. 1805.701(b) (1)-(8). However, an applicant should include
information in its application that it believes is relevant to the
Fund's substantive review of the application under Sec. 1805.802(b) and
this NOFA.
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 financial assistance provided by the
Fund. Such matching funds shall be at least comparable in form and
value to the financial 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 grant an extension of such matching funds
deadline for specific applicants selected for assistance if the Fund
deems it appropriate. Funds used by an applicant as matching funds for
a previous award under the CDFI Program or under another Federal grant
or award program cannot be used to satisfy the Sec. 1805.600 matching
funds requirement.
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. The Fund anticipates that most
applications will not be selected for additional consideration. 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
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initial and second stage evaluations and the geographic and
institutional diversity of those applicants being considered for
funding in accordance with 12 CFR 1805.801 and 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 $2.5
million. However, the Fund, in its sole discretion, reserves the right
to make individual award amounts in excess of $2.5 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.
Dated: October 20, 1998.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development
Financial Institutions Fund.
[FR Doc. 98-28516 Filed 10-23-98; 8:45 am]
BILLING CODE 4810-70-P
