[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]



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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  

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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--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

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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