[Federal Register Volume 64, Number 210 (Monday, November 1, 1999)]
[Notices]
[Pages 59096-59099]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28283]


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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), most recently published in the Federal 
Register on April 4, 1997 (62 FR 16444), and now revised and published 
elsewhere in this issue of the Federal Register, provides guidance on 
the contents of application materials, evaluation criteria and other 
program requirements. More detailed application content requirements 
are found in the application packet. While the Fund encourages 
applicants to review the interim rule, all of the application content 
requirements and the evaluation criteria contained in the interim rule 
are also contained in the application packet. Subject to the 
availability of funds, the Fund currently anticipates making awards of 
up to $6 million in appropriated funds under this NOFA and expects to 
make four to ten awards. The Fund reserves the right to award in

[[Page 59097]]

excess of $6 million in appropriated funds under this NOFA provided 
that 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 issued in connection with the Intermediary Component 
of the CDFI Program. The Intermediary Component provides financial 
assistance and technical assistance to CDFIs that provide financing 
primarily to other CDFIs and/or to support the formation of CDFIs. 
Elsewhere in this issue of the Federal Register, the Fund is publishing 
a separate NOFA for the fifth round of the Core Component of the CDFI 
Program, with respect to which the Fund intends to make available up to 
$50 million in appropriated funds. The Core Component provides 
assistance to CDFIs that directly serve their target markets through 
loans, investments and other activities, not including the financing of 
other CDFIs.

DATES: Applications may be submitted at any time after November 1, 
1999. The deadline for receipt of an application is 6:00 p.m. EST on 
January 18, 2000. Applications received in the offices of the Fund 
after that date and time will be rejected and returned to the sender.

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. 
Applications sent to the Fund electronically or by facsimile will not 
be accepted.

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 any 
questions regarding application procedures, contact the Awards Manager. 
The CDFI Program Manager and the Awards Manager may be reached by e-
mail at [email protected], by telephone 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. These are not toll free 
numbers. Allow at least one to two weeks from the date the Fund 
receives a request for receipt of the application package. Applications 
and other information regarding the Fund and its programs may be 
downloaded from the Fund's web site 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 
funds and supports a national network of financial institutions that is 
specifically dedicated to community development. This strategy builds 
strong institutions that make loans and investments and provide 
services to economically distressed investment areas and disadvantaged 
targeted populations. The Act authorizes the Fund to select entities to 
receive financial and technical assistance. This NOFA invites 
applications from eligible organizations for financial assistance, 
technical assistance, or both, for the purpose of promoting community 
development activities.
    The program connected with this NOFA constitutes the Intermediary 
Component of the CDFI Program, involving financial assistance to CDFIs 
that provide financing primarily to other CDFIs and/or to support the 
formation of CDFIs. Under this Intermediary Component NOFA, the Fund 
anticipates a maximum award amount of $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.
    Previous awardees under the CDFI Program are eligible to apply 
under this NOFA, but such applicants must be aware that success in a 
previous round should not be considered indicative of success under 
this NOFA. In addition, organizations will not be penalized for having 
received awards in previous funding rounds, except to the extent that:
    (1) 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; and
    (2) An applicant that is a previous awardee has failed to meet its 
performance goals, financial soundness covenants (if applicable) and/or 
other requirements contained in the previously executed assistance 
agreement(s).
    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 by reaching CDFIs that the Fund itself 
cannot reach as effectively under the Core Component. An intermediary 
CDFI may, for example, 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 provide financing, 
in arms-length transactions, to other CDFIs and/or to support the 
formation of CDFIs.
    This NOFA implements the fourth round of the Intermediary 
Component.

II. Eligibility

    The Act and the interim rule, as revised, specify the eligibility 
requirements that each applicant must meet in order to be eligible to 
apply for assistance under this Intermediary Component NOFA. At the 
time an entity submits its application, the entity must be a duly 
organized and validly existing legal entity under the laws of the 
jurisdiction in which it is incorporated or otherwise established. An 
entity must meet, or propose to meet, the CDFI eligibility 
requirements. In general, a CDFI and its affiliates must collectively 
have a primary mission of promoting community development. In addition, 
the applicant organization must provide lending or equity investments, 
serve an investment area or a targeted population, provide development 
services, maintain community accountability, and be a non-governmental 
entity.
    In addition, this NOFA is limited to applicants that satisfy the 
following requirements:

[[Page 59098]]

    (1) The applicant's financial products (loans, equity investments, 
grants, and deposits) must primarily focus on financing other CDFIs 
and/or supporting the formation of CDFIs; or
    (2) If (a) the applicant does not meet the CDFI eligibility 
requirements; or
    (b) if the applicant's financial products 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) by September 30, 2001 
(which period may be extended at the sole discretion of the Fund). In 
no event will the Fund disburse financial or technical assistance to 
the applicant until the applicant can be certified as a CDFI and 
demonstrates that its products primarily focus on other CDFIs and/or 
the formation of CDFIs. Further details regarding eligibility and other 
program requirements are found in the application packet.

III. Types of Assistance

    An applicant may submit an application for financial assistance or 
technical assistance (TA) under this NOFA. Financial assistance may be 
provided 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 the assistance requested. Applicants for TA under this 
NOFA shall describe the type(s) of TA requested, the provider(s) of the 
TA, the cost of the TA, and a narrative justification for their TA 
request.

IV. Application Packet

    An applicant under this NOFA, whether applying for financial 
assistance, TA, or both, must submit the materials described in the 
application packet.

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. Matching 
funds must 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, 1998, and before August 31, 2001, may be 
considered when determining matching funds availability. The Fund 
reserves the right to recapture and reprogram funds if an applicant 
fails to raise the required matching funds by August 31, 2001, or 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 matching funds requirement.

VI. Evaluation

    All applications will be reviewed for eligibility and completeness. 
If determined to be eligible and complete, applications will be 
evaluated by the Fund on a competitive basis in accordance with the 
criteria described in this NOFA. In conducting its substantive review, 
the Fund will evaluate the following criteria:
    (1) The applicant's ability to carry out its Comprehensive Business 
Plan and create community development impact (the Ability criterion);
    (2) The quality of the applicant's strategy for carrying out its 
Comprehensive Business Plan and for creating community development 
impact (the Strategy criterion); and
    (3) The extent to which an award to the applicant will maximize the 
effective use of the Fund's resources (the Effective Use criterion).
    In addition, the Fund will consider the institutional and 
geographic diversity of applicants in making its funding 
determinations.

Phase One

    In Phase One of the substantive review, each Fund reader(s) will 
evaluate applications using a 100-point scale, as follows:
    Ability to Carry Out the Comprehensive Business Plan and Create 
Community Development Impact: 50-point maximum, with a minimum score of 
25 points required to be passed on for Phase Two review. The score of 
the Ability criterion is based on a composite assessment of an 
applicant's organizational strengths and weaknesses under the four sub-
criteria listed below. Such scoring reflects different weighting of the 
sub-criteria depending on whether an applicant is a start-up 
organization or an established organization. The Fund defines a start-
up organization as an entity that has been in operation for two years 
or less, as of the date of this NOFA (meaning, for purposes of this 
NOFA, having incurred initial operating expenses on or after November 
1, 1997). For purposes of this NOFA, start-up organizations will not be 
evaluated under the Ability criterion on their previous community 
development and financial track records. Instead, start-up 
organizations will be scored entirely on operational and management 
capacity.
    Under the Ability section of the application, the Fund will 
evaluate the following four sub-criteria:
    (1) Community development track record: 12-point maximum 
(established organizations only);
    (2) Operational capacity and risk mitigation strategies: 12-point 
maximum (established organizations), 20-point maximum (start-ups);
    (3) Financial track record and strength: 12-point maximum 
(established organizations only); and
    (4) Capacity, skills and experience of the management team: 14-
point maximum (established organizations), 30-point maximum (start-
ups).
    Quality of the Strategy for Carrying Out the Comprehensive Business 
Plan and for Creating Impact: 40-point maximum with a minimum of 20 
points required to be passed on for Phase Two review. Under the 
Strategy section of the application, the Fund will evaluate the 
following four sub-criteria:
    (1) The applicant's understanding of its market: 10-point maximum;
    (2) Program design and implementation plan: 10-point maximum;
    (3) Projections for financial performance and raising needed 
resources: 10-point maximum; and
    (4) Projections for generating, measuring and evaluating community 
development impact: 10-point maximum.
    In the case of an applicant that has previously received assistance 
from the Fund under the CDFI Program, the Fund will consider whether 
the applicant will expand its operations into a new target market, 
offer more products or services, and/or increase the volume of its 
activities.
    Maximizing Effective Use of Fund Resources: 10-point maximum, with 
no minimum score required to be passed on for Phase Two review. The 
Fund will consider:
    (1) The extent to which the applicant needs the Fund's assistance 
to carry out its Comprehensive Business Plan; and
    (2) The extent of economic distress in the applicant's target 
market.
    In addition, in the case of an applicant that has previously 
received assistance from the Fund under the CDFI Program, the Fund will 
consider the applicant's level of success in meeting its performance 
goals, financial soundness covenants (if applicable) and other 
requirements contained in the assistance agreement(s) with the Fund, 
and the benefits that will be created with new Fund assistance over and

[[Page 59099]]

above benefits created by previous Fund assistance.

Phase Two

    Once the initial evaluation is completed, the Fund will determine 
which applications will receive further consideration for funding based 
on application scores (standardized if deemed appropriate), 
recommendations of individuals performing initial reviews and the 
amount of funds available. Applicants that advance to Phase Two may 
receive a site visit and/or telephone interview(s) conducted by a Fund 
reviewer for the purpose of obtaining clarifying or confirming 
information. At this point in the process, applicants will be required 
to submit additional information, as set forth in detail in the 
application packet. After conducting such site visits/telephone 
interview(s), the Fund reviewer will evaluate applications in 
accordance with the evaluation criteria outlined above and prepare a 
recommendation memorandum containing recommendations on the type and 
amount of assistance that should be provided to the applicant.
    A final review panel comprised of Fund staff will consider the Fund 
reviewer's recommendation memorandum and make a final recommendation to 
the Fund's selecting official. In making its recommendations, the final 
review panel also may consider the institutional diversity and 
geographic diversity of applicants (e.g., recommending a CDFI from a 
State in which the Fund has not previously made an award over a CDFI in 
a State in which the Fund has already made numerous awards).
    The Fund's selecting official will make a final funding 
determination based on the applicant's file, including, without 
limitation, reader(s)/reviewer(s) recommendations and the panel's 
recommendation, and the amount of funds available. In the case of 
regulated CDFIs, the selecting official will also take into 
consideration the views of the appropriate Federal banking agencies.
    The Fund reserves the right to change these evaluation procedures 
if the Fund deems it appropriate.

VII. Information Sessions

    In connection with this NOFA and the NOFA for the Core Component, 
the Fund will conduct Information Sessions to disseminate information 
to organizations contemplating applying for, and other organizations 
interested in learning about, the CDFI Program. Registration is 
required and registration in advance is preferred. The Fund will 
conduct 12 in-person Information Sessions, beginning November 8, 1999, 
as follows:

Atlanta, GA, November 9, 1999;
Boston, MA, November 15, 1999;
Chicago, IL, November 8, 1999;
Cleveland, OH, November 9, 1999;
Dallas, TX, November 9, 1999;
Memphis, TN, November 8, 1999;
Miami, FL, November 8, 1999;
New York, NY, November 16, 1999;
Salt Lake City, UT, November 16, 1999;
San Diego, CA, November 19, 1999;
San Francisco, CA, November 22, 1999; and
Seattle, WA, November 15, 1999.

    In addition to the in-person sessions listed above, the Fund will 
broadcast an Information Session using interactive video-
teleconferencing technology on November 16, 1999, from 1:00 p.m. to 
4:00 p.m. EST. Registration is required and registration in advance is 
preferred. This Information Session will be produced in Washington, DC, 
and will be downlinked via satellite to the local Department of Housing 
and Urban Development (HUD) offices located in the following 73 cities: 
Albany, NY: Albuquerque, NM; Anchorage, AK; Atlanta, GA; Baltimore, MD; 
Bangor, ME; Beaumont, TX; Birmingham, AL; Boise, ID; Buffalo, NY; 
Burlington, VT; Casper, WY; Charleston, WV; Chicago, IL; Cincinnati, 
OH; Columbia, SC; Columbus, OH; Denver, CO; Des Moines, IA; Detroit, 
MI; Fargo, ND; Flint, MI; Fresno, CA; Grand Rapids, MI; Greensboro, NC; 
Hartford, CT; Helena, MT; Honolulu, HI; Houston, TX; Indianapolis, IN; 
Jackson, MS; Jacksonville, FL; Kansas City, KS; Knoxville, TN; Lanham, 
MD; Las Vegas, NV; Little Rock, AR; Los Angeles, CA; Louisville, KY; 
Lubbock, TX; Manchester, NH; Miami, FL; Milwaukee, WI; Minneapolis/St. 
Paul, MN; Nashville, TN; New Orleans, LA; Newark, NJ; Oklahoma City, 
OK; Omaha, NE; Orlando, FL; Philadelphia, PA; Phoenix, AZ; Pittsburgh, 
PA; Portland, OR; Providence, RI; Reno, NV; Richmond, VA; Sacramento, 
CA; St. Louis, MO; San Antonio, TX; San Francisco, CA; San Juan, PR; 
Santa Ana, CA; Shreveport, LA; Sioux Falls, SD; Spokane, WA; 
Springfield, IL; Syracuse, NY; Tampa, FL; Tucson, AZ; Tulsa, OK; 
Washington, DC; and Wilmington, DE.
    For more information, or to register for an Information Session, 
please contact the Fund at (202) 622-8662 or visit the Fund's web site 
at www.treas.gov/cdfi.

    Authority: 12 U.S.C. 4703, 4703 note, 4704, 4706, 4707, and 
4717; 12 CFR part 1805.

    Dated: October 25, 1999.
Maurice A. Jones,
Deputy Director for Policy and Programs, Community Development 
Financial Institutions Fund.
[FR Doc. 99-28283 Filed 10-29-99; 8:45 am]
BILLING CODE 4810-70-P