[Federal Register Volume 68, Number 23 (Tuesday, February 4, 2003)]
[Notices]
[Pages 5738-5743]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2340]


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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--Financial 
Assistance Component

AGENCY: Community Development Financial Institutions Fund, Department 
of the Treasury.

ACTION: Notice of Funds Availability (``NOFA'') inviting applications 
for the FY 2003 funding round of the Financial Assistance Component of 
the Community Development Financial Institutions (``CDFI'') Program.

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SUMMARY: This NOFA is issued in connection with the FY 2003 round of 
the Financial Assistance Component of the CDFI Program. Through the 
Financial Assistance Component, the Community Development Financial 
Institutions Fund (the ``Fund'') makes financial investments in and may 
provide 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 finance purposes.
    The Financial Assistance Component is designed to address 
capitalization needs of two types of CDFIs: (i) Category I includes 
CDFIs that have capitalization needs up to and including $1,000,000 and 
total assets as of December 31, 2002 that range up to $250 million (for 
insured depository institutions and depository institution holding 
companies), up to $25 million (for insured credit unions), or up to $15 
million for other CDFIs, and (ii) Category II includes CDFIs with 
assets above those ranges and/or that can effectively deploy funding in 
an amount in excess of $1,000,000, either to leverage greater private 
sector resources in support of their lending and investing activities 
(such as through funding a loan loss reserve or credit enhancement), or 
to develop and effectively provide innovative financial products and 
services that address the capital needs of particularly underserved 
markets.
    Through this NOFA, the Fund intends to target its resources and 
provide financial assistance awards to CDFIs that will use award 
proceeds to:
    (a) Serve Hot Zones, meaning geographic areas designated by the 
Fund as having greater levels of economic distress, and/or
    (b) Achieve the Fund's FY 2003 Programmatic Priorities, which are:
    (i) To increase homeownership opportunities that are affordable to 
Low-Income households, and
    (ii) To increase homeownership opportunities for Other Targeted 
Populations (as described below). For purposes of the FY 2003 NOFA for 
the Financial Assistance Component, the Hot Zones (and the Fund's 
methodology for Hot Zone designation) are identified through the Fund's 
Web site at http://www.cdfifundhelp.gov.
    Subject to funding availability, the Fund expects that it may award 
approximately $30 million in appropriated funds under this Financial 
Assistance Component NOFA. The Fund reserves the right to award in 
excess of $30 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 up to $1,000,000 per 
award for Category I CDFIs and up to $2,000,000 per award for Category 
II CDFIs. 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. 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

[[Page 5739]]

to re-allocate funds from the amount that is anticipated to be 
available under this NOFA to other Fund programs, particularly if the 
Fund determines that the number of awards made under this NOFA is fewer 
than projected.
    While the Financial Assistance Component offers TA grants in 
conjunction with financial investments, entities seeking TA awards only 
should apply for funds through the Technical Assistance Component.
    The interim rule governing the CDFI Program (12 CFR part 1805), 
revised and published in this issue of the Federal Register, provides 
guidance on evaluation criteria and other requirements of the CDFI 
Program. Detailed application content requirements are found in the 
application related to this NOFA. The Preamble to the Fund's NOFAs, 
published in this issue of the Federal Register also specifies other 
program information, including eligibility requirements, for each of 
the Fund's programs. The Fund encourages applicants to review the 
revised interim rule and the Preamble to the NOFAs; in addition, all of 
the application content requirements and the evaluation criteria set 
forth in the revised interim rule are set forth in the application.

DATES: Applicants may submit applications under this Financial 
Assistance Component NOFA either electronically or in paper form. In 
order to expedite application review, however, the Fund expects 
applicants to submit Financial Assistance Component applications 
electronically (via an Internet-based application) per 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.
    Shortly following the publication of this NOFA, the Fund will make 
available the FY 2003 Financial Assistance Component funding electronic 
application on its Web site at http://www.cdfifund.gov. 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 February 21, 2003. The request must contain the 
applicant's name; the name and phone number of a contact person; a 
mailing address (provide a physical address for overnight deliveries) 
for delivery of the paper application; 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 [email protected] or 
by facsimile to (202) 622-6453 .
    Applicants will 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. Electronic applications must be submitted solely by using 
the format made available at the Fund's Web site for the Financial 
Assistance Component. Additional information, including instructions 
relating to the submission of signature forms and supporting 
information, is set forth in further detail in the electronic 
application.
    The Fund will provide program and technical support for the 
Financial Assistance Component application between the hours of 9 a.m. 
and 5 p.m. starting Monday, February 3, 2003, through Friday, March 7, 
2003. The Fund will not respond to phone calls or e-mails concerning 
the application that are received after 5 p.m. on March 7, 2003, until 
after the Financial Assistance Component application deadline of March 
10, 2003. Program support can be obtained by calling (202) 622-6355. 
Technical support can be obtained by calling (202) 622-2455 and 
selecting option 1, then option 2, and then option 9. Program or 
technical support can also be obtained by e-mail at 
[email protected].
    The deadline for receipt of either paper or electronic applications 
is 5 p.m. ET on March 10, 2003. Paper applications must be received in 
their entirety by this time and date, including attachments. Electronic 
applications timely submitted may submit an original signature page not 
later than 5 p.m. ET on March 12, 2003. See application instructions, 
provided in the electronic application, for further detail. 
Applications received after this date and time will be rejected and 
returned to the sender.
    Applications sent by facsimile or by e-mail will not be accepted.

ADDRESSES: Paper applications must be sent to: CDFI Fund Awards 
Manager, Financial Assistance Component, Bureau of Public Debt `` 
Franchising, 200 Third Street, Room 211, Parkersburg, WV 26101. The 
telephone number to be used in conjunction with overnight mailings to 
this address is (304) 480-5450. Applications will not be accepted at 
the Fund's offices in Washington, DC. Applications 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 Web site and 
must be sent in accordance with the submission instructions provided in 
the electronic application form.

FOR FURTHER INFORMATION CONTACT: If you have any questions about the 
programmatic requirements for this program, contact the Fund's Program 
Operations Manager. If you have questions regarding administrative 
requirements, contact the Fund's Awards Manager. The Program Operations 
Manager and the Awards Manager may be reached by e-mail at 
[email protected], 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.

SUPPLEMENTARY INFORMATION:

I. Eligibility

    The Act and the interim rule specify 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) Certification: For purposes of this Financial Assistance 
Component NOFA, an application for an award will not be considered 
unless:
    (a) An applicant is already certified as a CDFI with a 
certification expiration date after June 30, 2003; or
    (b) The Fund receives from an applicant a complete CDFI 
certification application no later than February 14, 2003, evidencing 
that the applicant can be certified as a CDFI. With respect to any CDFI 
that is currently certified by the Fund and whose certification 
expiration date is on or before June 30, 2003, the Fund must receive an 
application for re-certification no later than February 14, 2003, 
evidencing that the applicant can be re-certified as a CDFI. Applicants 
may obtain CDFI certification applications through the Fund's Web site 
at http://www.cdfifund.gov. Applications for certification and re-
certification must be submitted as instructed in the application form.
    (2) Previous Awardees: Applicants must be aware that success in a 
previous round of the CDFI Program or the Native American CDFI 
Technical Assistance (``NACTA'') Program 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 previous CDFI Program or NACTA Program funding round, but that 
has not

[[Page 5740]]

submitted a CDFI certification application nor been certified as a 
CDFI, is not eligible to receive funding under this NOFA (see 
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 (further 
guidance on the calculation of the $5 million cap is available on the 
Fund's Web site at http://www.cdfifund.gov);
    (c) The Fund will not consider an application submitted by an 
applicant that is a previous Fund awardee under any Fund program or 
component of the CDFI Program if the applicant has failed to meet its 
reporting requirements, set forth in the previously executed assistance 
or award agreement(s), as of the application deadline of this NOFA; and
    (d) The Fund will not consider an application submitted by an 
applicant that is a previous Fund awardee under any Fund program or 
component of the CDFI Program that has a balance of undisbursed funds 
under said previous award, as of the application deadline of this NOFA. 
Accordingly, applicants that are previous awardees are advised to:
    (i) Submit all required reports by the deadlines specified in the 
assistance or award agreements governing said prior awards and to 
comply with all requirements found therein and
    (ii) Contact the appropriate Program Operations representative of 
the Fund to ensure that all necessary actions are underway for the 
disbursement of any outstanding balance of said prior award.
    (3) 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.

II. Types of Assistance

    An applicant may submit an application either for financial 
assistance (``FA'') only or for FA and a TA grant, under this NOFA. 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, to 
provide FA in a form other than that which is requested by an 
applicant, or a TA grant for uses other than that which are requested 
by an 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 community development impact. Eligible types of TA grant 
uses include, but are not limited to, the following:
    (1) Acquiring consulting services;
    (2) Paying staff salary for the limited purposes of completing 
tasks and/or fulfilling functions that are otherwise eligible TA grant 
uses under this NOFA (use of TA for this purpose is limited to 
applicants with total assets not exceeding $5 million as of December 
31, 2002);
    (3) Acquiring/enhancing technology items; and
    (4) 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.

III. Application

    An applicant under this NOFA must submit all materials described in 
the application. An application must include a valid and current 
Employer Identification Number, issued by the Internal Revenue Service, 
or the application will be rejected as incomplete and returned to the 
sender.

IV. Matching Funds

    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

[[Page 5741]]

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).
    Due to funding constraints and the desire to quickly deploy CDFI 
Fund dollars, the Fund will not consider for funding any applicant that 
does not have at least the following level of matching funds committed 
or in-hand: 25 percent of requested FA in-hand and 50 percent of 
requested FA firmly committed. Matching funds in-hand (received), or 
firm commitments for matching funds made, on or after January 1, 2002, 
and before April 30, 2004, will be considered when determining matching 
funds eligibility. The Fund reserves the right to recapture and 
reprogram an award if an applicant fails to raise the required matching 
funds by April 30, 2004 (with documentation of such receipt received by 
the CDFI Fund not later than May 15, 2004), or to grant an extension of 
such matching funds deadline for specific applicants selected to 
receive FA, if the Fund deems it appropriate. 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.
    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. If an 
applicant seeks to use as matching funds monies received from an 
organization that was a previous 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.

V. Evaluation

    All applications will be reviewed for eligibility and completeness. 
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 interim regulations, this NOFA and the 
application. First, the Fund will determine whether the applicant has a 
need for capital, based on the applicant's projections of capital 
available and activities projected. Applicants not projecting a need 
for capital will not be considered. Next, the Fund will determine 
whether the applicant has a minimum of 25 percent of the requested FA 
in matching funds in-hand and 50 percent of the matching funds for the 
requested assistance firmly committed. If this level of matching funds 
is not documented as in-hand or firmly committed, the applicant will 
not be considered for funding. Following these determinations, the Fund 
will evaluate each application on a 100-point scale, comprising the 
four criteria categories set forth below; each applicant must obtain a 
minimum score in each section to be considered for funding. Numeric 
scores will be related to:
    (1) Market Need and Community Development Performance: including an 
evaluation of:
    (a) 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 serving 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) The extent to which the applicant demonstrates that it will 
target its activities to Hot Zones and/or the Fund's Programmatic 
Priorities;
    (c) The applicant's realistic 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);
    (d) 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);
    (e) 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); and
    (f) 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. For any entity that has already received an 
award from the Fund, the applicant also will be evaluated on the extent 
to which it proposes to create greater community development impact 
than to be achieved through the prior award and its track record in 
meeting previous performance goals and other Assistance Agreement 
requirements (maximum of 40 points; minimum of 20 points required to be 
considered for an award);
    (2) Management and Underwriting: including an evaluation of:
    (a) The applicant's underwriting and portfolio quality;
    (b) Risk mitigation strategies; and
    (c) The capacity, skills and experience of the applicant's 
management team as appropriate to deliver the proposed products and 
services (maximum of 20 points; minimum of 10 points required to be 
considered for an award);
    (3) Financial Health: including an evaluation of the applicant's 
liquidity and other elements of financial strength, including earnings, 
capital adequacy, and deployment of resources (maximum of 20 points; 
minimum of 10 points required to be considered for an award); and
    (4) Financial Sustainability and Matching Funds: including an 
evaluation of:
    (a) The applicant's projected financial health, including its 
ability to raise operating support from sources other than the Fund and 
its capitalization strategy (including participation in a secondary 
market); and
    (b) Extent to which the applicant has matching funds in-hand or 
firmly committed, as described above. Applicants must demonstrate 100 
percent of the requested FA can be matched with matching funds in-hand 
or fully committed in order to receive more than 15 out of 20 points in 
this section. Under this category, applicants

[[Page 5742]]

are expected to have strategies for ensuring financial viability (of 
both financing capital and operating funds) and reasonable amounts of 
matching funds in-hand, committed or likely to be raised (maximum of 20 
points; minimum of 10 points required to be considered for an award).
    The Fund will 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. A minimum 
of 50 points total, and the required minimum number of points in each 
section (with points allotted per evaluation criterion, as set forth 
above), is required for an application to be further considered for an 
award. 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.
    In the case of an applicant that has previously received funding 
from the Fund through the Bank Enterprise Award (BEA) Program, CDFI 
Program or the NACTA Program, the Fund will consider, as appropriate:
    (a) The applicant's level of success and extent of compliance in 
meeting its performance goals, financial soundness covenants (if 
applicable) and other requirements set forth in the assistance or award 
agreement(s) with the Fund, including submission of required reports on 
time;
    (b) The benefits that will be created with new Fund assistance over 
and above benefits created by previous Fund assistance; and
    (c) The extent and effectiveness to which the applicant has used 
previous assistance from 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 
regulated CDFIs, the selecting official will take into consideration 
the views of the appropriate Federal banking agencies.
    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. Any applicant that is not selected for an award 
due to application incompleteness or ineligibility, and that believes 
that such decision was made in error, may appeal said decision by 
notifying the Fund's Awards Manager in writing or by e-mail (at 
[email protected], Attention: Awards Manager); such appeals must 
be received by the Fund within five business days of the date of the 
declination letter. Such appeal requests will be reviewed by the Fund's 
Deputy Director for Management and the Deputy Director for Policy and 
Programs, as appropriate, whose decision will be final. All applicants 
that are not selected for awards based on substantive issues, will be 
given the opportunity to request 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 these evaluation procedures, 
if the Fund deems it appropriate; if said procedural changes materially 
affect the Fund's award decisions, the Fund will provide information 
regarding the procedural changes through the Fund's Web site.

VI. 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 not in compliance with the terms 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.

VII. Assistance Agreement

    Each applicant that is selected to receive an award under this NOFA 
must enter into an Assistance Agreement with the Fund. The Assistance 
Agreement will set forth certain required terms and conditions of the 
award, which will include, but not be limited to,
    (a) The amount of the award;
    (b) The type of award;
    (c) The approved uses of the award;
    (d) The approved Target Market to which the award must be targeted;
    (e) Performance goals and measures; and
    (f) 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, along with any other 
requested documentation, within the deadline set by the Fund.
    In addition to entering into an Assistance Agreement, each awardee 
that receives an award either:
    (a) In the form of a loan, equity investment, credit union shares/
deposits, or secondary capital, in any amount, or
    (b) 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:
    (i) Is duly formed and in good standing in the jurisdiction in 
which it was formed and/or operates;
    (ii) Has the authority to enter into the Assistance Agreement and 
undertake the activities that are specified therein; and
    (iii) 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.

VIII. Performance Rating: PLUM

    In order to better manage its portfolio of awards, the Fund is 
developing a

[[Page 5743]]

performance rating system, entitled ``PLUM,'' that will grade each CDFI 
according to its overall financial strength and potential for creating 
community development impact. Initially, PLUM will serve as the Fund's 
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 will analyze and grade several indicators under each of those 
areas, and aggregate them into an overall rating. The Fund is currently 
conducting the analyses needed to identify appropriate peer groups and 
target ranges for each indicator. Based on this information, the Fund 
will conduct targeted analyses of its portfolio, highlight ``best 
practices'' that can be shared with the CDFI field, and better assess 
CDFIs' ability to expand or stabilize underserved market areas. 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 2003 Financial Assistance Component application.

VIIII. Reporting and Monitoring

    The Fund will collect information, on at least an annual basis, 
from all CDFI Program awardees, including:
    (a) Annual reports related to, among other matters, awardee 
compliance with the performance goals and measures set forth in the 
Assistance Agreement;
    (b) Audited financial statements;
    (c) Annual surveys; and
    (d) Such other information that the Fund may require, including 
loan level data. The Fund will use such information to monitor each 
awardee's compliance with the requirements set forth in the Assistance 
Agreement. The Fund will also use such information to assess the impact 
of the CDFI Program.
    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 due notice to the awardee.
    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 any such fee, the Fund will publish additional information 
concerning the nature and amount of the fee.

X. 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 specific 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.

XI. Information Sessions

    In connection with the Fiscal Year 2003 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 Technical Assistance 
and Financial Assistance Components of the CDFI Program, the NACD 
Program, and the BEA Program. 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) 622-8401.

    Catalog of Federal Domestic Assistance: 21.020.


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

    Dated: January 27, 2003.
Tony T. Brown,
Director, Community Development Financial Institutions Fund.
[FR Doc. 03-2340 Filed 2-3-03; 8:45 am]
BILLING CODE 4810-70-P