[Federal Register Volume 68, Number 23 (Tuesday, February 4, 2003)]
[Notices]
[Pages 5743-5746]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2341]


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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, the Native 
American CDFI Development Program, and the Bank Enterprise Award 
Program

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

ACTION: Preamble for Notices of Funds Availability (``NOFA'') inviting 
applications for the FY 2003 funding round of the Technical Assistance 
Component and Financial Assistance Component of the Community 
Development Financial Institutions (``CDFI'') Program, the Native 
American CDFI Development (``NACD'') Program, and the Bank Enterprise 
Award (``BEA'') Program.

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SUMMARY:

I. Legislative Background

    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 promote economic revitalization and 
community development through investment in and assistance to Fund-
certified community development financial institutions (``CDFIs'') 
through the CDFI Program. The Act also authorizes the Fund to provide 
incentives, through the BEA Program, to insured depository institutions 
for the purposes of promoting investments in or other support to CDFIs 
and facilitating increased lending and provision of financial and other 
services in economically distressed communities. In addition, the 
Departments of Veterans Affairs and Housing and Urban Development, and 
Independent Agencies Appropriations Act, 2002 (Pub. L. No. 107-73) 
authorizes the Fund to provide technical assistance grants to promote 
economic development in Native American, Alaska Native and Native 
Hawaiian communities by building the capacity of

[[Page 5744]]

CDFIs that serve Native American, Alaska Native and Native Hawaiian 
populations. Further, Title I, subtitle C, section 121 of the Community 
Renewal Tax Relief Act of 2000, as enacted by section 1(a)(7) of the 
Consolidated Appropriations Act, 2001 (Pub. L. No. 106-554, December 
21, 2000), established the New Markets Tax Credit (``NMTC'') Program 
which will provide an incentive to investors in the form of a tax 
credit over seven years, which is expected to stimulate the provision 
of private investment capital that, in turn, will facilitate economic 
and community development in low-income communities.

II. The CDFI Fund's Programs: A Continuum of Capital, Investment and 
Incentive Opportunities

    Credit and investment capital are essential ingredients for 
developing affordable housing, promoting homeownership, starting or 
expanding businesses, meeting unmet market needs, and stimulating 
economic growth. Access to financial services is critical to helping 
bring more Americans into the economic mainstream. Provision of 
counseling and technical assistance is needed for Americans to 
effectively use the nation's financial system and avoid ``predatory'' 
financial products.
    Through the CDFI Program, the BEA Program and the NMTC Program, the 
Fund supports financial institutions around the country that are 
specifically dedicated to financing and supporting community and 
economic development activities. This strategy builds strong 
institutions that make loans and investments and provide financial 
services in markets (including economically distressed investment areas 
and disadvantaged targeted populations) whose needs for loans, 
investments, and financial services have not been fully met by 
traditional financial institutions, particularly in the areas of 
promoting homeownership, developing affordable housing, and stimulating 
small business development, as well as providing financial services to 
those that have not previously accessed financial institutions. The 
Fund's programs are designed to address the unique capitalization and/
or technical capacity needs of CDFIs and other community development 
entities, so that they may better meet the needs of their particular 
target markets through loans, investments, financial services and other 
related activities.
    Pursuant to the Act, in 2001, the Fund completed and published the 
Native American Lending Study (``the Study''), which identifies 
significant barriers to lending and investment in Native American, 
Alaska Native and Native Hawaiian communities and strategies for 
overcoming those barriers. One of the barriers identified by the Study 
is the small number of CDFIs and other financial institutions in Native 
American, Alaska Native and Native Hawaiian communities. Since CDFIs 
are important tools for developing self-sustaining economies in many 
underserved communities, the Fund seeks to assist Native American, 
Alaska Native and Native Hawaiian communities to create and develop 
CDFIs that serve such communities.
    In Fiscal Year 2003, the components of the CDFI Program, the NACD 
Program, the New Markets Tax Credit (``NMTC'') Program, and the BEA 
Program (each described below), together constitute a continuum of 
programmatic and investment alternatives to support financial 
institutions in their efforts to provide capital and financial services 
to underserved communities. These program alternatives range from 
capacity-building and technical assistance grants to emerging entities, 
to financial investments to capitalize CDFIs, to community development 
investment incentives for insured depository institutions, to Federal 
tax credit incentives for community development investors.
    (1) Technical Assistance Component (CDFI Program): Through the 
Technical Assistance Component of the CDFI Program, the Fund provides 
technical assistance (``TA'') grants to CDFIs, and entities proposing 
to become CDFIs, in order to build their capacity to better address the 
community development and capital access needs of their particular 
target markets including, but not limited to, entities specifically 
serving or proposing to serve Native American, Alaska Native and/or 
Native Hawaiian communities. The FY 2003 and 2004 NOFA for the 
Technical Assistance Component is published in this issue of the 
Federal Register.
    (2) Native American CDFI Development Program: Through the NACD 
Program, the Fund may provide TA grants to entities in order to create 
CDFIs designed to address the community development and capital access 
needs of Native American, Alaska Native and/or Native Hawaiian 
communities. The FY 2003 and 2004 NOFA for the NACD Program is 
published in this issue of the Federal Register. Interested parties 
should be aware that implementation of the FY 2003/04 NOFA for the NACD 
Program is contingent on the appropriation of funds for the purposes 
enumerated in the NOFA; as of the date of this NOFA, said appropriation 
is pending with Congress. The Fund will issue a notice on its Web site, 
at http://www.cdfifund.gov, at such time that the Fund has the 
authority to implement the FY 2003/04 NOFA for the NACD Program.
    (3) Financial Assistance Component (CDFI Program): Through the 
Financial Assistance Component of the CDFI Program the Fund makes 
financial investments in, and provides 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 and CDFIs that demonstrate the ability to 
effectively leverage private sector sources of capital. The FY 2003 
NOFA for the Financial Assistance Component is published in this issue 
of the Federal Register.
    (4) New Markets Tax Credit Program: Through the NMTC Program, the 
Fund provides an incentive to investors in the form of a tax credit 
over seven years, which is expected to stimulate investment in private 
capital that, in turn, will facilitate economic and community 
development in low-income communities. The calendar year 2003 Notice of 
Allocation Availability for the NMTC Program will be published in the 
Federal Register at a later date.
    (5) Bank Enterprise Award Program: Through the BEA Program, the 
Fund provides financial incentives to insured depository institutions 
for the purpose of promoting investments in, or other support to, CDFIs 
and facilitating increased lending and provision of financial and other 
services in economically distressed communities. The FY 2003 NOFA for 
the BEA Program is published in this issue of the Federal Register.
    The revised interim rule for the CDFI Program (12 CFR 1805) and the 
revised interim rule for the BEA Program (12 CFR 1806) are also 
published in this issue of the Federal Register. Please refer to the 
program regulations for an in-depth understanding of the respective 
programs.
    The following table provides a brief summary of certain aspects 
found in each NOFA for the Fund's components or programs for FY 2003 
and is intended to offer guidance to potential applicants as to which 
components or programs they might be eligible to apply. Please refer to 
each individual NOFA for specific application, eligibility, and 
evaluation information for the particular component or program for FY 
2003.

[[Page 5745]]



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                                          Purpose; types and
         Component or program           amounts of assistance     Eligible applicants     Application deadlines
                                              available
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Technical Assistance Component (CDFI   TA grants to build       CDFIs and other          Applications will be
 Program).                              capacity to share        entities proposing to    accepted and evaluated
                                        target markets; up to    become CDFIs; except     on a first-come, first-
                                        $50,000 per award; up    those that have been     reviewed basis,
                                        to $100,000 per award    previously selected to   beginning with the
                                        for entities             receive in aggregate     date of this NOFA,
                                        principally serving or   over $250,000 in TA or   through May 31, 2004
                                        proposing to serve       FA from the Fund.        (subject to FY 2004
                                        Native American,                                  funding availability).
                                        Alaska Native, or
                                        Native Hawaiian
                                        communities.
Native American CDFI Development       TA grants to build       Entities that are not,   Applications will be
 (``NACD'') Program.                    capacity to create       or will not become       accepted and evaluated
                                        CDFIs to serve target    certified CDFIs but      on a first-come, first-
                                        markets; up to           instead plan to create   reviewed basis,
                                        $100,000 per award.      CDFIs to principally     beginning with the
                                                                 serve Native American,   date of this NOFA,
                                                                 Alaska Native and/or     through May 31, 2004
                                                                 Native Hawaiian          (subject to FY 2003
                                                                 communities.             and 2004 funding
                                                                                          availability).
Financial Assistance Component (CDFI   To (i) address           Category I includes      March 10, 2003.
 Program).                              community development    CDFIs that have
                                        finance needs in ``Hot   capitalization needs
                                        Zones,'' and/or (ii)     up to and including
                                        increase affordable      $1,000,000 and total
                                        homeownership            assets as of December
                                        opportunities,           31, 2002 that range up
                                        increase homeownership   to $250 million (for
                                        opportunities for        insured depository
                                        Other Targeted           institutions and
                                        Populations, generate    depository institution
                                        employment               holding companies), up
                                        opportunities, and/or    to $25 million (for
                                        expand the               insured credit
                                        availability of          unions), or up to $15
                                        financial services to    million for other
                                        people who have not      CDFIs; Category II
                                        previously had a         includes CDFIs with
                                        banking relationship     assets above those
                                        with a financial         ranges and/or that can
                                        institution. FA          effectively deploy
                                        investments (grants,     funding in an amount
                                        loans, equity            in excess of
                                        investments, secondary   $1,000,000, either to
                                        capital accounts,        leverage greater
                                        deposits, credit union   private sector
                                        shares) and TA grants;   resources in support
                                        up to $1,000,000 per     of their lending and
                                        award for Category I     investing activities
                                        CDFIs and up to          (through funding a
                                        $2,000,000 per award     loan loss reserve or
                                        for Category II CDFIs.   credit enhancement),
                                                                 or to develop and
                                                                 effectively provide
                                                                 innovative financial
                                                                 products and services
                                                                 that address the
                                                                 capital needs of
                                                                 particularly
                                                                 underserved markets.
Bank Enterprise Award (``BEA'')        Grants.................  FDIC insured depository  July 17, 2003 for six
 Program.                                                        institutions.            month assessment
                                                                                          period and February
                                                                                          25, 2004 for twelve
                                                                                          month assessment
                                                                                          period.
New Markets Tax Credit (``NMTC'')      Federal tax credits for  Community Development    To be determined.
 Program.                               investors.               Entities, certified by
                                                                 the Fund.
----------------------------------------------------------------------------------------------------------------

    An applicant may only apply for an award through one of the CDFI 
Program Components or the NACD Program, with the sole exception of a 
certified CDFI that applies for funds through the NACD Program in 
collaboration with a Native American Partner (such a CDFI may also 
apply for the CDFI Program, provided that the applications seek funding 
for different activities). While an applicant may receive only one 
award through the CDFI Program, an applicant, its Subsidiaries or 
Affiliates may apply for and receive both a tax credit allocation 
through the NMTC Program and an award through the CDFI Program or the 
NACD Program.

III. Hot Zones and Programmatic Priorities

    Through the FY 2003 NOFA for the Financial Assistance Component of 
the CDFI Program, 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 said term is defined in the FY 2003 NOFA for the 
Financial Assistance Component).
    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 and the Financial Assistance Component 
application.

IV. Funding Availability

    Subject to funding availability, and provided that the Fund deems 
it appropriate, the Fund expects to make funds available for Fiscal 
Year 2003 awards (and FY 2004 awards, as the case may be) as follows:
    (a) Technical Assistance Component: approximately $13 million 
(including approximately $3 million for entities

[[Page 5746]]

serving or proposing to serve Native American, Alaska Native, or Native 
Hawaiian communities) for FY 2003 awards, and approximately $4.5 
million for FY 2004 awards, in appropriated funds;
    (b) NACD Program: approximately $3 million for FY 2003 awards, and 
approximately $1.5 million for FY 2004 awards, in appropriated funds;
    (c) Financial Assistance Component: approximately $30 million for 
FY 203 awards, in appropriated funds; and
    (d) BEA Program: approximately $17 million for FY 2003 awards, and 
approximately $8 million for FY 2004 awards, in appropriated funds.
    The Fund reserves the right to re-allocate funds from the amount 
that is anticipated to be available under any particular NOFA, to other 
Fund programs, particularly if the Fund determines that the number of 
awards made under a particular NOFA(s) is/are fewer than projected 
based on the applications received. The Fund, in its sole discretion, 
reserves the right to award amounts in excess of the anticipated 
maximum award 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 any of the NOFAs.

FOR FURTHER INFORMATION CONTACT: If you have any questions about the 
programmatic requirements for the CDFI Program or the NACD Program, 
contact the Fund's Program Operations Manager. If you have any 
questions about the programmatic requirements for the BEA Program, 
contact the Fund's Depository Institutions Manager. If you have any 
questions about the programmatic requirements for the NMTC Program, 
contact the Fund's Financial Equity Manager. If you wish to request an 
application or have questions regarding administrative requirements for 
any of the Fund's programs, contact the Fund's Awards Manager. The 
Program Operations Manager, the Depository Institutions Manager, the 
Financial Equity 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 to 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. Applications and 
other information regarding the Fund and its programs may be accessed 
and/or downloaded from the Fund's Web site at http://www.cdfifund.gov.

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 the 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. If you do not have Internet access, you may 
register by calling the Fund at (202) 622-8401.

(Catalog of Federal Domestic Assistance: 21.020, 21.021)


    Authority: 12 U.S.C. 1834a; 4703, 4703 note, 4704, 4706, 4707, 
4713, 4717; 31 U.S.C. 321; 12 CFR part 1805; 12 CFR part 1806; 26 
U.S.C. 45D.

    Dated: January 27, 2003.
Tony T. Brown,
Director, Community Development Financial Institutions Fund.
[FR Doc. 03-2341 Filed 2-3-03; 8:45 am]
BILLING CODE 4810-70-P