[Federal Register Volume 69, Number 38 (Thursday, February 26, 2004)]
[Notices]
[Pages 9018-9026]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-4301]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Funding Opportunity Title: Notice of Funds Availability (NOFA) 
Inviting Applications for the FY 2004 Funding Round of the Financial 
Assistance Component of the Community Development Financial 
Institutions Program

    Announcement Type: Initial announcement of funding opportunity.
    Catalog of Federal Domestic Assistance (CDFA) Number: 21.020.
    Dates: Applications must be received by 5 p.m. ET on April 28, 2004 
(see Section IV.D), and must meet all eligibility and other 
requirements and deadlines, as applicable, set forth in this NOFA.
    Executive Summary: This NOFA is issued in connection with the FY 
2004 funding round of the Financial Assistance (FA) Component of the 
Community Development Financial Institutions (CDFI) Program. Through 
the FA Component, the Community Development Financial Institutions Fund 
(the Fund) provides FA awards and 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 purposes. 
Through this NOFA, the Fund makes funding available through three 
categories: (i) Category I/Small and Emerging CDFI Assistance (SECA); 
(ii) Category II/Core & Sustainable CDFIs Assistance (Core); and (iii) 
Category III/Financial Leverage and Market Expansion Assistance (FLOW).

I. Funding Opportunity Description

    Through this NOFA, the Fund intends to target its resources by 
providing (i) FA awards to CDFIs that will use FA award proceeds to 
achieve the Programmatic Priorities, in the rank order set forth below, 
and (ii) TA grants to build awardee capacity to serve Target Markets.
    A. Programmatic Priorities: Please note that Programmatic 
Priorities 1-4 are listed in order of priority for awards; the related 
activities are not in listed in priority order. Applicants may apply 
and be considered for funding for more than one type of Programmatic 
Priority and activity.

[[Page 9019]]



------------------------------------------------------------------------
       Programmatic priority                     Activities
------------------------------------------------------------------------
Priority 1........................  [sbull] Affordable Housing in
                                     Housing Hot Zones and/or for Other
                                     Targeted Populations.
                                    [sbull] Economic Development (other
                                     than Community Organization
                                     Support) in Economic Development
                                     Hot Zones and/or for Other Targeted
                                     Populations.
                                    [sbull] Community Development
                                     Financial Services in Economic
                                     Development Hot Zones and/or
                                     Housing Hot Zones.
Priority 2........................  [sbull] Affordable Housing in
                                     Economic Development Hot Zones and/
                                     or other Investment Areas, and/or
                                     for Low-Income Targeted
                                     Populations.
                                    [sbull] Economic Development (other
                                     than Community Organization
                                     Support) in other Investment Areas
                                     and/or for Low-Income Targeted
                                     Populations.
                                    [sbull] Community Development
                                     Financial Services for Low-Income
                                     Targeted Populations and/or Other
                                     Targeted Populations.
Priority 3........................  [sbull] Community Development
                                     Financial Services in Investment
                                     Areas (other than Hot Zones).
                                    [sbull] Community Organization
                                     Support.
Priority 4........................  [sbull] Other activities as
                                     requested by the applicant and
                                     deemed appropriate by the Fund.
------------------------------------------------------------------------

    B. CDFI Program Regulations: The interim rule governing the CDFI 
Program can be found at 12 CFR part 1805 and provides guidance on 
evaluation criteria and other requirements of the CDFI Program. The 
Fund expects to issue a revised interim rule in the very near future. 
The Fund encourages applicants to review the interim rule and its 
revision, when published.
    C. Definitions: All defined terms in this NOFA shall have the 
meanings ascribed to them in the interim rule. For purposes of this 
NOFA, certain terms in the Programmatic Priority chart above are 
defined as following:
    (i) Affordable Housing includes activities that: (A) Promote the 
supply of housing through the provision of pre-development financing, 
construction and rehabilitation financing, and related Development 
Services, and/or (B) increase homeownership through the provision of 
first mortgage financing, subordinated mortgages (for home purchase and 
rehabilitation), and related Development Services.
    (ii) Community Development Financial Services include Financial 
Services, financial education and other Development Services, 
appropriate consumer loans, and re-financing of predatory loans.
    (iii) Community Facilities: see 12 CFR 1805.104(j).
    (iv) Community Organization Support includes: Financial Products 
(see 12 CFR 1805.104(t)) related to the acquisition, construction, 
development, or rehabilitation of Community Facilities; business loans 
to non-profit organizations; and related Development Services, to non-
profit organizations.
    (v) Development Services: see 12 CFR 1805.104(r).
    (vi) Economic Development includes: Activities that support the 
creation and retention of jobs and the growth of businesses through (i) 
loans, Equity Investments and other similar financing to for-profit 
small businesses, microenterprises, and commercial real estate other 
than Community Facilities, (ii) related Development Services, and (iii) 
Community Organization Support.
    (vii) Financial Services: see 12 CFR 1805.104(u).
    (viii) Hot Zones (and the Fund's methodology for Hot Zone 
designation) are subsets of Investment Areas and are identified at the 
Fund's Web site at http://www.cdfifundhelp.gov. For purposes of this 
NOFA, Hot Zones include Economic Development Hot Zones, Housing Hot 
Zones, and a combination thereof.
    (ix) Investment Areas: see 12 CFR 1805.104(cc).
    (x) Low-Income Targeted Populations: see 12 CFR 1805.104(dd) and 
(ii).
    (xi) Other Targeted Populations include 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 (for further description, see 
Eligibility section, below).

II. Award Information

    A. Award Information: Subject to funding availability, the Fund 
expects that it may award approximately $45 million in appropriated 
funds under this NOFA. The Fund reserves the right to award in excess 
of $45 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 (i) up to and including $300,000 per 
award for Category I/SECA CDFIs; (ii) up to and including $1,000,000 
per award for Category II/Core CDFIs; and (iii) up to and including 
$2,000,000 per award for Category III/FLOW CDFIs. The Fund, in its sole 
discretion, reserves the right to award amounts in excess of or less 
than 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 to re-allocate funds from the 
amount that is anticipated to be available under this NOFA to other 
Fund programs.
    B. Types of Awards: An applicant may submit an application either 
for FA only, or for FA and a TA grant, under this NOFA. While the FA 
Component offers TA grants in conjunction with FA awards, entities 
seeking TA grants only should apply for funds through the Technical 
Assistance Component of the CDFI Program. The FY 2003 NOFA for the 
Technical Assistance Component was published in the Federal Register on 
February 4, 2003 (68 FR 5735).
    1. FA Awards: (a) Types of FA awards: 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: (i) To provide FA in a form 
and amount other than that which is requested by an applicant; (ii) to 
offer TA for specified purposes, even if the applicant has not 
requested TA; and/or (iii) to condition the awarding of FA on the 
applicant agreeing to use TA for specified purposes.
    (b) For any Category I/SECA applicant that does not meet certain 
minimum evaluation criteria and thus is ineligible for a FA award, the 
Fund may offer, in its sole discretion, the opportunity for the 
applicant to submit certain additional documentation demonstrating the 
need for a TA-only award from the TA Component, which the Fund may 
provide in amounts and for uses the Fund deems appropriate, subject to 
funding availability.
    2. TA Grants: TA awards are in the form of grants. The Fund 
reserves the right, in its sole discretion, to provide a TA grant for 
uses and amounts other than that which are requested by an

[[Page 9020]]

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 capacity to provide greater community development 
impact. Capacity enhancements may address a range of activities 
including, but not limited to, improvement of underwriting and 
portfolio management, development of outreach and training strategies 
to enhance product delivery, and tools that allow the applicant to 
assess the impact of its activities in its community.
    Eligible types of TA grant uses include, but are not limited to, 
the following: (i) Acquiring consulting services; (ii) paying staff 
salary for the limited purposes of completing tasks and/or fulfilling 
functions that are otherwise eligible TA grant uses under this NOFA; 
(iii) acquiring/enhancing technology items, including computer 
hardware, software and Internet connectivity; and (iv) 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.
    C. Notice of Award; Assistance Agreement: Each awardee under this 
NOFA must sign a Notice of Award (for further information, see Section 
VI.A, below) and an Assistance Agreement (see Section VI.B, below) 
prior to disbursement by the Fund of award proceeds. The Notice of 
Award and the Assistance Agreement contain the terms and conditions of 
the award.

III. Eligibility Information

    A. Eligible Applicants: The interim rule specifies 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. Applicant Categories: The FA Component is designed to address 
the capitalization and liquidity needs of three types of CDFIs:

------------------------------------------------------------------------
                                                      What can it apply
     Applicant category             Criteria                for?
------------------------------------------------------------------------
Category I: Small and         A Category I/SECA     A Category I/SECA
 Emerging CDFIs Assistance     applicant is a CDFI   applicant may
 (SECA).                       that:                 request up to and
                              Has total assets as    including $300,000
                               of December 31,       in FA or FA/TA.
                               2003 as follows:.
                              [sbull] Insured
                               Depository
                               Institutions and
                               Depository
                               Institution Holding
                               Companies: up to
                               $100 million.
                              [sbull] Insured
                               Credit Unions: up
                               to $10 million
                              [sbull] Venture
                               capital funds: up
                               to $10 million.
                              [sbull] Other CDFIs:
                               up to $5 million.
 
                               OR
 
                              Did not begin
                               operations prior to
                               April 15, 2001
 
                               AND
 
                              Prior to the date of
                               application under
                               this NOFA, has not
                               been selected to
                               receive any
                               award(s) under the
                               CDFI Program that
                               total in the
                               aggregate an amount
                               greater than
                               $300,000
Category II: Core &           A Category II/Core    A Category II/Core
 Sustainable CDFIs             applicant is a CDFI   applicant may
 Assistance (Core).            that has total        request up to and
                               assets as of          including $1
                               December 31, 2003     million in FA or FA/
                               as follows:           TA.
                              [sbull] Insured
                               Depository
                               Institutions and
                               Depository
                               Institution Holding
                               Companies: up to
                               $500 million.
                              [sbull] Insured
                               Credit Unions: up
                               to $25 million.
                              [sbull] Other CDFIs:
                               up to $25 million.
Category III: Financial       A Category III/FLOW   A Category III/FLOW
 Leverage and Market           applicant is a CDFI   applicant may
 Expansion Assistance (FLOW).  that has total        request up to and
                               assets as of          including $2
                               December 31, 2003     million in FA or FA/
                               as follows:           TA.
                              [sbull] Insured
                               Depository
                               Institutions and
                               Depository
                               Institution Holding
                               Companies: $500
                               million and greater.
                              [sbull] Insured
                               Credit Unions: $25
                               million and greater.
                              [sbull] Other CDFIs:
                               $25 million and
                               greater.
------------------------------------------------------------------------

    An applicant of any size or age can apply for a higher amount of 
funding by applying in a higher-numbered Category. Applicants will be 
evaluated and ranked with all other applicants; however, in an effort 
to achieve an awardee pool that reflects a blend of emerging and mature 
CDFIs of varying asset sizes, the Fund will evaluate

[[Page 9021]]

Category I/SECA applicants using more flexible review standards.
    2. CDFI Certification: For purposes of NOFA, an application for an 
award will not be considered unless:
    (a) The applicant is already certified as a CDFI, with a 
certification expiration date on or after December 31, 2004. Please 
note: The Fund provided a number of CDFIs with certifications expiring 
in 2003 and 2004 with notification that their certification had been 
extended. The Fund will consider the extended certification date (the 
later date) to determine whether those CDFIs meet this eligibility 
requirement; or
    (b) The Fund receives from an applicant a complete CDFI 
certification application no later than March 31, 2004, evidencing that 
the applicant can be certified as a CDFI. Applicants may obtain CDFI 
certification applications through the Fund's Web site at http://www.cdfifund.gov. Applications for certification must be submitted as 
instructed in the application form.
    3. Prior Awardees: Applicants must be aware that success in a prior 
round of any of the Fund's programs 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 prior funding round of the CDFI Program, Native American CDFI 
Technical Assistance (NACTA) Program, or Native American CDFI 
Development (NACD) Program funding round, but that has not submitted a 
CDFI certification application nor been certified as a CDFI, is not 
eligible to receive funding under this NOFA (see CDFI 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. For the 
purposes of this NOFA, the three-year period extends back from the date 
of obligation under the NOFA. The Fund will deem the date of the Fund's 
obligation of assistance to an organization as evidenced by the date 
that the Fund has signed the Notice of Award issued to an awardee.
    (c) The Fund will not consider an application submitted by an 
applicant that is a prior Fund awardee under any Fund program if the 
applicant is not current on its reporting requirements, set forth in 
the previously executed assistance or award agreement(s), as of the 
application deadline of this NOFA. Further, an entity is not eligible 
to apply for an award pursuant to this NOFA if another entity that 
Controls the applicant, is Controlled by the applicant or shares common 
management officials with the applicant (as determined by the Fund), is 
a prior Fund awardee under any Fund program and is not current on its 
reporting requirements, set forth in the previously executed assistance 
or award agreement(s), as of the application deadline of this NOFA.
    (d) The Fund will not consider an application submitted by an 
applicant that is a previous Fund awardee under any Fund program if the 
applicant has received (or receives at any time prior to entering into 
an assistance agreement under this NOFA) written notification from the 
Fund that it is in default of a previously executed assistance 
agreement(s) and/or it has been barred from applying to the Fund for 
this funding round. Additionally, prior awardees whose awards 
terminated in default status during the period from October 1, 2002 
through September 30, 2003, will be found to be ineligible under this 
NOFA. Prior awardees whose awards terminated in default status prior 
October 1, 2002 may be eligible under this NOFA if other eligibility 
requirements are met. Further, an entity is not eligible to apply for 
an award pursuant to this NOFA if another entity that Controls the 
applicant, is Controlled by the applicant or shares common management 
officials with the applicant (as determined by the Fund), is a prior 
Fund awardee under any Fund program, has received (or receives at any 
time prior to entering into an assistance agreement under this NOFA) 
written notification from the Fund that it is in default of a 
previously executed assistance agreement(s) and/or it has been barred 
from applying to the Fund for this funding round, and/or has an 
award(s) that terminated in default status during the period from 
October 1, 2002 through September 30, 2003.
    (e) The Fund will not consider an application submitted by an 
applicant that is a prior Fund awardee under any Fund program if the 
applicant has a balance of undisbursed funds (defined below) under said 
prior award(s), as of the application deadline of this NOFA. Further, 
an entity is not eligible to apply for an award pursuant to this NOFA 
if another entity that Controls the applicant, is Controlled by the 
applicant or shares common management officials with the applicant (as 
determined by the Fund), is a prior Fund awardee under any Fund 
program, and has a balance of undisbursed funds under said prior 
award(s), as of the application deadline of this NOFA. For the purposes 
of this section, ``undisbursed funds'' is defined as: (i) In the case 
of prior Bank Enterprise Award (BEA) Program award(s), any balance of 
award funds equal to or greater than five percent of the total prior 
BEA Program award(s) that remains undisbursed more than three (3) years 
after the date that the Fund signed an award agreement with the 
awardee, and (ii) in the case of prior CDFI Program or other Fund 
program award(s), any balance of award funds equal to or greater than 
five percent of the total prior award(s) that remains undisbursed more 
than two (2) years after the effective date of an assistance agreement 
with the Fund. In the case where another entity Controls the applicant, 
is Controlled by the applicant or shares common management officials 
with the applicant (as determined by the Fund), is a prior Fund awardee 
under any Fund program, and has a balance of undisbursed funds under 
said prior award(s), as of the application deadline of this NOFA, the 
Fund will include the combined awards of the applicant and its 
affiliates when calculating the amount of undisbursed funds.
    (f) Accordingly, applicants that are prior awardees under any Fund 
program are advised to: (i) Comply with requirements specified in award 
and/or assistance agreement(s), and (ii) contact the Fund to ensure 
that all necessary actions are underway for the disbursement of any 
outstanding balance of a prior award(s). All outstanding reports, 
compliance or disbursement questions should be directed to the Grants 
Management and Compliance Manager by e-mail at [email protected]; by 
telephone at (202) 622-8226; by facsimile at (202) 622-6453; or by mail 
to CDFI Fund, 601 13th Street, NW., Suite 200 South, Washington, DC 
20005. The Fund will respond to applicants' reporting, compliance or 
disbursement questions between the hours of 9 a.m. and 5 p.m. ET, 
starting the date of the publication of this NOFA through April 26, 
2004 (2 days before the application deadline). The Fund will not 
respond to applicants' reporting, compliance or disbursement phone 
calls or e-mail inquiries that are received after 5 p.m. on April 26, 
2004 until after the funding application deadline of April 28, 2004.
    4. Eligibility Appeals. Any applicant that is found to be 
ineligible for funding through this NOFA on the grounds of late reports 
or undisbursed balances, and that believes that such factual 
determination was made in error, may appeal said decision by notifying 
the Fund's Grants Management and Compliance Manager in writing or by e-
mail (at [email protected], Attention: GMC Manager). Such appeals 
must be received by the Fund within five business days of the date of 
the declination letter and must provide

[[Page 9022]]

documented evidence to contradict the Fund's finding. Only one such 
appeal per applicant may be made.
    5. Limitation on FA Awards: An applicant may receive only one FA 
award through either the FA Component or the Native American CDFI 
Assistance (NACA) Program. A FA Component applicant, its subsidiaries 
or affiliates also may apply for and receive: (i) A tax credit 
allocation through the New Markets Tax Credit (NMTC) Program, but only 
to the extent that the activities approved for FA Component awards are 
different from those activities for which the applicant receives a NMTC 
Program allocation; (ii) an award through the BEA Program (subject to 
certain limitations; refer to the revised interim rule at 12 CFR 
1805.102); and (iii) an award through the TA Component of the CDFI 
Program, the NACTA Program and/or the NACD Program, but only to the 
extent that the activities approved for a FA award are different from 
those for which the applicant receives a TA, NACTA and/or NACD award.
    6. 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.
    B. Matching Funds: 1. Matching Funds Requirements in General: 
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 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). 
Funds used by an applicant as matching funds for a prior award under 
the CDFI Program or under another Federal grant or award program cannot 
be used to satisfy the matching funds requirement of this NOFA. If an 
applicant seeks to use as matching funds monies received from an 
organization that was a prior 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. An applicant using matching funds from an affiliated 
entity must be able to demonstrate that the affiliated entity received 
funds in the same amount and in the same form from an eligible, non-
affiliated source within the eligible matching funds window, described 
below.
    2. Matching Funds Requirements Per Category: Due to funding 
constraints and the desire to quickly deploy Fund dollars, the Fund 
will not consider for FA funding any applicant that does not 
demonstrate any matching funds committed or in-hand as of the 
application deadline under this NOFA. Specifically, FA applicants must 
meet the following matching funds requirements:
    (a) Category I/SECA applicants: The Fund expects Category I/SECA 
applicants to demonstrate no less than 30 percent of matching funds 
requested as in-hand or firmly committed as of the application 
deadline. Matching funds in-hand (received) or firm commitments for 
matching funds made, on or after January 1, 2002, and on or before 
April 30, 2005, will be considered when determining matching funds 
eligibility. The Fund reserves the right to rescind all or a portion of 
a FA award and re-allocate the rescinded award amount to other 
qualified applicant(s), if an applicant fails to obtain in-hand the 
required matching funds by April 30, 2005 (with required documentation 
of such receipt received by the Fund not later than May 13, 2005), or 
to grant an extension of such matching funds deadline for specific 
applicants selected to receive FA, if the Fund deems it appropriate. 
For any applicant that demonstrates that it has less than 100 percent 
of matching funds in-hand or firmly committed as of the application 
deadline, the Fund will evaluate the applicant's ability to raise the 
remaining matching funds by April 30, 2005.
    (b) Category II/Core and Category III/FLOW applicants: The Fund 
expects that FA award amounts will not exceed 100 percent of matching 
funds demonstrated in the application as in-hand or firmly committed as 
of the application deadline. Matching funds in-hand (received) or firm 
commitments for matching funds made, on or after January 1, 2002, and 
on or before April 30, 2005, will be considered when determining 
matching funds eligibility. The Fund reserves the right to rescind all 
or a portion of a FA award and re-allocate the rescinded award amount 
to other qualified applicant(s), if an applicant fails to obtain in-
hand the required matching funds by April 30, 2005 (with required 
documentation of such receipt received by the Fund not later than May 
13, 2005), or to grant an extension of such matching funds deadline for 
specific applicants selected

[[Page 9023]]

to receive FA, if the Fund deems it appropriate.
    3. 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.
    4. Please note that the revised interim rule allows an insured 
credit union to use retained earnings to serve as matching funds for a 
FA grant in an amount equal to: (i) The increase in retained earnings 
that have occurred over the applicant's most recent fiscal year; (ii) 
the annual average of such increases that have occurred over the 
applicant's three most recent fiscal years; or (iii) the entire 
retained earnings that have been accumulated since the inception of the 
applicant or such other financial measure as may be specified by the 
Fund. For purposes of this NOFA, if option (iii) is used, the applicant 
must increase its member and/ or non-member shares or total loans 
outstanding by an amount that is equal to the amount of retained 
earnings that is committed as matching funds. This amount must be 
raised by April 30, 2005.

IV. Application and Submission Information

    A. Address to Request Application Package: Applicants may submit 
applications under this NOFA either electronically or in paper form. 
Shortly following the publication of this NOFA, the Fund will make 
available the FY 2004 electronic application on its Web site at http://www.cdfifund.gov. Paper applications may be obtained through the Fund 
in the manner described in Section IV.C.2, below.
    B. Content Application Submission: Detailed application content 
requirements are found in the application related to this NOFA. 
Applicants must submit all materials described in and required by the 
application. Electronic applications must be submitted solely by using 
the format made available at the Fund's Web site. Additional 
information, including instructions relating to the submission of 
signature forms and supporting information, is set forth in further 
detail in the electronic application. Please note that, pursuant to OMB 
guidance (68 FR 38402), each applicant must provide, as part of its 
application submission, a Dun and Bradstreet Data Universal Numbering 
System (DUNS) number. In addition, each application must include a 
valid and current Employer Identification Number, issued by the 
Internal Revenue Service. Incomplete applications will be rejected and 
returned to the sender.
    C. Form of Application Submission: Applicants may submit 
applications under this NOFA either electronically or in paper form. In 
order to expedite application review, the Fund expects applicants to 
submit applications electronically (via an Internet-based application) 
in accordance with 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. Applications 
sent by facsimile or by e-mail will not be accepted.
    1. Electronic Applications: Electronic applications must be 
submitted solely by using the format made available at the Fund's Web 
site. Applicants 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. Additional information, including instructions relating 
to the submission of signature forms and supporting information, is set 
forth in further detail in the electronic application.
    2. Paper Applications: 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 March 
31, 2004. The request must contain the applicant's name; the name and 
phone number of a contact person; a mailing address (a street address 
for courier or overnight service deliveries); 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.
    D. Application Submission Dates and Times: 1. Application 
Deadlines: The deadline for receipt of applications is 5 p.m. ET on 
April 28, 2004. Applications and other required documents and other 
attachments received after these dates and times will be rejected and 
returned to the sender. Please note that the document submission 
deadlines in this NOFA and/or the funding application are strictly 
enforced. The Fund will not grant exceptions or waivers for late 
delivery of documents including, but not limited to, late delivery that 
is caused by third parties such as the U.S. mail, couriers or overnight 
delivery services. [FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][NOTICES][NOTICE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/SUBJECT]
    a. Paper applications must be received in their entirety by this 
time and date, including an original signature page, a letter or other 
documentation from the Internal Revenue Service confirming the 
applicant's Employer Identification Number (EIN), and all other 
required paper attachments.
    b. Electronic applications must be received by this date and time. 
In addition, applicants that submit electronic applications must 
separately (by mail or other courier/delivery service) submit an 
original signature page, a letter or other documentation from the 
Internal Revenue Service confirming the applicant's Employer 
Identification Number (EIN), and all other required paper attachments 
not later than 5 p.m. ET on May 5, 2004. See application instructions, 
provided in the electronic application, for further detail. 
Applications and other required documents and other attachments 
received after these dates and times will be rejected and returned to 
the sender.
    E. Intergovernmental Review: Not applicable.
    F. Funding Restrictions: For allowable uses of FA award proceeds, 
please see the interim rule, 12 CFR 1805.301. Please see Section I.A, 
above, for the Programmatic Priorities of this NOFA.
    G. Other Submission Requirements:
    1. Addresses: Paper applications must be sent to: CDFI Fund Grants 
Management and Compliance Manager, FA Component, Bureau of Public Debt, 
200 Third Street, Room 10, Parkersburg, WV 26101. The telephone number 
to be used in conjunction with overnight delivery or mailings to this 
address is (304) 480-5450. Applications and attachments will not be 
accepted at the Fund's offices in Washington, DC. Applications and 
attachments 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 website and must be sent in accordance with 
the submission instructions provided in the electronic application 
form.

V. Application Review Information

    A. Criteria: The Fund will evaluate each application, assigning 
points and numeric scores with respect to the following three criteria 
categories:
    1. Market Need and Community Development Performance (comprising 50 
percent of possible points), including an evaluation of:

[[Page 9024]]

    (a) Market need: 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 
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) Programmatic Priorities: the extent to which the applicant 
demonstrates that it will target its activities to the Fund's 
Programmatic Priorities. Pursuant to the ranking of Programmatic 
Priorities, highly qualified applicants, meaning those with passing 
scores in the other sections of the application, that propose to 
conduct Priority 1 activities, will receive higher scores in the Market 
Need and Community Development Performance section than comparable 
applicants that propose to conduct Priority 2 activities; those that 
propose to conduct Priority 2 activities will receive higher scores 
than those that propose to conduct Priority 3 activities; and those 
that propose to conduct Priority 3 activities will receive higher 
scores than those that propose to conduct Priority 4 activities;
    (c) Community development performance/impact: (i) The applicant's 
track record and the likelihood of its 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); (ii) 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); 
(iii) 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); (iv) likely 
effectiveness of the proposed use of Fund dollars; and (v) 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.
    (d) Additional considerations:
    (i) Category III/FLOW applicants will be evaluated on their plans 
to leverage greater private sector resources directly or indirectly in 
support of their lending and investing activities (such as through 
funding a loan loss reserve or credit enhancement), or into their 
Target Markets, or develop and effectively provide innovative financial 
products and services that address the capital needs of markets that 
are particularly underserved by traditional financial services 
institutions.
    (ii) In the case of an applicant that has previously received 
funding from the Fund through the BEA Program, CDFI Program, the NACD 
Program or the NACTA Program, the Fund will consider the extent and 
effectiveness to which the applicant has used previous assistance from 
the Fund and the community development impact that will be created with 
new Fund assistance over and above benefits created by previous Fund 
assistance.
    (iii) The Fund will take into consideration the Community 
Reinvestment Act (CRA) rating of any applicant that is an Insured 
Depository Institution or Depository Institution Holding Company. The 
Fund will not approve a Financial Assistance award to any applicant 
that does not currently have at least a ``Satisfactory'' CRA rating.
    2. Management and Underwriting (comprising 25 percent of possible 
points), including an evaluation of:
    (a) Portfolio quality: the applicant's underwriting and portfolio 
quality;
    (b) Management controls: including risk mitigation strategies; and
    (c) Management team: the capacity, skills and experience of the 
applicant's management team as appropriate to deliver the proposed 
products and services and manage compliance with the Fund's reporting 
requirements.
    3. Financial Health and Viability (comprising 25 percent of 
possible points), including an evaluation of:
    (a) Financial track record: The applicant's liquidity and other 
elements of financial strength, including earnings, capital adequacy, 
and deployment of resources;
    (b) Financial projections: the applicant's projected financial 
health, including its ability to raise operating support from sources 
other than the Fund and its capitalization strategy; and
    (c) Safety and Soundness: The Fund will not approve FA to any 
Insured Credit Union (other than a State-insured credit union) or 
Insured Depository Institution applicant that has a CAMEL rating that 
is higher than a ``3'' or for which its Appropriate Federal Banking 
Agency indicates it has safety and soundness concerns, unless the 
Appropriate Federal Banking Agency asserts, in writing, that (i) an 
upgrade to a CAMEL 3 rating or better (or other improvement in status) 
is imminent and (ii) such upgrade is expected to occur not later than 
September 30, 2004 or within such other time frame deemed acceptable by 
the Fund.
    B. Review and Selection Process: All applications will be reviewed 
for eligibility and completeness. To be complete, the application must 
contain, at a minimum, all information described as required in the 
application form. An incomplete application will be rejected as 
incomplete and returned to the sender.
    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 CDFI Program regulations, this 
NOFA and the application. First, the Fund will determine whether the 
applicant has a need for capital (for Financial Products, reserves, 
Development Services, or Financial Services), based on the applicant's 
projections of capital available and activities projected. Applicants 
not projecting a need for capital will not be considered for FA. Next, 
the Fund will determine whether the applicant has matching funds in-
hand and/or firmly committed. If there are no matching funds documented 
as in-hand or firmly committed, the applicant will not be considered 
for FA.
    In the case of an applicant that has previously received funding 
from the Fund through any Fund program, the Fund will consider and will 
deduct points for: (i) The applicant's noncompliance with any active 
award or award that terminated in calendar year 2003, in meeting its 
performance goals, financial soundness covenants (if applicable), 
reporting deadlines and other requirements set forth in the assistance 
or award agreement(s) with the Fund during the applicant's two complete 
fiscal years prior to the application deadline of this NOFA (generally 
FY 2002 and 2003); and (ii) the applicant's failure to make timely loan 
payments to the Fund during the applicant's two complete fiscal years 
prior to the application deadline of this NOFA. Additionally, the Fund 
may take into account performance on any prior assistance agreement as 
part of the overall assessment of the applicant's ability to carry out 
its Comprehensive Business Plan. All outstanding reports or compliance 
questions should be

[[Page 9025]]

directed to the Grants Management and Compliance Manager by e-mail at 
[email protected]; by telephone at (202) 622-8226; by facsimile at 
(202) 622-6453; or by mail to CDFI Fund, 601 13th Street, NW., Suite 
200 South, Washington, DC 20005. The Fund will respond to reporting or 
compliance questions between the hours of 9 a.m. and 5 p.m. ET, 
starting the date of the publication of this NOFA through April 26, 
2004 (2 days before the application deadline). The Fund will not 
respond to reporting or compliance phone calls or e-mail inquiries that 
are received after 5 p.m. on April 26, 2004 until after the funding 
application deadline of April 28, 2004.
    The Fund shall 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. 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.
    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 
Insured CDFIs, the selecting official will take into consideration the 
views of the Appropriate Federal Banking Agencies; in the case of 
State-insured credit unions, the Fund may consult with the appropriate 
State banking agencies (or comparable entity). 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. All applicants that are not selected for awards based on 
substantive issues will be given the opportunity to obtain 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 its eligibility and 
evaluation criteria and procedures, if the Fund deems it appropriate; 
if said changes materially affect the Fund's award decisions, the Fund 
will provide information regarding the changes through the Fund's 
website.

VI. Award Administration Information

    A. 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 in default 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.
    B. Assistance Agreement: Each applicant that is selected to receive 
an award under this NOFA must enter into an Assistance Agreement with 
the Fund prior to disbursement of award proceeds. The Assistance 
Agreement will set forth certain required terms and conditions of the 
award, which will include, but not be limited to, (i) the amount of the 
award; (ii) the type of award; (iii) the approved uses of the award; 
(iv) the approved Target Market to which the funded activity must be 
targeted; (v) performance goals and measures; and (vi) 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, and/or provide the 
Fund with any other requested documentation, within the deadlines set 
by the Fund.
    In addition to entering into an Assistance Agreement, each awardee 
that receives an award either (i) in the form of a loan, Equity 
Investment, credit union shares/deposits, or secondary capital, in any 
amount, or (ii) 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: (A) Is duly formed and in 
good standing in the jurisdiction in which it was formed and/or 
operates; (B) has the authority to enter into the Assistance Agreement 
and undertake the activities that are specified therein; and (C) 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. All other awardees must provide the Fund with a 
good standing certificate (or equivalent documentation) from their 
state (or jurisdiction) of incorporation.
    C. Administrative and Policy Requirements: (a) Performance Rating: 
PLUM: In order to better manage its portfolio of awards, the Fund is 
developing a performance rating system, called PLUM, which will rate 
each CDFI according to its overall financial strength and potential for 
creating community development impact. Initially, PLUM will serve as 
the Fund's internal 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 currently is conducting the analyses 
needed to identify appropriate peer groups and target ranges for each 
indicator. 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 2004 Financial Assistance Component 
application. Each CDFI will have access to its own PLUM rating.
    (b) Fees: 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

[[Page 9026]]

any such fee, the Fund will publish additional information concerning 
the nature and amount of the fee.
    D. Reporting: (a) Reporting Requirements: The Fund will collect 
information, on at least an annual basis, from all CDFI Program 
awardees including, but not limited to, an Annual Report that comprises 
the following components: (i) Financial Report; (ii) Performance Goals 
Report/Annual Survey; (iii) Financial Status Report (for TA awardees); 
(iv) Uses of Financial Assistance and Matching Funds Report; and (v) 
Explanation of Noncompliance (as applicable). Awardees are responsible 
for the timely and complete submission of the Annual Report, even if 
all or a portion of the documents actually are completed by another 
entity or signatory to the Assistance Agreement. If such other entities 
or signatories are required to provide Annual Surveys or Financial 
Reports, or other documentation that the Fund may require, the awardee 
is responsible for ensuring that the information is submitted timely 
and complete. The Fund reserves the right to contact such additional 
signatories to the Assistance Agreement and require that additional 
information and documentation be provided. The Fund will use such 
information to monitor each awardee's compliance with the requirements 
set forth in the Assistance Agreement and to assess the impact of the 
CDFI Program. The Performance Goals Report/Annual Survey must be 
submitted through the Fund's new web-based data collection system, the 
Community Investment Impact System (CIIS). All other components of the 
Annual Report may be submitted to the Fund in paper form. CIIS is 
currently under development and is expected to be operational in April 
2004. 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 notice to awardees.
    (b) 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 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.

VII. Agency Contacts

    The Fund will respond to questions and provide support concerning 
this NOFA and the funding application between the hours of 9 a.m. and 5 
p.m. ET, starting the date of the publication of this NOFA through 
April 26, 2004 (2 days before the application deadline). The Fund will 
not respond to questions or provide support concerning the application 
that are received after 5 p.m. ET on April 26, 2004, until after the 
funding application deadline of April 28, 2004.
    A. Information Technology Support: Technical support can be 
obtained by calling (202) 622-2455 or by e-mail at 
[email protected]. People who have visual or mobility 
impairments that prevent them from creating Hot Zone or Investment Area 
maps using the Fund's website should call (202) 622-2455 for 
assistance. These are not toll free numbers.
    B. Programmatic Support: If you have any questions about the 
programmatic requirements of this NOFA, contact the Fund's Program 
Operations Manager 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.
    C. Administrative Support: If you have any questions regarding the 
administrative requirements of this NOFA, contact the Fund's Grants 
Management and Compliance Manager by e-mail at [email protected], 
by telephone at (202) 622-8226, by facsimile at (202) 622-6453, or by 
mail at CDFI Fund, 601 13th Street, NW., Suite 200 South, Washington, 
DC 20005. These are not toll free numbers.

VIII. Information Sessions and Outreach

    In connection with the Fiscal Year 2004 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 Fund's programs. 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) 622-9046.

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

    Dated: February 23, 2004.
Tony T. Brown,
Director, Community Development Financial Institutions Fund.
[FR Doc. 04-4301 Filed 2-25-04; 8:45 am]
BILLING CODE 4810-70-U