[Federal Register Volume 69, Number 174 (Thursday, September 9, 2004)]
[Notices]
[Pages 54718-54725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20460]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Funding Opportunity Title: Notice of Funds Availability (NOFA) 
Inviting Applications for the FY 2005 and FY 2006 Funding Rounds of the 
Bank Enterprise Award (BEA) Program

    Announcement Type: Initial announcement of funding opportunity.
    Catalog of Federal Domestic Assistance (CDFA) Number: 21.021.
    Dates: Applications for the FY 2005 funding round must be received 
by 5 p.m. e.s.t. on February 14, 2005 and applications for the FY 2006 
funding round must be received by 5 p.m. e.s.t. on February 14, 2006. 
Applications must meet all eligibility and other requirements and 
deadlines, as applicable, set forth in this NOFA. Applications received 
after 5 p.m. e.s.t. on the applicable deadline will be rejected and 
returned to the sender.
    Executive Summary: This NOFA is issued in connection with the FY 
2005 and FY 2006 funding rounds of the BEA Program. Through the BEA 
Program, the Community Development Financial Institutions Fund (the 
Fund) encourages Insured Depository Institutions to increase their 
levels of loans, investments, services, and technical assistance within 
Distressed Communities, and financial assistance to Community 
Development Financial Institutions (CDFIs) through grants, stock 
purchases, loans, deposits, and other forms of financial and technical 
assistance, during a specified period.

I. Funding Opportunity Description

A. Baseline Period and Assessment Period Dates

    A BEA Program award is based on an Applicant's increases in 
Qualified Activities from the Baseline Period to the Assessment Period. 
For the FY 2005 funding round, the Baseline Period is calendar year 
2003 (January 1, 2003 through December 31, 2003), and the Assessment 
Period is calendar year 2004 (January 1, 2004 through December 31, 
2004). For the FY 2006 funding round, the Baseline Period is calendar 
year 2004 (January 1, 2004 through December 31, 2004), and the 
Assessment Period is calendar year 2005 (January 1, 2005 through 
December 31, 2005).

B. Program Regulations

    The regulations governing the BEA Program can be found at 12 CFR 
part 1806 (the Interim Rule) and provide guidance on evaluation 
criteria and other requirements of the BEA Program. The Fund encourages 
Applicants to review the Interim Rule. Detailed application content 
requirements are found in the application related to this NOFA. Each 
capitalized term in this NOFA is more fully defined either in the 
Interim Rule or the application.

C. Qualified Activities

    Qualified Activities are defined in the Interim Rule to include 
CDFI Related Activities, Distressed Community Financing Activities, and 
Service Activities (12 CFR 1806.103(mm)). CDFI Related Activities 
include Equity Investments, Equity-Like Loans, and CDFI Support 
Activities (12 CFR 1806.103(p)). Distressed Community Financing 
Activities include Affordable Housing Loans, Affordable Housing 
Development Loans and related Project Investments; Education Loans; 
Commercial Real Estate Loans and related Project Investments; Home 
Improvement Loans; and Small Business Loans and related Project 
Investments (12 CFR 1806.103(u)). Service Activities include Deposit 
Liabilities, Financial Services, Community Services, Targeted Financial 
Services, and Targeted Retail Savings/Investment Products (12 CFR 
1806.103(oo)).
    When calculating BEA Program award amounts, the Fund will count 
only the amount an Applicant reasonably expects to disburse for a 
Qualified Activity within 12 months from the end of the Assessment 
Period. Subject to the exception outlined in Section I.G.1. of this 
NOFA, in no event shall the value of a Qualified Activity for purposes 
of determining a BEA Program award

[[Page 54719]]

exceed $10 million in the case of Commercial Real Estate Loans or any 
CDFI Related Activities (i.e., the total principal amount of the 
transaction must be $10 million or less to be considered a Qualified 
Activity).

D. Designation of Distressed Community

    An Applicant applying for a BEA Program award for carrying out 
Distressed Community Financing Activities, Services Activities, or CDFI 
Support Activities must designate one or more Distressed Communities. 
Each CDFI Partner that is the recipient of CDFI Support Activities from 
an Applicant must also designate a Distressed Community. The CDFI 
Partner can identify a different Distressed Community than the 
Applicant. Applicants providing Equity Investments to a CDFI, and CDFI 
Partners that receive Equity Investments, are not required to designate 
Distressed Communities. Please note that the CDFI Partner's designated 
Distressed Community must meet the requirements of the BEA Program and 
that a Distressed Community as defined by the BEA Program is not the 
same as an Investment Area as defined by the Community Development 
Financial Institutions (CDFI) Program, or a Low-Income Community as 
defined by the New Markets Tax Credit (NMTC) Program.
1. Definition of Distressed Community
    A Distressed Community, defined in the Interim Rule at 12 CFR 
1806.103(t) and more fully described in 12 CFR 1806.200, must meet the 
following minimum geographic, population, poverty, and unemployment 
requirements:
    (a) Geographic requirements: A Distressed Community must be a 
geographic area: (i) That is located within the boundaries of a Unit of 
General Local Government; (ii) the boundaries of which are contiguous; 
and (A) The population of which is at least 4,000 if any portion of the 
area is located within a Metropolitan Area with a population of 50,000 
or greater; (B) the population must be at least 1,000 if no portion of 
the area is located within such a Metropolitan Area; or (C) the area is 
located entirely within an Indian Reservation.
    (b) Economic distress requirements: A Distressed Community must be 
a geographic area where: (i) At least 30 percent of the Residents have 
incomes that are less than the national poverty level, as published by 
the U.S. Bureau of the Census in the most recent decennial census for 
which data is available; and (ii) the unemployment rate is at least 1.5 
times greater than the national average, as determined by the U.S. 
Bureau of Labor Statistics' most recent data, including estimates of 
unemployment developed using the U.S. Bureau of Labor Statistics' 
Census Share calculation method.
2. Designation of Distressed Community
    An Applicant or CDFI Partner (as appropriate) shall designate an 
area as a Distressed Community by:
    (a) Selecting Geographic Units which individually meet the minimum 
area eligibility requirements; or
    (b) Selecting two or more Geographic Units which, in the aggregate, 
meet the minimum area eligibility requirements set forth in paragraph 
(1) of this section provided that no Geographic Unit selected by the 
Applicant within the area has a poverty rate of less than 20 percent.
    An Applicant engaging in Distressed Community Financing Activities 
or Service Activities designates a Distressed Community by submitting: 
(i) A List of Eligible Census Tracts; and (ii) a Map of the Distressed 
Community.
    An Applicant that engaged in CDFI Support Activities only (or CDFI 
Support Activities and Equity Investments) may designate the same 
Distressed Community as any one of its CDFI Partners by signing and 
submitting with its application, a certification (included in the 
application materials) that it is designating the same Distressed 
Community as its CDFI Partner.
    A CDFI Partner designates a Distressed Community by submitting: (i) 
A List of Eligible Census Tracts; (ii) a Map of the Distressed 
Community; and (iii) a Statement of Integral Involvement demonstrating 
that the CDFI Partner is Integrally Involved in the Distressed 
Community.
    Applicants and CDFI Partners must use the CDFI Fund Information 
Mapping System (CIMS) to designate Distressed Communities. CIMS is 
accessed through myCDFIFund and contains step-by-step instructions on 
how to create and print the aforementioned List of Eligible Census 
Tracts and Map of the Distressed Community. MyCDFIFund is an electronic 
interface that is accessed through the Fund's website (http://www.cdfifund.gov). Instructions for registering with myCDFIFund are 
available on the Fund's website. If you have any questions or problems 
with registering, please contact the CDFI Fund IT HelpDesk by telephone 
at (202) 622-2455, or by e-mail to [email protected].

E. CDFI Related Activities

    CDFI Related Activities include Equity Investments, Equity-Like 
Loans, and CDFI Support Activities provided to eligible CDFI Partners. 
In addition to regulatory requirements, this NOFA provides the 
following:
1. Eligible CDFI Partner
    CDFI Partner is defined as a CDFI that has been provided assistance 
in the form of CDFI Related Activities by an Applicant (12 CFR 
1806.103(o)). For the purposes of this NOFA, an eligible CDFI Partner 
is:
    (a) A CDFI that is not an insured credit union, insured depository 
institution, or depository institution holding company, and that has up 
to $25 million in total assets as of its most recently completed fiscal 
year;
    (b) A CDFI that is an insured credit union that has up to $25 
million in total assets as of its most recently completed fiscal year;
    (c)a CDFI that is an insured depository institution or depository 
institution holding company and that has up to $500 million in total 
assets as of its most recently completed fiscal year; or
    (d) A CDFI proposing a new level or type of activity in a CDFI 
Program-qualified Hot Zone (12 CFR part 1805, et seq.) (for further 
information on the CDFI Program's Hot Zones, please refer to the most 
recent NOFA for the Financial Assistance Component of the CDFI Program 
which is available on the Fund's website at http://www.cdfifund.gov/programs).
2.m Limitations on Eligible Qualified Activities Provided to Certain 
CDFI Partners
    An Applicant that is also a CDFI cannot receive credit for any 
financial assistance or Qualified Activities provided to a CDFI Partner 
that is also an FDIC-insured depository institution or depository 
institution holding company.
3. Certificates of Deposit
    Section 1806.103(q) of the Interim Rule states that any certificate 
of deposit placed by an Applicant or its Subsidiary in a CDFI that is a 
bank, thrift, or credit union must be: (i) Uninsured and committed for 
at least three years; or (ii) insured, committed for a term of at least 
three years, and provided at an interest rate that is materially below 
market rates, in the determination of the Fund. For purposes of this 
NOFA, ``materially below market interest rate'' is defined as an annual 
percentage rate that does not exceed 100 percent of yields on Treasury 
securities at constant maturity

[[Page 54720]]

as interpolated by Treasury from the daily yield curve and available on 
the Federal Reserve website at http://www.federalreserve.gov/releases/H15/update. For example, for a three-year certificate of deposit, 
Applicants should use the three-year rate posted for U.S. Government 
securities, Treasury Constant Maturity on H. 15 (Selected Interest 
Rates) Daily Release. The Federal Reserve updates the H. 15 daily at 
approximately 4 p.m. e.s.t. Certificates of deposit placed prior to 
that time may use the rate posted for the previous day. The annual 
percentage rate on a certificate of deposit should be compounded 
quarterly, semi-annually, or annually. In addition, Applicants should 
determine whether a certificate of deposit is insured based on the 
total amount the Applicant or its Subsidiary has on deposit on the day 
the certificate of deposit is placed. For example, if an Applicant 
purchased a $100,000 3-year certificate of deposit from a CDFI in 
April, 2003 and the Applicant purchases another $100,000 certificate of 
deposit from the same CDFI in May, 2004, then the second certificate of 
deposit should be treated as uninsured for purposes of calculating the 
annual percentage rate. The Applicant must note, in its BEA Program 
application, whether the certificate of deposit is insured or 
uninsured.

F. Equity-Like Loans

    An Equity-Like Loan is a loan provided by an Applicant or its 
Subsidiary to a CDFI, and made on such terms that it has 
characteristics of an Equity Investment (consistent with requirements 
of the Appropriate Federal Banking Agency), as such characteristics may 
be specified by the Fund (12 CFR 1806.103(y)). For purposes of this 
NOFA, Equity-Like Loans must meet the following characteristics:
    1. At the end of the initial term, the loan must have a definite 
rolling maturity date that is automatically extended on an annual basis 
if the CDFI borrower continues to be financially sound and carry out a 
community development mission;
    2. Periodic payments of interest and/or principal may only be made 
out of the CDFI borrower's available cash flow after satisfying all 
other obligations;
    3. Failure to pay principal or interest (except at maturity) will 
not automatically result in a default of the loan agreement; and
    4. The loan must be subordinated to all other debt except for other 
Equity-Like Loans. Notwithstanding the foregoing, the Fund reserves the 
right to determine, in its sole discretion and on a case-by-case basis, 
if an instrument meets the above-stated characteristics of an Equity-
Like Loan. Applicants must submit to the Fund for review, not later 
than 45 days prior to the end of the applicable Assessment Period, all 
documents evidencing loans that they wish to be considered as Equity-
Like Loans. The purpose for this request is to enhance the Fund's 
ability to provide feedback to Applicants as to whether a transaction 
meets the Equity-Like Loan characteristics prior to the end of the 
applicable Assessment Period. The Fund will not redraft instruments, 
provide language for Applicants, or render legal opinions related to 
Equity-Like Loans. However, the Fund, in its sole discretion, may 
comment as to the consistency of a proposed instrument with the above-
stated Equity-Like Loan characteristics. Such information will allow 
Applicants, if they so choose, to modify the instruments to conform to 
the program requirements prior to the end of the Assessment Period. 
This process is intended to prevent circumstances in which an Applicant 
executes loan documents without review by the Fund only to learn after 
the close of the Assessment Period that the transaction is ineligible 
for purposes of a BEA Program award. The Fund cannot guarantee timely 
feedback to Applicants that submit the aforementioned documentation 
less than 45 days prior to the end of the applicable Assessment Period.

G. Distressed Community Financing Activities

    Distressed Community Financing Activities include Affordable 
Housing Loans, Affordable Housing Development Loans and related Project 
Investments, Education Loans, Commercial Real Estate Loans and related 
Project Investments, Home Improvement Loans, and Small Business Loans 
and related Project Investments (12 CFR 1806.103(u)). In addition to 
the regulatory requirements, this NOFA provides the following 
additional requirements.
1. Commercial Real Estate Loans and Related Project Investments
    For purposes of this NOFA, eligible Commercial Real Estate Loans 
(12 CFR 1806.103(l)) and related Project Investments (12 CFR 
1806.103(ll)) are generally limited to transactions with a total 
principal value of up to and including $10 million. The Fund will 
calculate award amounts in accordance with Section VIII.B. of this 
NOFA. Notwithstanding the foregoing, the Fund, in its sole discretion, 
may consider transactions with a total principal value of over $10 
million, subject to review and approval of the Applicant's ``community 
benefit statement.'' The Applicant must demonstrate that the proposed 
project offers, or significantly enhances the quality of, a facility or 
service not currently provided to the Distressed Community. The 
application form contains additional information on how to fulfill this 
requirement.
2. Reporting Certain Financial Services
    The Fund will value the administrative cost of providing certain 
Financial Services at the following per unit values:
    (a) $100.00 per account for Targeted Financial Services;
    (b) $50.00 per account for checking and savings accounts that do 
not meet the definition of Targeted Financial Services;
    (c) $5.00 per check cashing transaction times the total number of 
check cashing transactions;
    (d) $25,000 per new ATM installed at a location in a Distressed 
Community;
    (e) $2,500 per ATM operated at a location in a Distressed 
Community;
    (f) $250,000 per new retail bank branch office opened in a 
Distressed Community; and
    (g) in the case of Applicants engaging in Financial Services 
activities not described above, the Fund will determine the account or 
unit value of such services.
    3. In the case of opening a new retail bank branch office, the 
Applicant must certify that it has not operated a retail branch in the 
same census tract in which the new retail branch office is being opened 
in the past three years, and that such new branch will remain in 
operation for at least the next five years.
    Financial Service Activities must be provided by the Applicant to 
Low- and Moderate-Income Residents. An Applicant may determine the 
number of Low- and Moderate-Income individuals who are recipients of 
Financial Services by either:
    (a) Collecting income data on its Financial Services customers; or
    (b) Certifying that the Applicant reasonably believes that such 
customers are Low- and Moderate-Income individuals and providing a 
brief analytical narrative with information describing how the 
Applicant made this determination.

II. Award Information

A. Award Amounts

    Subject to funding availability, the Fund expects that it may award 
approximately $4 million for FY 2005

[[Page 54721]]

BEA Program awards, and approximately $6 million for FY 2006 BEA 
Program awards, in appropriated funds under this NOFA. The Fund 
reserves the right to award in excess of said funds under this NOFA, 
provided that the appropriated funds are available and the Fund deems 
it appropriate. Under this NOFA, the Fund anticipates a maximum award 
amount of $500,000 per Applicant. 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 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.
    When calculating award amounts, the Fund will count only the amount 
an Applicant reasonably expects to disburse on a transaction within 12 
months from the end of the Assessment Period. Subject to the exception 
outlined in Section I. G.1. of this NOFA, in no event shall the value 
of a Qualified Activity for purposes of determining a BEA Program award 
exceed $10 million in the case of Commercial Real Estate Loans or any 
CDFI Related Activities (i.e., the total principal amount of the 
transaction must be $10 million, or less to be considered a Qualified 
Activity).

H. Types of Awards

    BEA Program awards are made in the form of grants.

I. Notice of Award and Award Agreement

    Each awardee under this NOFA must sign a Notice of Award and an 
Award Agreement prior to disbursement by the Fund of award proceeds. 
The Notice of Award and the Award Agreement contain the terms and 
conditions of the award. For further information, see Section IX. of 
this NOFA.

III. Eligibility

A. Eligible Applicants

    The legislation that authorizes the BEA Program specifies that 
eligible Applicants for the BEA Program must be Insured Depository 
Institutions, as defined in 12 U.S.C. Sec.  1813(c)(2). An Applicant 
must be FDIC-insured by December 31, 2004 for the FY 2005 funding round 
and by December 31, 2005 for the FY 2006 funding round to be eligible 
for consideration for a BEA Program award under this NOFA.
1. 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. Prior 
BEA Program awardees and prior awardees of other Fund programs are 
eligible to apply under this NOFA, except as follows:
    (a) Failure to meet reporting requirements: The Fund will not 
consider an application submitted by an Applicant if the Applicant, or 
an entity that Controls (as such term is defined in paragraph (g) 
below) 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 or allocatee under any Fund program and is not 
current on the reporting requirements set forth in the previously 
executed assistance, award or allocation agreement(s), as of the 
application deadline(s) of this NOFA. Please note that the Fund only 
acknowledges the receipt of reports that are complete. As such, 
incomplete reports or reports that are deficient of required elements 
will not be recognized as having been received.
    (b) Pending resolution of noncompliance: If an Applicant that is a 
prior awardee or allocatee under any Fund program and if: (i) It has 
submitted complete and timely reports to the Fund that demonstrate 
noncompliance with a previous assistance, award or allocation 
agreement, and (ii) the Fund has yet to make a final determination as 
to whether the entity is in default of its previous assistance, award 
or allocation agreement, the Fund will consider the Applicant's 
application under this NOFA pending full resolution, in the sole 
determination of the Fund, of the noncompliance. Further, 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 or allocatee and if such entity: (i) 
Has submitted complete and timely reports to the Fund that demonstrate 
noncompliance with a previous assistance, award or allocation 
agreement, and (ii) the Fund has yet to make a final determination as 
to whether the entity is in default of its previous assistance, award 
or allocation agreement, the Fund will consider the applicant's 
application under this NOFA pending full resolution, in the sole 
determination of the Fund, of the noncompliance.
    (c) Default status: The Fund will not consider an application 
submitted by an Applicant that is a prior Fund awardee or allocatee 
under any Fund program if, as of the application deadline of this NOFA, 
the Fund has made a final determination that such Applicant is in 
default of a previously executed assistance, award or allocation 
agreement(s) and the Fund has provided written notification of such 
determination to such Applicant. Further, an entity is not eligible to 
apply for an award pursuant to this NOFA if, as of the application 
deadline, the Fund has made a final determination that another entity 
that Controls the Applicant, is Controlled by the Applicant or shares 
common management officials with the Applicant (as determined by the 
Fund): (i) Is a prior Fund awardee or allocatee under any Fund program, 
(ii) has been determined by the Fund to be in default of a previously 
executed assistance, award or allocation agreement(s), and (iii) the 
Fund has provided written notification of such determination to the 
defaulting entity.
    (d) Termination in default: The Fund will not consider an 
application submitted by an Applicant that is a prior Fund awardee or 
allocatee under any Fund program if, within the 12-month period prior 
to the application deadline of this NOFA, the Fund has made a final 
determination that such Applicant's prior award or allocation 
terminated in default of the assistance, award or allocation agreement 
and the Fund has provided written notification of such determination to 
such Applicant. Further, an entity is not eligible to apply for an 
award pursuant to this NOFA if, within the 12-month period prior to the 
application deadline of this NOFA, the Fund has made a final 
determination that 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 or 
allocatee under any Fund program whose award or allocation terminated 
in default of the assistance, award or allocation agreement and the 
Fund has provided written notification of such determination to the 
defaulting entity.
    (e) Undisbursed balances: 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

[[Page 54722]]

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 (defined below) under 
said prior award(s), as of the application deadline of this NOFA. 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 such affiliated 
entities when calculating the amount of undisbursed funds.
    (f) For the purposes of this section, ``undisbursed funds'' is 
defined as: (i) In the case of prior BEA Program award(s), any balance 
of award funds equal to or greater than five (5) percent of the total 
prior BEA Program award(s) that remains undisbursed more than three (3) 
years after the end of the calendar year in which 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 (5) percent of the total prior award(s) 
that remains undisbursed more than two (2) years after the end of the 
calendar year in which the Fund signed an assistance agreement with the 
awardee.
    ``Undisbursed funds'' does not include (i) Tax credit allocation 
authority allocated through the New Markets Tax Credit Program; (ii) 
any award funds for which the Fund received a full and complete 
disbursement request from the awardee as of the application deadline of 
this NOFA; and (iii) any award funds for an award that has been 
terminated, expired, rescinded, or deobligated by the Fund.
    (g) For purposes of this NOFA, the term ``Control'' means: (1) 
Ownership, control, or power to vote 25 percent or more of the 
outstanding shares of any class of Voting Securities (as defined in 12 
CFR 1805.104(mm)) of any legal entity, directly or indirectly or acting 
through one or more other persons; (2) control in any manner over the 
election of a majority of the directors, trustees, or general partners 
(or individuals exercising similar functions) of any legal entity; or 
(3) the power to exercise, directly or indirectly, a controlling 
influence over the management, credit or investment decisions, or 
policies of any legal entity.
    (h) Contact the Fund: Accordingly, Applicants that are prior 
awardees and/or allocatees under any Fund program are advised to: (i) 
Comply with requirements specified in assistance, award and/or 
allocation 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. e.s.t., starting the 
date of the publication of this NOFA through February 10, 2005 (for the 
FY 2005 funding round) and through February 10, 2006 (for the FY 2006 
funding round) (two business days before the application deadline). The 
Fund will not respond to Applicants' reporting, compliance or 
disbursement telephone calls or e-mail inquiries that are received 
after 5 p.m. e.s.t. on February 10, 2005 until after the funding 
application deadline of February 14, 2005 for the FY 2005 funding round 
or after 5 p.m. e.s.t. on February 10, 2006 until after the funding 
application deadline of February 14, 2006 for the FY 2006 funding 
round.
2. Cost Sharing and Matching Fund Requirements
    Not applicable.
3. Prohibition Against Double Funding
    No CDFI may receive a BEA Program award if it has:
    (a) An application pending for assistance under the CDFI Program 
(12 CFR part 1805, et seq.);
    (b) Directly received assistance from the Fund under the CDFI 
Program within the 12-month period prior to the date the Fund selected 
the Applicant to receive a BEA Program award; or
    (c) Ever received assistance under the CDFI Program for the same 
activities for which it is seeking a BEA Program award.
    An insured depository institution investor (and its affiliates and 
Subsidiaries) may not receive a BEA Program award in addition to a New 
Markets Tax Credit Program allocation for the same investment in a 
Community Development Entity, as defined at 26 U.S.C. Sec.  45D(c).

IV. Application and Submission Information

A. Address to Request Application Package

    Applicants may submit applications under this NOFA in paper form 
(except as provided below for the Report of Transactions). Shortly 
following the publication of this NOFA, the Fund will make the FY 2005-
2006 BEA Program application materials available on its Web site at 
http://www.cdfifund.gov. The Fund will send application materials to 
Applicants that are unable to download them from the Web site. To have 
application materials sent to you, contact the Fund by telephone at 
(202) 622-6355; by e-mail at [email protected]; or by facsimile 
at (202) 622-7754. These are not toll free numbers.

B. Application Content Requirements

    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 by the applicable 
deadlines. Applicants will not be afforded an opportunity to provide 
any missing materials or documentation. Additional information, 
including instructions relating to the submission of the application 
and supporting documentation, is set forth in further detail in the 
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 (EIN), with a letter or other documentation from 
the Internal Revenue Service (IRS) confirming the EIN. Incomplete 
applications will be rejected and returned to the sender.
    An Applicant may not submit more than one application in response 
to either the FY 2005 funding round or FY 2006 funding round.

C. Form of Application Submission

    Applicants must submit applications under this NOFA in paper form, 
with the exception of the required electronic submission of the Report 
of Transactions (see Section IV.D.3. of this NOFA). Applications sent 
by facsimile or by e-mail will not be accepted.

[[Page 54723]]

D. Application Submission Dates and Times

1. Application Deadlines
    The deadline for receipt of applications for the FY 2005 funding 
round is 5 p.m. e.s.t. on February 14, 2005. The deadline for receipt 
of applications for the FY 2006 funding round is 5 p.m. e.s.t. on 
February 14, 2006. Applications and other required documents and other 
attachments received after 5 p.m. e.s.t. on the applicable date 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 United States Postal 
Service, couriers or overnight delivery services. Nor will the Fund 
afford Applicants the opportunity to provide missing documentation 
after said deadline(s).
2. Paper Applications
    Paper applications must be received in their entirety by the 
applicable time and date, including an original (i.e., not a photocopy 
or faxed copy) Applicant Information Form signed by the identified 
Authorized Representative, a letter or other documentation from the 
Internal Revenue Service confirming the Applicant's Employer 
Identification Number (EIN), and all other required paper attachments.
3. Electronic Submission of Report of Transactions
    In order to expedite application review, Applicants must submit a 
specific section of the application, the Report of Transactions form, 
electronically (via myCDFIFund) per the instructions provided on the 
Fund's Web site, by 5 p.m. e.s.t. on February 14, 2005 (for the FY 2005 
funding round) or by 5 p.m. e.s.t. on February 14, 2006 (for the FY 
2006 funding round). Applicants will be unable to submit Reports of 
Transactions after said dates and times. Nor will Applicants have an 
opportunity to submit corrected Reports of Transactions after said 
dates and times.

V. Intergovernmental Review

    Not Applicable.

VI. Funding Restrictions

    Not Applicable.

VII. Addresses

    Paper applications must be sent to: CDFI Fund Grants Management and 
Compliance Manager, BEA Program, Bureau of Public Debt, 200 Third 
Street, Room 10, Parkersburg, WV 26101. The telephone number to be used 
in conjunction with overnight mailings to this address is (304) 480-
5450. The Fund will not accept applications in its offices in 
Washington, DC. Applications and attachments received in the Fund's 
Washington, DC offices will be rejected and returned to the sender. In 
addition, as provided above, Applicants must submit completed Reports 
of Transactions via myCDFIFund by the applicable deadline. The Fund 
will not afford Applicants an opportunity to provide missing 
documentation after the applicable deadline.

VIII. Application Review Information

A. Priority Factors

    Priority Factors are the numeric values assigned to individual 
types of activity within a category of Qualified Activity. A Priority 
Factor represents the Fund's assessment of the degree of difficulty, 
the extent of innovation (including, for example, pricing), and the 
extent of benefits accruing to the Distressed Community for each type 
of activity. The Priority Factor works by multiplying the change in a 
Qualified Activity by its assigned Priority Factor to achieve a 
``weighted value.'' This weighted value of the change would be 
multiplied by the applicable award percentage to yield the award amount 
for that particular activity. For purposes of this NOFA, the Fund is 
establishing Priority Factors for the Distressed Community Financing 
Activities category only, as follows:

------------------------------------------------------------------------
                                                               Priority
                    Qualified activities                        factor
------------------------------------------------------------------------
Affordable Housing Loans...................................          3.0
Education Loans............................................          3.0
Home Improvement Loans.....................................          3.0
Small Business Loans and related Project Investments.......          3.0
Affordable Housing Development Loans and related Project             2.0
 Investments...............................................
Commercial Real Estate Loans and related Project                     2.0
 Investments...............................................
------------------------------------------------------------------------

B. Award Percentages, Award Amounts, Selection Process

    The Interim Rule describes the process for selecting Applicants to 
receive BEA Program awards and determining award amounts. Applicants 
will calculate and request an estimated award amount in accordance with 
a multiple step procedure that is outlined in the Interim Rule (at 12 
CFR 1806.202). The Fund will use the Applicant's estimated award amount 
as the basis for calculating the actual award amount that an Applicant 
may receive. As outlined in the Interim Rule at 12 CFR 1806.203, the 
Fund will determine actual award amounts based on the availability of 
funds, increases in Qualified Activities from the Baseline Period to 
the Assessment Period, and each Applicant's priority ranking. In 
calculating the increase in Qualified Activities, the Fund will 
determine the eligibility of each transaction for which an Applicant 
has applied for a BEA Program award. In some cases, the actual award 
amount calculated by the Fund may not be the same as the estimated 
award amount requested by the Applicant.
    In the CDFI Related Activities category (except for Equity 
Investments), if an Applicant is a CDFI, such estimated award amount 
will be equal to 18 percent of the increase in Qualified Activity for 
the category. If an Applicant is not a CDFI, such estimated award 
amount will be equal to 6 percent of the increase in Qualified Activity 
for the category. Notwithstanding the foregoing, the award percentage 
applicable to an Equity Investment, Equity-Like Loan, or Grant in a 
CDFI shall be 15 percent of the increase in Qualified Activity for the 
category. For the Distressed Community Financing Activities and Service 
Activities categories, if an Applicant is a CDFI, such estimated award 
amount will be equal to 9 percent of the weighted value of the increase 
in Qualified Activity for the category. If an Applicant is not a CDFI, 
such estimated award amount will be equal to 3 percent of the weighted 
value of the increase in Qualified Activity for the category.
    If the amount of funds available during the funding round is 
insufficient for all estimated award amounts, Awardees will be selected 
based on the process described in the Interim Rule at 12 CFR 
1806.203(b). This process gives funding priority to Applicants that 
undertake activities in the following order:
    1. CDFI Related Activities;
    2. Distressed Community Financing Activities, and
    3. Service Activities.
    Within each category, Applicants will be ranked according to the 
ratio of the actual award amount calculated by the Fund for the 
category to the total assets of the Applicant. Within the Distressed 
Community Financing category as well as the Service Activities 
category, Applicants that are certified CDFIs will be ranked first, and 
then Applicants that have carried out such Distressed Community 
Financing Activities and

[[Page 54724]]

Service Activities in a Distressed Community that encompasses an Indian 
Reservation.
    The Fund, in its sole discretion: (i) May adjust the estimated 
award amount that an Applicant may receive; (ii) may establish a 
maximum amount that may be awarded to an Applicant; and (iii) reserves 
the right to limit the amount of an award to any Applicant if the Fund 
deems it appropriate.
    For purposes of calculating award disbursement amounts, the Fund 
will treat Qualified Activities with a total principal amount of less 
than $250,000 as fully disbursed. Awardees will have 12 months from the 
end of the Assessment Period to make disbursements for Qualified 
Activities and 18 months to submit to the Fund disbursement requests 
for the corresponding portion of their awards, after which the Fund 
will rescind and deobligate any outstanding award balance and said 
outstanding award balance will no longer be available to the Awardee.
    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.
    There is no right to appeal the Fund's award decisions. The Fund's 
award decisions are final.

IX. 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 and Award Agreement to the 
Applicant. The Notice of Award will contain the general terms and 
conditions underlying the Fund's provision of an award including, but 
not limited to, the requirement that an Awardee and the Fund enter into 
an Award Agreement. The Applicant must execute the Notice of Award and 
return it to the Fund along with the Award Agreement. The Fund reserves 
the right, in its sole discretion, to rescind its award and Notice of 
Award if the Awardee fails to return the Notice of Award or Award 
Agreement, signed by the Authorized Representative of the Awardee, 
along with any other requested documentation, by the deadline set by 
the Fund.
    By executing a Notice of Award, the Awardee agrees that, if 
information (including administrative errors) 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.
1. Failure To Meet Reporting Requirements
    If an Applicant, or an 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 or 
allocatee under any Fund program and is not current on the reporting 
requirements set forth in the previously executed assistance, award or 
allocation agreement(s), as of the date of the Notice of Award, the 
Fund reserves the right, in its sole discretion, to delay entering into 
an Award Agreement and/or to delay making a disbursement of award 
proceeds, until said prior awardee or allocatee is current on the 
reporting requirements in the previously executed assistance, award or 
allocation agreement(s). Please note that the Fund only acknowledges 
the receipt of reports that are complete. As such, incomplete reports 
or reports that are deficient of required elements will not be 
recognized as having been received. If said prior awardee or allocatee 
is unable to meet this requirement within the timeframe set by the 
Fund, the Fund reserves the right, in its sole discretion, to terminate 
and rescind the Notice of Award and the award made under this NOFA.
2. Pending Resolution of Noncompliance
    If an Applicant is a prior Fund awardee or allocatee under any Fund 
program and if: (i) It has submitted complete and timely reports to the 
Fund that demonstrate noncompliance with a previous assistance, award, 
or allocation agreement, and (ii) the Fund has yet to make a final 
determination regarding whether or not the entity is in default of its 
previous assistance, award, or allocation agreement, the Fund reserves 
the right, in its sole discretion, to delay entering into an Award 
Agreement and/or to delay making a disbursement of award proceeds, 
pending full resolution, in the sole determination of the Fund, of the 
noncompliance. Further, 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 
or allocatee under any Fund program, and if such entity: (i) Has 
submitted complete and timely reports to the Fund that demonstrate 
noncompliance with a previous assistance, award, or allocation 
agreement, and (ii) the Fund has yet to make a final determination as 
to whether the entity is in default of its previous assistance, award, 
or allocation agreement, the Fund reserves the right, in its sole 
discretion, to delay entering into an Award Agreement and/or to delay 
making a disbursement of award proceeds pending full resolution, in the 
sole determination of the Fund, of the noncompliance. If said prior 
awardee or allocatee is unable to meet this requirement, in the sole 
determination of the Fund, the Fund reserves the right, in its sole 
discretion, to terminate and rescind the Notice of Award and the award 
made under this NOFA.
3. Default Status
    If, at any time prior to entering into an Award Agreement under 
this NOFA, the Fund has made a final determination that an Applicant 
that is a prior Fund awardee or allocatee under any Fund program is in 
default of a previously executed assistance, award, or allocation 
agreement(s) and has provided written notification of such 
determination to the Applicant, the Fund reserves the right, in its 
sole discretion, to delay entering into an Award Agreement and/or to 
delay making a disbursement of award proceeds until said prior awardee 
or allocatee has submitted a complete and timely report demonstrating 
full compliance with said agreement within a timeframe set by the Fund. 
Further, if, at any time prior to entering into an Award Agreement 
under this NOFA, the Fund has made a final determination that another 
entity which 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 or allocatee under any Fund program, 
and is in default of a previously executed assistance, allocation or 
award agreement(s) and has provided written notification of such 
determination to the defaulting entity, the Fund reserves the right, in 
its sole discretion, to delay entering into an Award Agreement and/or 
to delay making a disbursement of award proceeds until said prior 
awardee or allocatee has submitted a complete and timely report 
demonstrating full compliance with said agreement within a timeframe 
set by the Fund. If said prior awardee or allocatee is unable to meet 
this requirement, the Fund

[[Page 54725]]

reserves the right, in its sole discretion, to terminate and rescind 
the Notice of Award and the award made under this NOFA.
4. Termination in Default
    If, within the 12-month period prior to entering into an Award 
Agreement under this NOFA, the Fund has made a final determination that 
an Applicant that is a prior Fund awardee or allocatee under any Fund 
program whose award or allocation terminated in default of such prior 
agreement and the Fund has provided written notification of such 
determination to such organization, the Fund reserves the right, in its 
sole discretion, to delay entering into an Award Agreement and/or to 
delay making a disbursement of award proceeds. Further, if, within the 
12-month period prior to entering into an Award Agreement under this 
NOFA, the Fund has made a final determination that another entity which 
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 or allocatee under any Fund program, and whose 
award or allocation terminated in default of such prior agreement(s) 
and has provided written notification of such determination to the 
defaulting entity, the Fund reserves the right, in its sole discretion, 
to delay entering into an Award Agreement and/or to delay making a 
disbursement of award proceeds.

B. Award Agreement

    After the Fund selects an Awardee, the Fund and the Awardee will 
enter into an Award Agreement. The Award Agreement shall provide that 
an Awardee shall: (i) Carry out its Qualified Activities in accordance 
with applicable law, the approved application, and all other applicable 
requirements; (ii) comply with such other terms and conditions 
(including recordkeeping and reporting requirements) that the Fund may 
establish; and (iii) not receive any monies until the Fund has 
determined that the Awardee has fulfilled all applicable requirements.

C. Administrative and National Policy Requirements

    Not applicable.

D. Reporting and Accounting

    Not applicable.

X. 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. e.s.t., starting the date of the publication of this NOFA through 
close of business February 10, 2005 for the FY 2005 funding round (2 
business days before the application deadline) and through close of 
business February 10, 2006 for the FY 2006 funding round (2 business 
days before the application deadline).
    The Fund will not respond to questions or provide support 
concerning the application after 5 p.m. e.s.t. on February 10, 2005 for 
the FY 2005 funding round, until after the application deadline of 
February 14, 2005. The Fund will not respond to questions or provide 
support concerning the application after 5 p.m. e.s.t. on February 10, 
2006 for the FY 2006 funding round, until after the application 
deadline of February 14, 2006.
    Applications and other information regarding the Fund and its 
programs may be downloaded and printed from the Fund's Web site at 
http://www.cdfifund.gov. The Fund will post on its Web site responses 
to questions of general applicability regarding the BEA Program.

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 Distressed 
Community maps using the Fund's Web site 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 (such 
as the eligibility of specific transactions or CDFI Partners), contact 
a member of the BEA Program staff, who can 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.

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) 622-9625, or by mail at CDFI Fund, 601 13th 
Street, NW., Suite 200 South, Washington, DC 20005. These are not toll 
free numbers.

D. Legal Counsel Support

    If you have any questions or matters that you believe require 
response by the Fund's Office of Legal Counsel, please refer to the 
document titled ``How to Request a Legal Review'', found on the Fund's 
Web site at http://www.cdfifund.gov.

    Authority: 12 U.S.C. 1834a, 4703, 4703 note, 4713; 12 CFR part 
1806.

    Dated: September 3, 2004.
Arthur A. Garcia,
Director, Community Development Financial Institutions Fund.
[FR Doc. 04-20460 Filed 9-8-04; 8:45 am]
BILLING CODE 4810-70-P