[Federal Register Volume 80, Number 69 (Friday, April 10, 2015)]
[Notices]
[Pages 19400-19415]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-08355]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Notice of Guarantee Availability (NOGA) Inviting Qualified Issuer 
Applications and Guarantee Applications for the Community Development 
Financial Institutions (CDFI) Bond Guarantee Program

    Announcement Type: Announcement of opportunity to submit Qualified 
Issuer Applications and Guarantee Applications.
    Catalog of Federal Domestic Assistance (CFDA) Number: 21.011.
    Definitions: Capitalized terms used in this NOGA and not defined 
elsewhere are defined in the CDFI Bond Guarantee Program Regulations 
(12 CFR 1808.102) and the CDFI Program regulations (12 CFR 1805.104).

DATES: Qualified Issuer Applications and Guarantee Applications may be 
submitted to the CDFI Fund starting on the date of publication of this 
NOGA. In order to be considered for the issuance of a Guarantee under 
FY 2015 program authority, Qualified Issuer Applications must be 
submitted by June 5, 2015 and Guarantee Applications must be submitted 
by June 12, 2015. If applicable, CDFI Certification Applications must 
be received by the CDFI Fund by 5:00 p.m. ET, May 22, 2015. Under FY 
2015 authority, Bond Documents and Bond Loan documents must be 
executed, and Guarantees will be provided, in the order in which 
Guarantee Applications are approved or by such other criteria that the 
CDFI Fund may establish and publish, in its sole discretion, and in any 
event by September 30, 2015.
    Executive Summary: This NOGA is published in connection with the 
CDFI

[[Page 19401]]

Bond Guarantee Program, administered by the Community Development 
Financial Institutions Fund (CDFI Fund), the U.S. Department of the 
Treasury (Treasury). The purpose of this NOGA is to notify the public 
that: (i) Parties interested in being approved as Qualified Issuers may 
submit Qualified Issuer Applications and (ii) Qualified Issuers may 
submit Guarantee Applications to be approved for a Guarantee under the 
CDFI Bond Guarantee Program. This NOGA also explains application 
submission and evaluation requirements and processes, and provides 
agency contacts and information on CDFI Bond Guarantee Program 
outreach.

I. Guarantee Opportunity Description

    A. Authority; Bond Issue size; Amount of Guarantee authority; 
Program summary; Review of Guarantee Applications, in general; 
Additional reference documents. 1. Authority. The CDFI Bond Guarantee 
Program was authorized by the Small Business Jobs Act of 2010 (Pub. L. 
111-240; 12 U.S.C. 4713a) (the Act). Section 1134 of the Act amended 
the Riegle Community Development and Regulatory Improvement Act of 1994 
(12 U.S.C. 4701, et seq.) to provide authority to the Secretary of the 
Treasury to establish and administer the CDFI Bond Guarantee Program.
    2. Bond Issue size; Amount of Guarantee authority. In FY 2015, the 
Secretary may guarantee Bond Issues having a minimum Guarantee of $100 
million each, up to an aggregate total of $750 million.
    3. Program summary. The purpose of the CDFI Bond Guarantee Program 
is to support CDFI lending by providing Guarantees for Bonds issued for 
Eligible Community or Economic Development Purposes, as authorized by 
section 1134 and 1703 of the Act. The Secretary, as the Guarantor of 
the Bonds, will provide a 100 percent Guarantee for the repayment of 
the Verifiable Principal, Interest, and Call Premium of Bonds issued by 
Qualified Issuers. Qualified Issuers, approved by the CDFI Fund, will 
issue Bonds that will be purchased by the Federal Financing Bank. The 
Qualified Issuer will use Bond Proceeds to provide Bond Loans to 
Eligible CDFIs, which will use Bond Loan proceeds for Eligible 
Community and Economic Development Purposes, including providing 
Secondary Loans to Secondary Borrowers.
    4. Review of Guarantee Applications, in general.
    (a) Qualified Issuer Applications submitted with Guarantee 
Applications will have priority for review over Qualified Issuer 
Applications submitted without Guarantee Applications. With the 
exception of the aforementioned prioritized review, all Qualified 
Issuer Applications and Guarantee Applications will be reviewed by the 
CDFI Fund on an ongoing basis, in the order in which they are received 
or by such other criteria that the CDFI Fund may establish and publish, 
in its sole discretion.
    (b) Guarantee Applications that are incomplete or require the CDFI 
Fund to request additional or clarifying information may delay the 
ability of the CDFI Fund to move the Guarantee Application to the next 
phase of review. Submitting an incomplete Guarantee Application earlier 
than other applicants does not ensure first approval.
    (c) Qualified Issuer Applications and Guarantee Applications that 
were received in FY 2014 and that were neither withdrawn nor declined 
in FY 2014 will be considered under FY 2015 authority.
    (d) Pursuant to the Regulations at 12 CFR 1808.504(c), the 
Guarantor may limit the number of Guarantees issued per year or the 
number of Guarantee Applications accepted to ensure that a sufficient 
examination of Guarantee Applications is conducted.
    (e) The Guarantor reserves the right to approve Guarantees, in 
whole or in part, in response to any, all, or none of the Guarantee 
Applications submitted in response to this NOGA. The Guarantor also 
reserves the right to approve any Guarantees in an amount that is less 
than requested in the corresponding Guarantee Application.
    5. Additional reference documents. In addition to this NOGA, the 
CDFI Fund encourages interested parties to review the following 
documents, which have been posted on the CDFI Bond Guarantee Program 
page of the CDFI Fund's Web site at http://www.cdfifund.gov/bond.
    (a) CDFI Bond Guarantee Program Regulations. The interim rule that 
governs the CDFI Bond Guarantee Program was published on February 5, 
2014 (78 FR 8296; 12 CFR part 1808) (the Regulations) and provides the 
regulatory requirements and parameters for CDFI Bond Guarantee Program 
implementation and administration including general provisions, 
eligibility, eligible activities, applications for Guarantee and 
Qualified Issuer, evaluation and selection, terms and conditions of the 
Guarantee, Bonds, Bond Loans, and Secondary Loans.
    (b) Application materials. Details regarding Qualified Issuer 
Application and Guarantee Application content requirements are found in 
this NOGA and the respective application materials.
    (c) Program documentation. Interested parties should review 
template Bond Documents and Bond Loan documents that will be used in 
connection with each Guarantee. The template documents will be posted 
on the CDFI Fund's Web site for review. Such documents include, among 
others:
    (i) The Agreement to Guarantee, which describes the roles and 
responsibilities of the Qualified Issuer, will be signed by the 
Qualified Issuer and the Guarantor and will include term sheets as 
exhibits that will be signed by each individual Eligible CDFI;
    (ii) The Bond Trust Indenture, which describes responsibilities of 
the Master Servicer/Trustee in overseeing the servicing of the Bonds 
and will be entered into by the Qualified Issuer and the Master 
Servicer/Trustee;
    (iii) The Bond Loan Agreement, which describes the terms and 
conditions of Bond Loans and will be entered into by the Qualified 
Issuer and each Eligible CDFI that receives a Bond Loan;
    (iv) The Bond Purchase Agreement, which describes the terms and 
conditions under which the Bond Purchaser will purchase the Bonds 
issued by the Qualified Issuer and will be signed by the Bond 
Purchaser, the Qualified Issuer, the Guarantor and the CDFI Fund; and
    (v) The Future Advance Promissory Bond, which will be signed by the 
Qualified Issuer as its promise to repay the Bond Purchaser.
    The template documents may be updated periodically, as needed, and 
will be tailored, as appropriate, to the terms and conditions of a 
particular Bond, Bond Loan, and Guarantee.
    (d) Document negotiation. The Bond Documents and the Bond Loan 
documents reflect the standard terms and conditions of the CDFI Bond 
Guarantee Program and will not be substantially revised or negotiated 
prior to execution.
    (e) Frequently Asked Questions. The CDFI Fund will periodically 
post on its Web site responses to questions that are asked by parties 
interested in the CDFI Bond Guarantee Program.
    B. Designated Bonding Authority. The CDFI Fund has determined that, 
for purposes of this NOGA, it will not solicit applications from 
entities seeking to serve as a Qualified Issuer in the role of the 
Designated Bonding Authority, pursuant to 12 CFR 1808.201, in FY 2015.
    C. Noncompetitive process. The CDFI Bond Guarantee Program is a 
non-competitive program through which

[[Page 19402]]

Qualified Issuer Applications and Guarantee Applications will undergo a 
merit-based evaluation (meaning, applications will not be scored 
against each other in a competitive manner in which higher ranked 
applicants are favored over lower ranked applicants).
    D. Relationship to other CDFI Fund programs.
    1. Award funds received under any other CDFI Fund Program cannot be 
used by any participant, including Qualified Issuers, Eligible CDFIs, 
and Secondary Borrowers, to pay principal, interest, fees, 
administrative costs, or issuance costs (including Bond Issuance Fees) 
related to the CDFI Bond Guarantee Program, or to fund the Risk-Share 
Pool for a Bond Issue.
    2. Bond Proceeds may be combined with New Markets Tax Credits 
(NMTC) derived equity (i.e., leveraged loan) to make a Qualified Equity 
Investment (QEI) in a Community Development Entity or to refinance a 
Qualified Low-Income Community Investment (QLICI) at the beginning of 
the seven (7) year NMTC compliance period only under the following 
circumstances: If an Eligible CDFI proposes to use Bond Loan proceeds 
to finance a leveraged loan in a transaction that includes a NMTC 
investment, the Eligible CDFI must provide: (1) Additional collateral 
in the form of Other Pledged Loans or Cash Collateral; (2) a payment 
guarantee or similar Credit Enhancement; and/or (3) other assurances 
that are required by Treasury. Such additional collateral, Credit 
Enhancement, and/or assurances must be from a non-Federal source, 
remain in place during the entire seven-year NMTC compliance period, 
and comply with the Secondary Loan Requirements. These requirements 
will be included in the term sheet (which will be an exhibit to the 
Agreement to Guarantee that must be signed by the Eligible CDFI) and 
the final Bond Loan terms.
    3. Bond Proceeds may not be used to refinance a leveraged loan 
during the seven-year NMTC compliance period. However, Bond Proceeds 
may be used to refinance a QLICI after the seven-year NMTC compliance 
period has ended, so long as all other programmatic requirements are 
met.
    4. The terms Qualified Equity Investment, Community Development 
Entity, and Qualified Low-Income Community Investment are defined in 
the NMTC Program's authorizing statute, 26 U.S.C. 45D.
    E. Relationship and interplay with other Federal programs and 
Federal funding. 1. Eligible CDFIs may not use Bond Loans to refinance 
existing Federal debt or to service debt from other Federal credit 
programs.
    2. The CDFI Bond Guarantee Program underwriting process will 
include a comprehensive review of the Eligible CDFI's concentration of 
sources of funds available for debt service, including the 
concentration of sources from other Federal programs and level of 
reliance on said sources, to determine the Eligible CDFI's ability to 
service the additional debt.
    3. In the event that the Eligible CDFI proposes to use other 
Federal funds to service Bond Loan debt or as Credit Enhancement, the 
CDFI Fund may require, in its sole discretion, that the Eligible CDFI 
provide written assurance from such other Federal program, in form that 
is acceptable to the CDFI Fund and that the CDFI Fund may rely upon, 
that said use is permissible.
    F. Contemporaneous application submission. Qualified Issuer 
Applications may be submitted contemporaneously with Guarantee 
Applications; however, the CDFI Fund will review an entity's Qualified 
Issuer Application and make its Qualified Issuer determination prior to 
approving a Guarantee Application. As noted above, review priority will 
be given to any Qualified Issuer Application that is accompanied by a 
Guarantee Application.
    G. Other restrictions on use of funds. Bond Proceeds may not be 
used to finance or refinance any trade or business consisting of the 
operation of any private or commercial golf course, country club, 
massage parlor, hot tub facility, suntan facility, racetrack or other 
facility used for gambling, or any store the principal business of 
which is the sale of alcoholic beverages for consumption off-premises. 
Bond Proceeds may not be used to finance or refinance tax-exempt 
obligations or finance or refinance projects that are also financed by 
tax-exempt obligations if: (a) Such financing or refinancing results in 
the direct or indirect subordination of the Bond Loan or Bond Issue to 
the tax-exempt obligations or (b) such financing or refinancing results 
in a corresponding guarantee of the tax-exempt obligation. Qualified 
Issuers and Eligible CDFIs must ensure that any financing made in 
conjunction with tax-exempt obligations complies with CDFI Bond 
Guarantee Program Regulations.

II. General Application Information

    The following requirements apply to all Qualified Issuer 
Applications and Guarantee Applications submitted under this NOGA, as 
well as any Qualified Issuer Applications and Guarantee Applications 
submitted under the FY 2014 NOGA that were neither withdrawn nor 
declined in FY 2014.
    A. CDFI Certification Requirements. 1. In general. By statute and 
regulation, the Qualified Issuer applicant must be either a Certified 
CDFI (an entity that has been certified by the CDFI Fund as meeting the 
CDFI certification requirements set forth in 12 CFR 1805.201) or an 
entity designated by a Certified CDFI to issue Bonds on its behalf. An 
Eligible CDFI must be a Certified CDFI as of the Bond Issue Date and 
must maintain its CDFI certification throughout the term of the 
corresponding Bond.
    2. CDFI Certification requirements. Pursuant to the regulations 
that govern CDFI certification (12 CFR 1805.201), an entity may be 
certified if it is a legal entity (meaning, that it has properly filed 
articles of incorporation or other organizing documents with the State 
or other appropriate body in the jurisdiction in which it was legally 
established, as of the date the CDFI Certification Application is 
submitted) and meets the following requirements:
    (a) Primary mission requirement (12 CFR 1805.201(b)(1)): To be a 
Certified CDFI, an entity must have a primary mission of promoting 
community development, which mission must be consistent with its Target 
Market. In general, the entity will be found to meet the primary 
mission requirement if its incorporating documents or board-approved 
narrative statement (i.e., mission statement or resolution) clearly 
indicate that it has a mission of purposefully addressing the social 
and/or economic needs of Low-Income individuals, individuals who lack 
adequate access to capital and/or financial services, distressed 
communities, and other underserved markets. An Affiliate of a 
Controlling CDFI, seeking to be certified as a CDFI (and therefore, 
approved to be an Eligible CDFI to participate in the CDFI Bond 
Guarantee Program), must demonstrate that it meets the primary mission 
requirement on its own merit, pursuant to the regulations and the CDFI 
Certification Application and related guidance materials posted on the 
CDFI Fund's Web site.
    (b) Financing entity requirement (12 CFR 1805.201(b)(2)): To be a 
Certified CDFI, an entity must demonstrate that its predominant 
business activity is the provision of Financial Products and Financial 
Services, Development Services, and/or other similar financing.
    (i) Concurrent with the publication of this NOGA, the CDFI Fund has 
published a revision of 12 CFR 1805.201(b)(2), the section of the CDFI

[[Page 19403]]

certification regulation that governs the ``financing entity'' 
requirement. The regulatory change creates a means for the CDFI Fund, 
in its discretion, to deem an Affiliate (meaning, in this case, an 
entity that is Controlled by a CDFI; see 12 CFR 1805.104(b)) to have 
met the financing entity requirement based on the financing activity or 
track record of the Controlling CDFI (as Control is defined in 12 CFR 
1805.104(q)), solely for the purpose of participating in the CDFI Bond 
Guarantee Program as an Eligible CDFI. In order for the Affiliate to 
rely on the Controlling CDFI's track record, (A) the Controlling CDFI 
must be a Certified CDFI; (B) there must be an operating agreement that 
includes management and ownership provisions in effect between the two 
entities (prior to the submission of a CDFI Certification Application 
and in form and substance that is acceptable to the CDFI Fund); and (C) 
the Affiliate must submit a complete CDFI Certification Application to 
the CDFI Fund no later than May 22, 2015 in order it to be considered 
for CDFI certification and participation in the FY 2015 application 
round of the CDFI Bond Guarantee Program.
    This regulatory revision affects only the Affiliate's ability to 
meet the financing entity requirement for purposes of CDFI 
certification: Said Affiliate must meet the other certification 
criteria in accordance with the existing regulations governing CDFI 
certification.
    (ii) The revised regulation also states that, solely for the 
purpose of participating in the CDFI Bond Guarantee Program, the 
Affiliate's provision of Financial Products and Financial Services, 
Development Services, and/or other similar financing transactions need 
not be arms-length in nature if such transaction is by and between the 
Affiliate and Controlling CDFI, pursuant to an operating agreement that 
includes management and ownership provisions and that is effective 
prior to the submission of a CDFI Certification Application and is in 
form and substance that is acceptable to the CDFI Fund.
    (iii) An Affiliate whose CDFI certification is based on the 
financing activity or track record of a Controlling CDFI is not 
eligible to receive financial or technical assistance awards or tax 
credit allocations under any other CDFI Fund program until such time 
that the Affiliate meets the financing entity requirement based on its 
own activity or track record.
    (iv) If an Affiliate elects to satisfy the financing entity 
requirement based on the financing activity or track record of a 
Controlling CDFI, and if the CDFI Fund approves such Affiliate as an 
Eligible CDFI for the purpose of participation in the CDFI Bond 
Guarantee Program, said Affiliate's CDFI certification will terminate 
if: (A) It does not enter into Bond Loan documents with its Qualified 
Issuer within one (1) year of the date that it signs the term sheet 
(which is an exhibit to the Agreement to Guarantee); (B) it ceases to 
be an Affiliate of the Controlling CDFI; or (C) it ceases to be a 
Certified CDFI.
    (c) Target Market requirement (12 CFR 1805.201(b)(3)):
    (i) To be a Certified CDFI, an entity must serve at least one 
eligible Target Market (either an Investment Area or a Targeted 
Population) by directing at least 60% of all of its Financial Product 
activities to one or more eligible Target Market.
    (ii) Solely for the purpose of participation as an Eligible CDFI in 
the FY 2015 application round of the CDFI Bond Guarantee Program, an 
Affiliate of a Controlling CDFI may be deemed to meet the Target Market 
requirement by virtue of serving either:
    (A) an Investment Area through ``borrowers or investees'' that 
serve the Investment Area or provide significant benefits to its 
residents (pursuant to 12 CFR 1805.201(b)(3)(ii)(F)). For purposes of 
this NOGA, the term ``borrower'' or ``investee'' includes a borrower of 
a loan originated by the Controlling CDFI that has been transferred to 
the Affiliate as lender (which loan must meet Secondary Loan 
Requirements), pursuant to an operating agreement with the Affiliate 
that includes ownership/investment and management provisions, which 
agreement must be in effect prior to the submission of a CDFI 
Certification Application and in form and substance that is acceptable 
to the CDFI Fund. If an Affiliate has more than one Controlling CDFIs, 
it may meet this Investment Area requirement through one or more of 
such Controlling CDFIs' Investment Areas; or
    (B) a Targeted Population ``indirectly or through borrowers or 
investees that directly serve or provide significant benefits to such 
members'' (pursuant to 12 CFR 1805.201(b)(3)(iii)(B)) if the 
Controlling CDFI's financing entity activities serve the Affiliate's 
Targeted Population pursuant to an operating agreement that includes 
ownership/investment and management provisions by and between the 
Affiliate and the Controlling CDFI, which agreement must be in effect 
prior to the submission of a CDFI Certification Application and in form 
and substance that is acceptable to the CDFI Fund. If an Affiliate has 
more than one Controlling CDFIs, it may meet this Targeted Population 
requirement through one or more of such Controlling CDFIs' Targeted 
Populations.
    (iii) An Affiliate that meets the Target Market requirement through 
paragraphs (A) and (B) above, is not eligible to receive financial or 
technical assistance awards or tax credit allocations under any other 
CDFI Fund program until such time that the Affiliate meets the Target 
Market requirements based on its own activity or track record.
    (d) Development Services requirement (12 CFR 1805.201(b)(4)): To be 
a Certified CDFI, an entity must provide Development Services in 
conjunction with its Financial Products. Solely for the purpose of 
participation as an Eligible CDFI in the FY 2015 application round of 
the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may 
be deemed to meet this requirement if: (i) Its Development Services are 
provided by the Controlling CDFI pursuant to an operating agreement 
that includes management and ownership provisions with the Controlling 
CDFI that is effective prior to the submission of a CDFI Certification 
Application and in form and substance that is acceptable to the CDFI 
Fund and (ii) the Controlling CDFI must have provided Development 
Services in conjunction with the transactions that the Affiliate is 
likely to purchase, prior to the date of submission of the CDFI 
Certification Application.
    (e) Accountability requirement (12 CFR 1805.201(b)(5)): To be a 
Certified CDFI, an entity must maintain accountability to residents of 
its Investment Area or Targeted Population through representation on 
its governing board and/or advisory board(s), or through focus groups, 
community meetings, and/or customer surveys. Solely for the purpose of 
participation as an Eligible CDFI in the FY 2015 application round of 
the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may 
be deemed to meet this requirement only if it has a governing board 
and/or advisory board that has the same composition as the Controlling 
CDFI and such governing board or advisory board has convened and/or 
conducted Affiliate business prior to the date of submission of the 
CDFI Certification Application.
    (f) Non-government entity requirement (12 CFR 1805.201(b)(6)): To 
be a Certified CDFI, an entity can neither be a government entity nor 
be controlled by one or more governmental entities.
    (g) For the FY 2015 application round of the CDFI Bond Guarantee 
Program, only one Affiliate per Controlling CDFI may participate as an 
Eligible CDFI.

[[Page 19404]]

However, there may be more than one Affiliate participating as an 
Eligible CDFI in any given Bond Issue.
    3. Operating agreement: An operating agreement between an Affiliate 
and its Controlling CDFI must provide, among other items: (i) 
Conclusory evidence that the Controlling CDFI Controls the Affiliate, 
through investment and/or ownership; (ii) explanation of all roles, 
responsibilities and activities to be performed by the Controlling CDFI 
including, but not limited to, governance, financial management, loan 
underwriting and origination, record-keeping, insurance, treasury 
services, human resources and staffing, legal counsel, dispositions, 
marketing, general administration, and financial reporting; (iii) 
compensation arrangements; (iv) the term and termination provisions; 
(v) indemnification provisions; (vi) management and ownership 
provisions; and (vii) default and recourse provisions.
    4. For more detailed information on CDFI certification 
requirements, please review the CDFI certification regulation (12 CFR 
1805.201, as revised concurrently with the issuance of this NOGA) and 
CDFI Certification Application materials/guidance posted on the CDFI 
Fund's Web site. Interested parties should note that there are specific 
regulations and requirements that apply to Depository Institution 
Holding Companies, Insured Depository Institutions, Insured Credit 
Unions, and State-Insured Credit Unions.
    5. An Affiliate of a Controlling CDFI that wishes to apply to be 
designated as an Eligible CDFI in the FY 2015 application round of the 
CDFI Bond Guarantee Program must submit a CDFI Certification 
Application to the CDFI Fund by 5:00 p.m. ET, May 22, 2015. Any CDFI 
Certification Application received after such date and time, as well as 
incomplete applications that are not amended by the deadline, will not 
be considered for the FY 2015 application round of the CDFI Bond 
Guarantee Program.
    6. In no event will the Secretary of the Treasury approve a 
Guarantee for a Bond from which a Bond Loan will be made to an entity 
that is not an Eligible CDFI. The Secretary must make FY 2015 Guarantee 
Application decisions, and the CDFI Fund must close the corresponding 
Bonds and Bond Loans, prior to the end of FY 2015 (September 30, 2015). 
Accordingly, it is essential that CDFI Certification Applications are 
submitted timely and in complete form, with all materials and 
information needed for the CDFI Fund to make a certification decision. 
Information on CDFI certification, the CDFI Certification Application, 
and application submission instructions may be found on the CDFI Fund's 
Web site at www.cdfifund.gov.
    B. Application Submission. 1. Electronic submission. All Qualified 
Issuer Applications and Guarantee Applications must be submitted 
electronically through myCDFIFund, the CDFI Fund's internet-based 
interface. Applications sent by mail, fax, or other form will not be 
permitted, except in circumstances that the CDFI Fund, in its sole 
discretion, deems acceptable. Please note that Applications will not be 
accepted through Grants.gov.
    2. Applicant identifier numbers. Please note that, pursuant to 
Office of Management and Budget (OMB) guidance (68 FR 38402), each 
Qualified Issuer applicant and Guarantee applicant must provide, as 
part of its Application, its Dun and Bradstreet Data Universal 
Numbering System (DUNS) number, as well as DUNS numbers for its 
proposed Program Administrator, its proposed Servicer, and each 
Certified CDFI that is included in the Qualified Issuer Application and 
Guarantee Application. In addition, each Application must include a 
valid and current Employer Identification Number (EIN), with a letter 
or other documentation from the IRS confirming the Qualified Issuer 
applicant's EIN, as well as EINs for its proposed Program 
Administrator, its proposed Servicer, and each Certified CDFIs that is 
included in any Application. An Application that does not include such 
DUNS numbers, EINs and documentation is incomplete and will be rejected 
by the CDFI Fund. Applicants should allow sufficient time for the IRS 
and/or Dun and Bradstreet to respond to inquiries and/or requests for 
the required identification numbers.
    3. System for Award Management (SAM). On July 30, 2012, the Central 
Contractor Registration (CCR) transitioned to SAM. All data in the 
registrant database has been migrated from CCR into SAM. Any entity 
that needs to create a new account or update its current registration 
must register for a user account in SAM. Registering with SAM is 
required for each Qualified Issuer applicant, its proposed Program 
Administrator, its proposed Servicer, and each Certified CDFI that is 
included in any Application. The CDFI Fund will not consider any 
Applications that do not meet the requirement that each entity must be 
properly registered before the date of Application submission. The CDFI 
Fund does not manage the SAM registration process, so entities must 
contact SAM directly for issues related to registration. The CDFI Fund 
strongly encourages all applicants to ensure that their SAM 
registration (and the SAM registration for their Program 
Administrators, Servicers and each Certified CDFI that is included in 
the Qualified Issuer Application and Guarantee Application) is updated 
and that their accounts have not expired. For information regarding SAM 
registration, please visit https://www.sam.gov/sam.
    4. myCDFIFund accounts. Each Qualified Issuer applicant, its 
proposed Program Administrator, its proposed Servicer, and each 
Certified CDFI that is included in the Qualified Issuer Application or 
Guarantee Application must register User and Organization accounts in 
myCDFIFund, the CDFI Fund's Internet-based interface. Each such entity 
must be registered as an Organization and register at least one (1) 
User Account in myCDFIFund in order for any Application to be 
considered complete. As myCDFIFund is the CDFI Fund's primary means of 
communication with applicants with regard to its programs, each such 
entity must make sure that it updates the contact information in its 
myCDFIFund account before any Application is submitted. For more 
information on myCDFIFund, please see the ``Frequently Asked 
Questions'' link posted at https://www.cdfifund.gov/myCDFI/Help/Help.asp.
    C. Form of Application. 1. As of the date of this NOGA, the 
Qualified Issuer Application, the Guarantee Application and related 
application guidance may be found on the CDFI Bond Guarantee Program's 
page on the CDFI Fund's Web site at http://www.cdfifund.gov.
    2. Paperwork Reduction Act. Under the Paperwork Reduction Act (44 
U.S.C. chapter 35), an agency may not conduct or sponsor a collection 
of information, and an individual is not required to respond to a 
collection of information, unless it displays a valid OMB control 
number. Pursuant to the Paperwork Reduction Act, the Qualified Issuer 
Application, the Guarantee Application, and the Secondary Loan 
Requirements have been assigned the following control number: 1559-
0044.
    3. Application deadlines. In order to be considered for the 
issuance of a Guarantee under FY 2015 program authority, Qualified 
Issuer Applications must be submitted by June 5, 2015 and Guarantee 
Applications must be submitted by June 12, 2015. Qualified Issuer 
Applications and Guarantee Applications received in FY 2014, and that 
were neither withdrawn nor declined, will be considered under FY 2015 
authority. If applicable, CDFI Certification Applications must be

[[Page 19405]]

received by the CDFI Fund by 5:00 p.m. ET, May 22, 2015.
    4. Format. Detailed Qualified Issuer Application and Guarantee 
Application content requirements are found in the Applications and 
application guidance. The CDFI Fund will read only information 
requested in the Application and reserves the right not to read 
attachments or supplemental materials that have not been specifically 
requested in this NOGA, the Qualified Issuer or the Guarantee 
Application. Supplemental materials or attachments such as letters of 
public support or other statements that are meant to bias or influence 
the Application review process will not be read.
    5. Application revisions. After submitting a Qualified Issuer 
Application or a Guarantee Application, the applicant will not be 
permitted to revise or modify the Application in any way unless 
authorized or requested by the CDFI Fund.
    6. Material changes.
    (a) In the event that there are material changes after the 
submission of a Qualified Issuer Application prior to the designation 
as a Qualified Issuer, the applicant must notify the CDFI Fund of such 
material changes information in a timely and complete manner. The CDFI 
Fund will evaluate such material changes, along with the Qualified 
Issuer Application, to approve or deny the designation of the Qualified 
Issuer.
    (b) In the event that there are material changes after the 
submission of a Guarantee Application (including, but not limited to, a 
revision of the Capital Distribution Plan or a change in the Eligible 
CDFIs that are included in the Application) prior to or after the 
designation as a Qualified Issuer or approval of a Guarantee 
Application or Guarantee, the applicant must notify the CDFI Fund of 
such material changes information in a timely and complete manner. The 
Guarantor will evaluate such material changes, along with the Guarantee 
Application, to approve or deny the Guarantee Application and/or 
determine whether to modify the terms and conditions of the Agreement 
to Guarantee. This evaluation may result in a delay of the approval or 
denial of a Guarantee Application.
    D. Eligibility and completeness review. The CDFI Fund will review 
each Qualified Issuer and Guarantee Application to determine whether it 
is complete and the applicant meets eligibility requirements described 
in the Regulations, this NOGA, and the Applications. An incomplete 
Qualified Issuer Application or Guarantee Application, or one that does 
not meet eligibility requirements, will be rejected. If the CDFI Fund 
determines that additional information is needed to assess the 
Qualified Issuer's and/or the Certified CDFIs' ability to participate 
in and comply with the requirements of the CDFI Bond Guarantee Program, 
the CDFI Fund may require that the Qualified Issuer furnish additional, 
clarifying, confirming or supplemental information. If the CDFI Fund 
requests such additional, clarifying, confirming or supplemental 
information, the Qualified Issuer must provide it within the timeframes 
requested by the CDFI Fund. Until such information is provided to the 
CDFI Fund, the Qualified Issuer Application or Guarantee Application 
will not be moved forward for the substantive review process. The 
Guarantor shall approve or deny a Guarantee Application no later than 
90 days after the date the Guarantee Application has been advanced for 
substantive review.
    E. Regulated entities. In the case of Qualified Issuer applicants, 
proposed Program Administrators, proposed Servicers and Certified CDFIs 
that are included in the Qualified Issuer Application or Guarantee 
Application that are Insured Depository Institutions and Insured Credit 
Unions, the CDFI Fund will consider information provided by, and views 
of, the Appropriate Federal Banking Agencies. If any such entity is a 
CDFI bank holding company, the CDFI Fund will consider information 
provided by the Appropriate Federal Banking Agencies of the CDFI bank 
holding company and its CDFI bank(s). Throughout the Application review 
process, the CDFI Fund will consult with the Appropriate Federal 
Banking Agency about the applicant's financial safety and soundness. If 
the Appropriate Federal Banking Agency identifies safety and soundness 
concerns, the CDFI Fund will assess whether the concerns cause or will 
cause the applicant to be incapable of undertaking activities related 
to the CDFI Bond Guarantee Program. The CDFI Fund also reserves the 
right to require a regulated applicant to improve safety and soundness 
conditions prior to being approved as a Qualified Issuer or Eligible 
CDFI. In addition, the CDFI Fund will take into consideration Community 
Reinvestment Act assessments of Insured Depository Institutions and/or 
their Affiliates.
    F. Prior CDFI Fund awardees. All applicants must be aware that 
success under any of the CDFI Fund's programs is not indicative of 
success under this NOGA. Prior CDFI Fund awardees should note the 
following:
    1. Pending resolution of noncompliance. If a Qualified Issuer 
applicant, its proposed Program Administrator, its proposed Servicer, 
or any of the Certified CDFIs included in the Qualified Issuer 
Application or Guarantee Application, is a prior awardee or allocatee 
under any CDFI Fund program and (i) it has submitted reports to the 
CDFI Fund that demonstrate noncompliance with a previously executed 
agreement with the CDFI Fund, and (ii) the CDFI Fund has yet to make a 
final determination as to whether the entity is in default of its 
previously executed agreement, the CDFI Fund will consider the 
Qualified Issuer Application or Guarantee Application pending full 
resolution, in the sole determination of the CDFI Fund, of the 
noncompliance.
    2. Default status. The CDFI Fund will not consider a Qualified 
Issuer Application or Guarantee Application if the applicant, its 
proposed Program Administrator, its proposed Servicer, or any of the 
Certified CDFIs included in the Qualified Issuer Application or 
Guarantee Application, is a prior awardee or allocatee under any CDFI 
Fund program if, as of the date of Qualified Issuer Application or 
Guarantee Application submission, (i) the CDFI Fund has made a 
determination that such entity is in default of a previously executed 
agreement and (ii) the CDFI Fund has provided written notification of 
such determination to the Qualified Issuer applicant indicating the 
length of time the default status is effective. Such entities will be 
ineligible to submit a Qualified Issuer Application, or be included in 
such submission, as the case may be, so long as the applicant's, its 
proposed Program Administrator's, its proposed Servicer's, or such 
Certified CDFI's prior award or allocation remains in default status or 
such other time period as specified by the CDFI Fund in writing.
    3. Undisbursed award funds. The CDFI Fund will not consider a 
Qualified Issuer Application or Guarantee Application, if the 
applicant, its proposed Program Administrator, its proposed Servicer, 
or any Certified CDFI that is included in the Qualified Issuer 
Application or Guarantee Application, is an awardee under any CDFI Fund 
program and has undisbursed award funds (as defined below) as of the 
Qualified Issuer Application or Guarantee Application submission date. 
The CDFI Fund will include the combined undisbursed prior awards, as of 
the date of the Qualified Issuer Application submission, of the 
applicant, the proposed Program Administrator, the proposed Servicer,

[[Page 19406]]

and any Certified CDFIs included in the application.
    For purposes of the calculation of undisbursed award funds for the 
Bank Enterprise Award (BEA) Program, only awards made to the Qualified 
Issuer applicant, its proposed Program Administrator, its proposed 
Servicer, and any Certified CDFI included in the Qualified Issuer 
Application, three to five calendar years prior to the end of the 
calendar year of the Qualified Issuer Application submission date are 
included. For purposes of the calculation of undisbursed award funds 
for the CDFI Program, the Native American CDFI Assistance (NACA) 
Program, and the Capital Magnet Fund (CMF), only awards made to the 
Qualified Issuer applicant, its proposed Program Administrator, its 
proposed Servicer, and any Certified CDFI included in the Qualified 
Issuer Application, two to five calendar years prior to the end of the 
calendar year of the Qualified Issuer Application submission date are 
included.
    Undisbursed awards cannot exceed five percent of the total 
includable awards for the Applicant's BEA/CDFI/NACA/CMF awards as of 
the date of submission of the Qualified Issuer Application. The 
calculation of undisbursed award funds does not include: (i) Tax credit 
allocation authority made available through the New Markets Tax Credit 
Program; (ii) any award funds for which the CDFI Fund received a full 
and complete disbursement request from the awardee by the date of 
submission of the Qualified Issuer Application; (iii) any award funds 
for an award that has been terminated in writing by the CDFI Fund or 
de-obligated by the CDFI Fund; or (iv) any award funds for an award 
that does not have a fully executed assistance or award agreement. The 
CDFI Fund strongly encourages Qualified Issuer applicants, proposed 
Program Administrators, proposed Servicers, and any Certified CDFIs 
included in a Qualified Issuer Application that wish to request 
disbursements of undisbursed funds from prior awards to provide the 
CDFI Fund with a complete disbursement request at least 10 business 
days prior to the date of submission of a Qualified Issuer Application.
    G. Review of Bond and Bond Loan documents. Each Qualified Issuer 
and proposed Eligible CDFI will be required to certify that its 
appropriate senior management, and its respective legal counsel, has 
read the Regulations (set forth at 12 CFR part 1808, as well as the 
CDFI certification regulations set forth at 12 CFR 1805.201, as 
amended, and the environmental quality regulations set forth at 12 CFR 
part 1815) and the template Bond Documents and Bond Loan documents 
posted on the CDFI Fund's Web site including, but not limited to, the 
following: Bond Trust Indenture, Supplemental Indenture, Bond Loan 
Agreement, Promissory Note, Bond Purchase Agreement, Designation 
Notice, Secretary's Guarantee, Collateral Assignment, Reimbursement 
Note, UCC-1 Bond Trust Collateral, UCC-1 Trust Estate, Certificate of 
the Qualified Issuer, Certificate of the Borrower, Lobbying 
Certificate, Certificate of Insurance Consultant, Opinion of Bond 
Counsel, Opinion of Counsel to the Borrower, Escrow Agreement, and 
Closing Checklist.
    H. Contact the CDFI Fund. A Qualified Issuer applicant, its 
proposed Program Administrator, its proposed Servicer, or any Certified 
CDFIs included in the Qualified Issuer Application or Guarantee 
Application that are prior CDFI Fund awardees are advised to: (i) 
Comply with requirements specified in CDFI Fund assistance, allocation, 
and/or award agreement(s), and (ii) contact the CDFI Fund to ensure 
that all necessary actions are underway for the disbursement or 
deobligation of any outstanding balance of said prior award(s). Any 
such parties that are unsure about the disbursement status of any prior 
award should contact the CDFI Fund's Senior Resource Manager via email 
at [email protected]. All outstanding reports and 
compliance questions should be directed to Certification, Compliance 
Monitoring, and Evaluation support by email at [email protected] or 
by telephone at (202) 653-0423. The CDFI Fund will respond to 
applicants' reporting, compliance, or disbursement questions between 
the hours of 9:00 a.m. and 5:00 p.m. ET, starting on the date of the 
publication of this NOGA.
    I. Evaluating prior award performance. In the case of a Qualified 
Issuer, a proposed Program Administrator, a proposed Servicer, or 
Certified CDFI that has received awards from other Federal programs, 
the CDFI Fund reserves the right to contact officials from the 
appropriate Federal agency or agencies to determine whether the entity 
is in compliance with current or prior award agreements, and to take 
such information into consideration before issuing a Guarantee. In the 
case of such an entity that has previously received funding through any 
CDFI Fund program, the CDFI Fund will review those entities that have a 
history of providing late reports and consider such history in the 
context of organizational capacity and the ability to meet future 
reporting requirements.
    The CDFI Fund may also bar from consideration any such entity that 
has, in any proceeding instituted against it in, by, or before any 
court, governmental, or administrative body or agency, received a final 
determination within the last two (2) years indicating that the entity 
has discriminated on the basis of race, color, national origin, 
disability, age, marital status, receipt of income from public 
assistance, religion, or sex, including but not limited to 
discrimination under (i) Title VI of the Civil Rights Act of 1964 (Pub. 
L. 88-352) which prohibits discrimination on the basis of race, color 
or national origin; (ii) Title IX of the Education Amendments of 1972, 
as amended (20 U.S.C. 1681-1683, 1685-1686), which prohibits 
discrimination on the basis of sex; (iii) Section 504 of the 
Rehabilitation Act of 1973, as amended (29 U.S.C. 794), which prohibits 
discrimination on the basis of handicaps; (iv) the Age Discrimination 
Act of 1975, as amended (42 U.S.C. 6101-6107), which prohibits 
discrimination on the basis of age; (v) the Drug Abuse Office and 
Treatment Act of 1972 (Pub. L. 92-255), as amended, relating to 
nondiscrimination on the basis of drug abuse; (vi) the Comprehensive 
Alcohol Abuse and Alcoholism Prevention, Treatment and Rehabilitation 
Act of 1970 (Pub. L. 91-616), as amended, relating to nondiscrimination 
on the basis of alcohol abuse or alcoholism; (vii) Sections 523 and 527 
of the Public Health Service Act of 1912 (42 U.S.C. 290dd-3 and 290ee-
3), as amended, relating to confidentiality of alcohol and drug abuse 
patient records; (viii) Title VIII of the Civil Rights Act of 1968 (42 
U.S.C. 3601 et seq.), as amended, relating to nondiscrimination in the 
sale, rental or financing of housing; (ix) any other nondiscrimination 
provisions in the specific statute(s) under which Federal assistance is 
being made; and (x) the requirements of any other nondiscrimination 
statutes which may apply to the CDFI Bond Guarantee Program.
    J. Changes to review procedures. The CDFI Fund reserves the right 
to change its completeness, eligibility and evaluation criteria and 
procedures if the CDFI Fund deems it appropriate. If such changes 
materially affect the CDFI Fund's decision to approve or deny a 
Qualified Issuer Application, the CDFI Fund will provide information 
regarding the changes through the CDFI Fund's Web site.

[[Page 19407]]

    K. Decisions are final. The CDFI Fund's Qualified Issuer 
Application decisions are final. The Guarantor's Guarantee Application 
decisions are final. There is no right to appeal the decisions. Any 
applicant that is not approved by the CDFI Fund or the Guarantor may 
submit a new Application and will be considered based on the newly 
submitted Application. Such newly submitted Applications will be 
reviewed along with all other pending Applications in the order in 
which they are received, or by such other criteria that the CDFI Fund 
may establish and publish, in its sole discretion.

III. Qualified Issuer Application

    A. General. This NOGA invites interested parties to submit a 
Qualified Issuer Application to be approved as a Qualified Issuer under 
the CDFI Bond Guarantee Program.
    1. Qualified Issuer. The Qualified Issuer is a Certified CDFI, or 
an entity designated by a Certified CDFI to issue Bonds on its behalf, 
that meets the requirements of the Regulations and this NOGA, and that 
has been approved by the CDFI Fund pursuant to review and evaluation of 
its Qualified Issuer Application. The Qualified Issuer will, among 
other duties: (i) Organize the Eligible CDFIs that have designated it 
to serve as their Qualified Issuer; (ii) prepare and submit a complete 
and timely Qualified Issuer and Guarantee Application to the CDFI Fund; 
(iii) if the Qualified Issuer Application is approved by the CDFI Fund 
and the Guarantee Application is approved by the Guarantor, prepare the 
Bond Issue; (iv) manage all Bond Issue servicing, administration, and 
reporting functions; (v) make Bond Loans; (vi) oversee the financing or 
refinancing of Secondary Loans; (vii) ensure compliance throughout the 
duration of the Bond with all provisions of the Regulations, and Bond 
Documents and Bond Loan Documents entered into between the Guarantor, 
the Qualified Issuer, and the Eligible CDFI; and (viii) ensure that the 
Master Servicer/Trustee complies with the Bond Trust Indenture and all 
other applicable regulations. Further, the role of the Qualified Issuer 
also is to ensure that its proposed Eligible CDFI applicants possess 
adequate and well performing assets to support the debt (Bond Loan) the 
entity wishes to incur (borrow).
    2. Qualified Issuer Application. The Qualified Issuer Application 
is the document that an entity seeking to serve as a Qualified Issuer 
submits to the CDFI Fund to apply to be approved as a Qualified Issuer 
prior to consideration of a Guarantee Application.
    3. Qualified Issuer Application evaluation, general. Each Qualified 
Issuer Application will be evaluated by the CDFI Fund and, if 
acceptable, the applicant will be approved as a Qualified Issuer, in 
the sole discretion of the CDFI Fund. The CDFI Fund's Qualified Issuer 
Application review and evaluation process is based on established 
procedures, which may include interviews of applicants and/or site 
visits to applicants conducted by the CDFI Fund. Through the 
Application review process, the CDFI Fund will evaluate Qualified 
Issuer applicants on a merit basis and in a fair and consistent manner. 
Each Qualified Issuer applicant will be reviewed on its ability to 
successfully carry out the responsibilities of a Qualified Issuer 
throughout the life of the Bond. The Applicant must currently meet the 
criteria established in the Regulations to be deemed a Qualified 
Issuer. Qualified Issuer Applications that are forward-looking or 
speculate as to the eventual acquisition of the required capabilities 
and criteria are unlikely to be approved. Qualified Issuer Application 
processing will be initiated in chronological order by date of receipt; 
however, Qualified Issuer Applications that are incomplete or require 
the CDFI Fund to request additional or clarifying information may delay 
the ability of the CDFI Fund to deem the Qualified Application complete 
and move it to the next phase of review. Submitting a substantially 
incomplete application earlier than other applicants does not ensure 
first approval.
    B. Qualified Issuer Application: Eligibility. 1. CDFI certification 
requirements. The Qualified Issuer applicant must be a Certified CDFI 
or an entity designated by a Certified CDFI to issue Bonds on its 
behalf.
    2. Designation and attestation by Certified CDFIs. An entity 
seeking to be approved by the CDFI Fund as a Qualified Issuer must be 
designated as a Qualified Issuer by at least one Certified CDFI. A 
Qualified Issuer may not designate itself. The Qualified Issuer 
applicant will prepare and submit a complete and timely Qualified 
Issuer Application to the CDFI Fund in accordance with the requirements 
of the Regulations, this NOGA, and the Application. A Certified CDFI 
must attest in the Qualified Issuer Application that it has designated 
the Qualified Issuer to act on its behalf and that the information in 
the Qualified Issuer Application regarding it is true, accurate and 
complete.
    C. Substantive review and approval process. 1. Substantive review. 
(a) If the CDFI Fund determines that the Qualified Issuer Application 
is complete and eligible, the CDFI Fund will undertake a substantive 
review in accordance with the criteria and procedures described in the 
Regulations, this NOGA, the Qualified Issuer Application, and CDFI Bond 
Guarantee Program policies.
    (b) As part of the substantive evaluation process, the CDFI Fund 
reserves the right to contact the Qualified Issuer applicant (as well 
as its proposed Program Administrator, its proposed Servicer, and each 
designating Certified CDFI in the Qualified Issuer Application) by 
telephone, email, mail, or through on-site visits for the purpose of 
obtaining additional, clarifying, confirming, or supplemental 
application information. The CDFI Fund reserves the right to collect 
such additional, clarifying, confirming, or supplemental information 
from said entities as it deems appropriate. If contacted for 
additional, clarifying, confirming, or supplemental information, said 
entities must respond within the time parameters set by the CDFI Fund 
or the Qualified Issuer Application will be rejected.
    2. Qualified Issuer criteria. In total, there are more than 60 
individual criteria or sub-criteria used to evaluate a Qualified Issuer 
applicant and all materials provided in the Qualified Issuer 
Application will be used to evaluate the applicant. Qualified Issuer 
determinations will be made based on Qualified Issuer applicants' 
experience and expertise, in accordance with the following criteria:
    (a) Organizational capability. (i) The Qualified Issuer applicant 
must demonstrate that it has the appropriate expertise, capacity, 
experience, and qualifications to issue Bonds for Eligible Purposes, or 
is otherwise qualified to serve as Qualified Issuer, as well as manage 
the Bond Issue on the terms and conditions set forth in the 
Regulations, this NOGA, and the Bond Documents, satisfactory to the 
CDFI Fund.
    (ii) The Qualified Issuer applicant must demonstrate that it has 
the appropriate expertise, capacity, experience and qualifications to 
originate, underwrite, service and monitor Bond Loans for Eligible 
Purposes, targeted to Low-Income Areas and Underserved Rural Areas.
    (iii) The Qualified Issuer applicant must demonstrate that it has 
the appropriate expertise, capacity, experience and qualifications to 
manage the disbursement process set forth in the

[[Page 19408]]

Regulations at 12 CFR 1808.302 and 1808.307.
    (b) Servicer. The Qualified Issuer applicant must demonstrate that 
it has (either directly or contractually through another designated 
entity) the appropriate expertise, capacity, experience and 
qualifications, or is otherwise qualified to serve as Servicer. The 
Qualified Issuer Application must provide information that demonstrates 
that the Qualified Issuer's Servicer has the expertise, capacity, 
experience and qualifications necessary to perform certain required 
administrative duties (including, but not limited to, Bond Loan 
servicing functions).
    (c) Program Administrator. The Qualified Issuer applicant must 
demonstrate that it has (either directly or contractually through 
another designated entity) the appropriate expertise, capacity, 
experience and qualifications, or is otherwise qualified to serve as 
Program Administrator. The Qualified Issuer Application must provide 
information that demonstrates that the Qualified Issuer's Program 
Administrator has the expertise, capacity, experience and 
qualifications necessary to perform certain required administrative 
duties (including, but not limited to, compliance monitoring and 
reporting functions).
    (d) Strategic alignment. The Qualified Issuer applicant will be 
evaluated on its strategic alignment with the CDFI Bond Guarantee 
Program on factors that include, but are not limited to: (i) Its 
mission's strategic alignment with community and economic development 
objectives set forth in the Riegle Act at 12 U.S.C. 4701; (ii) its 
strategy for deploying the entirety of funds that may become available 
to the Qualified Issuer through the proposed Bond Issue; (iii) its 
experience providing up to 30-year capital to CDFIs or other borrowers 
in Low-Income Areas or Underserved Rural Areas as such terms are 
defined in the Regulations at 12 CFR 1808.102; (iv) its track record of 
activities relevant to its stated strategy; and (v) other factors 
relevant to the Qualified Issuer's strategic alignment with the 
program.
    (e) Experience. The Qualified Issuer applicant will be evaluated on 
factors that demonstrate that it has previous experience: (i) 
Performing the duties of a Qualified Issuer including making bond 
issuances, loan servicing, program administration, underwriting, 
financial reporting, and loan administration; (ii) lending in Low-
Income Areas and Underserved Rural Areas; and (iii) indicating that the 
Qualified Issuer's current principals and team members have 
successfully performed the required duties, and that previous 
experience is applicable to the current principals and team members.
    (f) Management and staffing. The Qualified Issuer applicant must 
demonstrate that it has sufficiently strong management and staffing 
capacity to undertake the duties of Qualified Issuer. The applicant 
must also demonstrate that its proposed Program Administrator and its 
proposed Servicer have sufficiently strong management and staffing 
capacity to undertake their respective requirements under the CDFI Bond 
Guarantee Program. Strong management and staffing capacity is evidenced 
by factors that include, but are not limited to: (i) A sound track 
record of delivering on past performance; (ii) a documented succession 
plan; (iii) organizational stability including staff retention; and 
(iv) a clearly articulated, reasonable and well-documented staffing 
plan.
    (g) Financial strength. The Qualified Issuer applicant must 
demonstrate the strength of its financial capacity and activities 
including, among other items, financially sound business practices 
relative to the industry norm for bond issuers, as evidenced by reports 
of Appropriate Federal Banking Agencies, Appropriate State Agencies, or 
auditors. Such financially sound business practices will demonstrate: 
(i) The financial wherewithal to perform activities related to the Bond 
Issue such as administration and servicing; (ii) the ability to 
originate, underwrite, close, and disburse loans in a prudent manner; 
(iii) whether the applicant is depending on external funding sources 
and the reliability of long-term access to such funding; (iv) whether 
there are foreseeable counterparty issues or credit concerns that are 
likely to affect the applicant's financial stability; and (v) a budget 
that reflects reasonable assumptions about upfront costs as well as 
ongoing expenses and revenues.
    (h) Systems and information technology. The Qualified Issuer 
applicant must demonstrate that it (as well as its proposed Program 
Administrator and its proposed Servicer) has, among other things: (i) A 
strong information technology capacity and the ability to manage loan 
servicing, administration, management and document retention; (ii) 
appropriate office infrastructure and related technology to carry out 
the CDFI Bond Guarantee Program activities; and (iii) sufficient backup 
and disaster recovery systems to maintain uninterrupted business 
operations.
    (i) Pricing structure. The Qualified Issuer applicant must provide 
its proposed pricing structure for performing the duties of Qualified 
Issuer, including the pricing for the roles of Program Administrator 
and Servicer. Although the pricing structure and fees shall be decided 
by negotiation between market participants without interference or 
approval by the CDFI Fund, the CDFI Fund will evaluate whether the 
Qualified Issuer applicant's proposed pricing structure is feasible to 
carry out the responsibilities of a Qualified Issuer over the life of 
the Bond and sound implementation of the program.
    (j) Other criteria. The Qualified Issuer applicant must meet such 
other criteria as may be required by the CDFI Fund, as set forth in the 
Qualified Issuer Application or required by the CDFI Fund in its sole 
discretion, for the purposes of evaluating the merits of a Qualified 
Issuer Application. The CDFI Fund may request an on-site review of 
Qualified Issuer applicant to confirm materials provided in the written 
application, as well as to gather additional due diligence information. 
The on-site reviews are a critical component of the application review 
process and will generally be conducted for all applicants not 
regulated by an Appropriate Federal Banking Agency or Appropriate State 
Agency. The CDFI Fund reserves the right to conduct a site visit of 
regulated entities, in its sole discretion.
    (k) Third-party data sources. The CDFI Fund, in its sole 
discretion, may consider information from third-party sources 
including, but not limited to, periodicals or publications, publicly 
available data sources, or subscriptions services for additional 
information about the Qualified Issuer applicant, the proposed Program 
Administrator, the proposed Servicer and each Certified CDFI that is 
included in the Qualified Issuer Application. Any additional 
information received from such third-party sources will be reviewed and 
evaluated through a systematic and formalized process.
    D. Notification of Qualified Issuer determination. Each Qualified 
Issuer applicant will be informed of the CDFI Fund's decision in 
writing, by email using the addresses maintained in the entity's 
myCDFIFund account. The CDFI Fund will not notify the proposed Program 
Administrator, the proposed Servicer, or the Certified CDFIs included 
in the Qualified Issuer Application of its decision regarding the 
Qualified Issuer Application; such contacts are the responsibility of 
the Qualified Issuer applicant.
    E. Qualified Issuer Application rejection. In addition to 
substantive reasons based on the merits of its review, the CDFI Fund 
reserves the right

[[Page 19409]]

to reject a Qualified Issuer Application if information (including 
administrative errors) comes to the attention of the CDFI Fund that 
adversely affects an applicant's eligibility, adversely affects the 
CDFI Fund's evaluation of a Qualified Issuer Application, or indicates 
fraud or mismanagement on the part of a Qualified Issuer applicant or 
its proposed Program Administrator, its proposed Servicer, and any 
Certified CDFI included in the Qualified Issuer Application. If the 
CDFI Fund determines that any portion of the Qualified Issuer 
Application is incorrect in any material respect, the CDFI Fund 
reserves the right, in its sole discretion, to reject the Application.

IV. Guarantee Applications

    A. General. This NOGA invites Qualified Issuers to submit a 
Guarantee Application to be approved for a Guarantee under the CDFI 
Bond Guarantee Program.
    1. Guarantee Application.
    (a) The Guarantee Application is the application document that a 
Qualified Issuer (in collaboration with the Eligible CDFI(s) that seek 
to be included in the proposed Bond Issue) must submit to the CDFI Fund 
in order to apply for a Guarantee. The Qualified Issuer shall provide 
all required information in its Guarantee Application to establish that 
it meets all criteria set forth in the Regulations at 12 CFR 1808.501 
and this NOGA and can carry out all CDFI Bond Guarantee Program 
requirements including, but not limited to, information that 
demonstrates that the Qualified Issuer has the appropriate expertise, 
capacity, and experience and is qualified to make, administer and 
service Bond Loans for Eligible Purposes.
    (b) The Guarantee Application comprises a Capital Distribution Plan 
and at least one Secondary Capital Distribution Plan, as well as all 
other requirements set forth in this NOGA or as may be required by the 
Guarantor and the CDFI Fund in their sole discretion, for the 
evaluation and selection of Guarantee applicants.
    2. Guarantee Application evaluation, general. The Guarantee 
Application review and evaluation process will be based on established 
standard procedures, which may include interviews of applicants and/or 
site visits to applicants conducted by the CDFI Fund. Through the 
Application review process, the CDFI Fund will evaluate Guarantee 
applicants on a merit basis and in a fair and consistent manner. Each 
Guarantee applicant will be reviewed on its ability to successfully 
implement and carry out the activities proposed in its Guarantee 
Application throughout the life of the Bond. Eligible CDFIs must 
currently meet the criteria established in the Regulations to 
participate in the CDFI Bond Guarantee Program. Guarantee Applications 
that are forward-looking or speculate as to the eventual acquisition of 
the required capabilities and criteria by the Eligible CDFI(s) are 
unlikely to be approved. Guarantee Application processing will be 
initiated in chronological order by date of receipt; however, Guarantee 
Applications that are incomplete or require the CDFI Fund to request 
additional or clarifying information may delay the ability of the CDFI 
Fund to deem the Guarantee Application complete and move it to the next 
phase of review. Submitting a substantially incomplete application 
earlier than other applicants does not ensure first approval.
    B. Guarantee Application: eligibility. 1. Eligibility; CDFI 
certification requirements. Each Eligible CDFI must be a Certified CDFI 
as of the date of submission of a Guarantee Application. If approved 
for a Guarantee, each Eligible CDFI must be a Certified CDFI as of the 
Bond Issue Date and must maintain its respective CDFI certification 
throughout the term of the corresponding Bond. For more information on 
CDFI Certification and the certification of affiliated entities, see 
part II of this NOGA.
    2. Qualified Issuer as Eligible CDFI. A Qualified Issuer may not 
participate as an Eligible CDFI within its own Bond Issue, but may 
participate as an Eligible CDFI in a Bond Issue managed by another 
Qualified Issuer.
    3. Attestation by proposed Eligible CDFIs. Each proposed Eligible 
CDFI must attest in the Guarantee Application that it has designated 
the Qualified Issuer to act on its behalf and that the information 
pertaining to the Eligible CDFI in the Guarantee Application is true, 
accurate and complete. Each proposed Eligible CDFI must also attest in 
the Guarantee Application that it will use Bond Loan proceeds for 
Eligible Purposes and that Secondary Loans will be financed or 
refinanced only within the applicable Secondary Loan Requirements.
    C. Guarantee Application: preparation. When preparing the Guarantee 
Application, the Eligible CDFIs and Qualified Issuer must collaborate 
to determine the composition and characteristics of the Bond Issue, 
ensuring compliance with the Act, the Regulations, and this NOGA. The 
Qualified Issuer is responsible for the collection, preparation, 
verification and submission of the Eligible CDFI information that is 
presented in the Guarantee Application. The Qualified Issuer will 
submit the Guarantee Application for the proposed Bond Issue, including 
any information provided by the proposed Eligible CDFIs. In addition, 
the Qualified Issuer will serve as the primary point of contact with 
the CDFI Fund during the Guarantee Application review and evaluation 
process.
    D. Review and approval process.
    1. Substantive review. (a) If the CDFI Fund determines that the 
Guarantee Application is complete and eligible, the CDFI Fund will 
undertake a substantive review in accordance with the criteria and 
procedures described in the Regulations at 12 CFR 1808.501, this NOGA, 
and the Guarantee Application. The substantive review of the Guarantee 
Application will include due diligence, underwriting, credit risk 
review, and Federal credit subsidy calculation in order to determine 
the feasibility and risk of the proposed Bond Issue, as well as the 
strength and capacity of the Qualified Issuer and each proposed 
Eligible CDFI. Each proposed Eligible CDFI will be evaluated 
independently of the other proposed Eligible CDFIs within the proposed 
Bond Issue.
    (b) As part of the substantive review process, the CDFI Fund may 
contact the Qualified Issuer (as well as the proposed Eligible CDFIs 
included in the Guarantee Application) by telephone, email, mail, or 
through an on-site visit for the sole purpose of obtaining additional, 
clarifying, confirming, or supplemental application information. The 
CDFI Fund reserves the right to collect such additional, clarifying, 
confirming or supplemental information as it deems appropriate. If 
contacted for additional, clarifying, confirming, or supplemental 
information, said entities must respond within the time parameters set 
by the CDFI Fund or the Guarantee Application will be rejected.
    2. Guarantee Application criteria. (a) In general, a Guarantee 
Application will be evaluated based on the strength and feasibility of 
the proposed Bond Issue, as well as the creditworthiness and 
performance of the Qualified Issuer and the proposed Eligible CDFIs. 
Guarantee Applications must demonstrate that each proposed Eligible 
CDFI has the capacity for its respective Bond Loan to be a general 
recourse obligation of the proposed Eligible CDFI and to deploy the 
Bond Loan proceeds within the required disbursement timeframe as 
described in the Regulations. Unless receiving significant third-party 
support, support from a Controlling CDFI, or Credit Enhancements, 
Eligible CDFIs should not request Bond Loans

[[Page 19410]]

greater than their current total asset size or which would otherwise 
significantly impair their net asset or net equity position. Further, 
while an entity with a limited operating history or a history of 
operating losses is unlikely to meet the strength and feasibility 
requirements of the CDFI Bond Guarantee Program, it may receive 
significant third-party support, support from a Controlling CDFI, or 
Credit Enhancements.
    (b) The Capital Distribution Plan must demonstrate the Qualified 
Issuer's comprehensive plan for lending, disbursing, servicing and 
monitoring each Bond Loan in the Bond Issue. It includes, among other 
information, the following components:
    (i) Statement of Proposed Sources and Uses of Funds: Pursuant to 
the requirements set forth in the Regulations at 12 CFR1808.102(bb) and 
1808.301, the Qualified Issuer must provide: (A) A description of the 
overall plan for the Bond Issue; (B) a description of the proposed uses 
of Bond Proceeds and proposed sources of funds to repay principal and 
interest on the proposed Bond and Bond Loans; (C) a certification that 
100 percent of the principal amounts of the proposed Bond will be used 
to make Bond Loans for Eligible Purposes on the Bond Issue Date; and 
(D) description of the extent to which the proposed Bond Loans will 
serve Low-Income Areas or Underserved Rural Areas;
    (ii) Bond Issue Qualified Issuer cash flow model: The Qualified 
Issuer must provide a cash flow model displaying the orderly repayment 
of the Bond and the Bond Loans according to their respective terms. The 
cash flow model shall include disbursement and repayment of Bonds, Bond 
Loans, and Secondary Loans. The cash flow model shall match the 
aggregated cash flows from the Secondary Capital Distribution Plans of 
each of the underlying Eligible CDFIs in the Bond Issue pool;
    (iii) Organizational capacity: If not submitted concurrently, the 
Qualified Issuer must attest that no material changes have occurred 
since the time that it submitted the Qualified Issuer Application;
    (iv) Credit Enhancement (if applicable): The Qualified Issuer must 
provide information about the adequacy of proposed risk mitigation 
provisions designed to protect the financial interests of the Federal 
Government, either directly or indirectly through supporting the 
financial strength of the Bond Issue. This includes, but is not limited 
to, the amount and quality of any Credit Enhancements, terms and 
specific conditions such as renewal options, and any limiting 
conditions or revocability by the provider of the Credit Enhancement. 
Any Credit Enhancement must be pledged, as part of the Trust Estate, to 
the Master Servicer/Trustee for the benefit of the Federal Financing 
Bank;
    (v) Proposed Term Sheets: For each Eligible CDFI that is part of 
the proposed Bond Issue, the Qualified Issuer must submit a proposed 
Term Sheet using the template provided on the CDFI Fund's Web site. The 
proposed Term Sheet must clearly state all relevant and critical terms 
of the proposed Bond Loan including, but not limited to: Any requested 
prepayment provisions; unique conditions precedent; proposed covenants 
and exact amounts/percentages for determining the Eligible CDFI's 
ability to meet program requirements; and terms and exact language 
describing any Credit Enhancements. Terms may be either altered and/or 
negotiated by the CDFI Fund in its sole discretion, based on the 
proposed structure in the application, to ensure that adequate 
protection is in place for the Guarantor.
    (vi) Secondary Capital Distribution Plan(s): Each proposed Eligible 
CDFI must provide a comprehensive plan for financing, disbursing, 
servicing and monitoring Secondary Loans, demonstrating how each 
proposed Secondary Loan will meet Eligible Purposes, and meeting such 
other requirements that may be required by the Guarantor and the CDFI 
Fund. For each proposed Eligible CDFI relying, for CDFI certification 
purposes, on the financing entity activity of a Controlling CDFI, the 
Controlling CDFI must describe how the Eligible CDFI and the 
Controlling CDFI, together, will meet the requirements listed below:
    (A) Narrative and Statement of Proposed Sources and Uses of Funds: 
Each Eligible CDFI will: (1) Provide a description of proposed uses of 
funds, including the extent to which Bond Loans will serve Low-Income 
Areas or Underserved Rural Areas, and the extent to which Bond Loan 
proceeds will be used (i) to make the first monthly installment of a 
Bond Loan payment, (ii) pay Issuance Fees up to one percent of the Bond 
Loan, and (iii) finance Loan Loss Reserves related to Secondary Loans; 
(2) attest that 100 percent of Bond Loan proceeds designated for 
Secondary Loans will be used to finance or refinance Secondary Loans 
that meet Secondary Loan Requirements; (3) describe a plan for 
financing, disbursing, servicing, and monitoring Secondary Loans; (4) 
indicate the expected asset classes to which it will lend under the 
Secondary Loan Requirements; (5) indicate examples of previous lending 
and years of experience lending to a specific asset class; (6) provide 
a table detailing specific uses and timing of disbursements, including 
terms and relending plans if applicable; and (7) a community impact 
analysis, including how the proposed Secondary Loans will address 
financing needs that the private market is not adequately serving and 
specific community benefit metrics;
    (B) Eligible CDFI cash flow model: Each Eligible CDFI must provide 
a cash flow model of the proposed Bond Loan which: (1) Matches each 
Eligible CDFI's portion of the Qualified Issuer's cash flow model; and 
(2) tracks the flow of funds through the term of the Bond Issue and 
demonstrates disbursement and repayment of the Bond Loan, Secondary 
Loans, and any utilization of the Relending Fund, if applicable;
    (C) Organizational capacity: Each Eligible CDFI must provide 
documentation indicating the ability of the Eligible CDFI to manage its 
Bond Loan including, but not limited to: (1) Organizational ownership 
and chart of affiliates; (2) organizational documents, including 
policies and procedures related to loan underwriting and asset 
management; (3) management or operating agreement, if applicable; (4) 
an analysis by management of its ability to manage the funding, 
monitoring, and collection of loans being contemplated with the 
proceeds of the Bond Loan; (5) information about its board of 
directors; (6) a governance narrative; (7) description of senior 
management and employee base; (8) independent reports, if available; 
(9) strategic plan or related progress reports; and (10) a discussion 
of the management and information systems used by the Eligible CDFI;
    (D) Policies and procedures: Each Eligible CDFI must provide 
policies and procedures for the matching of assets and liabilities, as 
well as loan policies and procedures: A copy of the asset-liability 
matching policy, if applicable; and loan policies which address topics 
including, but not limited to: (1) Origination, underwriting, credit 
approval, interest rates, closing, documentation, asset management, and 
portfolio monitoring and (2) risk-rating definitions, charge-offs, and 
loan loss reserve methodology;
    (E) Financial statements: Each Eligible CDFI must provide 
information about the Eligible CDFI's current and future financial 
position, including but not limited to: (1) Most recent three years of 
audited financial statements; (2) current year-to-date or interim 
financial statement; (3) a copy of the current year's approved budget; 
and (4) a three year operating projection;

[[Page 19411]]

    (F) Loan portfolio information: Each Eligible CDFI must provide 
information such as: (1) Loan portfolio quality report; (2) pipeline 
report; (3) portfolio listing; (4) a description of other loan assets 
under management; (5) loan products; (6) independent loan review 
report; (7) impact report case studies; and (8) a loan portfolio by 
risk rating and loan loss reserves; and
    (G) Funding sources and financial activity information: Each 
Eligible CDFI must provide information including, but not limited to: 
(1) Current grant information; (2) funding projections; (3) credit 
enhancements; (4) historical investor renewal rates; (5) covenant 
compliance; (6) off-balance sheet contingencies; (7) earned revenues; 
and (8) debt capital statistics.
    (vii) Assurances and certifications that not less than 100 percent 
of the principal amount of Bonds will be used to make Bond Loans for 
Eligible Purposes beginning on the Bond Issue Date, and that Secondary 
Loans shall be made as set forth in subsection 1808.307(b); and
    (viii) Such other information that the Guarantor, the CDFI Fund 
and/or the Bond Purchaser may deem necessary and appropriate.
    (c) The CDFI Fund will use the information described in the Capital 
Distribution Plan and Secondary Capital Distribution Plan(s) to 
evaluate the feasibility of the proposed Bond Issue, with specific 
attention paid to each Eligible CDFI's financial strength and 
organizational capacity. For each proposed Eligible CDFI relying, for 
CDFI certification purposes, on the financing entity activity of a 
Controlling CDFI, the CDFI Fund will pay specific attention to the 
Controlling CDFI's financial strength and organizational capacity and 
the operating agreement between the proposed Eligible CDFI and the 
Controlling CDFI. All materials provided in the Guarantee Application 
will be used to evaluate the proposed Bond Issue. In total, there are 
more than 100 individual criteria or sub-criteria used to evaluate each 
Eligible CDFI. Specific criteria used to evaluate each Eligible CDFI 
shall include, but not be limited to the following criteria below. For 
each proposed Eligible CDFI relying, for CDFI certification purposes, 
on the financing entity activity of a Controlling CDFI, the following 
specific criteria will also be used to evaluate both the proposed 
Eligible CDFI and the Controlling CDFI:
    (i) Historical financial ratios: Ratios which together have been 
shown to be predictive of possible future default will be used as an 
initial screening tool, including total asset size, net asset or Tier 1 
Core Capital ratio, self-sufficiency ratio, non-performing asset ratio, 
liquidity ratio, reserve over nonperforming assets, and yield cost 
spread;
    (ii) Quantitative and qualitative attributes under the ``CAMEL'' 
framework: After initial screening, the CDFI Fund will utilize a more 
detailed analysis under the ``CAMEL'' framework, including but not 
limited to:
    (A) Capital Adequacy: Attributes such as the debt-to-equity ratio, 
status and significance of off-balance sheet liabilities or 
contingencies, magnitude and consistency of cash flow performance, 
exposure to affiliates for financial and operating support, trends in 
changes to capitalization, and other relevant attributes;
    (B) Asset Quality: Attributes such as the charge-off ratio, 
adequacy of loan loss reserves, sector concentration, borrower 
concentration, asset composition, security and collateralization of the 
loan portfolio, trends in changes to asset quality, and other relevant 
attributes;
    (C) Management: Attributes such as documented best practices in 
governance, strategic planning and board involvement, robust policies 
and procedures, tenured and experienced management team, organizational 
stability, infrastructure and information technology systems, and other 
relevant attributes;
    (D) Earnings and Performance: Attributes such as net operating 
margins, deployment of funds, self-sufficiency, trends in earnings, and 
other relevant attributes;
    (E) Liquidity: Attributes such as unrestricted cash and cash 
equivalents, ability to access credit facilities, access to grant 
funding, covenant compliance, affiliate relationships, concentration of 
funding sources, trends in liquidity, and other relevant attributes;
    (iii) Forecast performance and other relevant criteria: The CDFI 
Fund will stress test each Eligible CDFI's forecasted performance under 
scenarios that are specific to the unique circumstance and attributes 
of the organization. Additionally, the CDFI Fund will consider other 
relevant criteria that have not been adequately captured in the 
preceding steps as part of the due diligence process. Such criteria may 
include, but not be limited to, the size and quality of any third-party 
Credit Enhancements or other forms of support.
    (A) Overcollateralization: The commitment by an Eligible CDFI to 
over-collateralize a proposed Bond Loan with excess Secondary Loans is 
a criterion that may affect the viability of a Guarantee Application by 
decreasing the estimated net present value of the long-term cost of the 
Guarantee to the Federal Government, by decreasing the probability of 
default, and/or increasing the recovery rate in the event of default. 
An Eligible CDFI committing to overcollateralization may not be 
required to deposit funds in the Relending Account, subject to the 
maintenance of certain unique requirements that are detailed in the 
template Agreement to Guarantee and Bond Loan Agreement.
    (B) Credit Enhancements: The provision of third-party Credit 
Enhancements, including any Credit Enhancement from a Controlling CDFI 
or any other affiliated entity, is a criterion that may affect the 
viability of a Guarantee Application by decreasing the estimated net 
present value of the long-term cost of the Guarantee to the Federal 
Government. Credit Enhancements are considered in the context of the 
structure and circumstances of each Guarantee Application.
    (C) On-Site Review: The CDFI Fund may request an on-site review of 
an Eligible CDFI to confirm materials provided in the written 
application, as well as to gather additional due diligence information. 
The on-site reviews are a critical component of the application review 
process and will generally be conducted for all applicants not 
regulated by an Appropriate Federal Banking Agency or Appropriate State 
Agency. The CDFI Fund reserves the right to conduct a site visit of 
regulated entities, in its sole discretion.
    (D) Secondary Loan Asset Classes: Eligible CDFIs that propose to 
use funds for new products or lines of business must demonstrate that 
they have the organizational capacity to manage such activities in a 
prudent manner. Failure to demonstrate such organizational capacity may 
be factored into the consideration of Asset Quality or Management 
criteria as listed above in this section.
    3. Credit subsidy cost. The credit subsidy cost is the net present 
value of the estimated long-term cost of the Guarantee to the Federal 
Government as determined under the applicable provisions of the Federal 
Credit Reform Act of 1990, as amended (FCRA). Treasury has not received 
appropriated amounts from Congress to cover the credit subsidy costs 
associated with the Guarantees issued pursuant to this NOGA. In 
accordance with FCRA, Treasury must consult with, and obtain the 
approval of, OMB for Treasury's calculation of the credit subsidy cost 
of

[[Page 19412]]

each Guarantee prior to entering into any Agreement to Guarantee.
    E. Guarantee approval; Execution of documents. 1. The Guarantor, in 
the Guarantor's sole discretion, may approve a Guarantee, after 
consideration of the recommendation from the CDFI Bond Guarantee 
Program's Credit Review Board and/or based on the merits of the 
Guarantee Application. The Guarantor shall approve or deny a Guarantee 
Application no later than 90 days after the date the Guarantee 
Application was advanced for substantive review.
    2. The Guarantor reserves the right to approve Guarantees, in whole 
or in part, in response to any, all, or none of the Guarantee 
Applications submitted in response to this NOGA. The Guarantor also 
reserves the right to approve any Guarantees in an amount that is less 
than requested in the corresponding Guarantee Application. Pursuant to 
the Regulations at 12 CFR 1808.504(c), the Guarantor may limit the 
number of Guarantees made per year to ensure that a sufficient 
examination of Guarantee Applications is conducted.
    3. The CDFI Fund will notify the Qualified Issuer in writing of the 
Guarantor's approval or disapproval of a Guarantee Application. If 
approved for a Guarantee, the Qualified Issuer will enter into an 
Agreement to Guarantee, which will include a term sheet that will be 
signed by each Eligible CDFI.
    4. Following the execution and delivery of the Agreement to 
Guarantee (and the respective term sheets), the parties will proceed to 
the Bond Issue Date, when the parties will sign and enter into the 
remaining Bond Documents and Bond Loan documents.
    5. Please note that the most recently dated templates of Bond 
Documents and Bond Loan documents that are posted on the CDFI Fund's 
Web site will not be substantially revised or negotiated prior to 
closing of the Bond and Bond Loan and issuance of the corresponding 
Guarantee. If a Qualified Issuer or a proposed Eligible CDFI does not 
understand the terms and conditions of the Bond Documents or Bond Loan 
documents (including those that listed in Section II.G., above), it 
should feel free to ask questions or seek technical assistance from the 
CDFI Fund. However, if a Qualified Issuer or a proposed Eligible CDFI 
disagrees or is uncomfortable with any term/condition, or if legal 
counsel to either cannot provide a legal opinion in substantially the 
same form and content of the required legal opinion, it should not 
apply for a Guarantee.
    6. The Guarantee shall not be effective until the Guarantor signs 
and delivers the Guarantee.
    F. Guarantee denial. The Guarantor, in the Guarantor's sole 
discretion, may deny a Guarantee, after consideration of the 
recommendation from the Credit Review Board and/or based on the merits 
of the Guarantee Application. In addition, the Guarantor reserves the 
right to deny a Guarantee Application if information (including any 
administrative error) comes to the Guarantor's attention that adversely 
affects the Qualified Issuer's eligibility, adversely affects the 
evaluation or scoring of an Application, or indicates fraud or 
mismanagement on the part of the Qualified Issuer, Program 
Administrator, Servicer, and/or Eligible CDFIs. Further, if the 
Guarantor determines that any portion of the Guarantee Application is 
incorrect in any material respect, the Guarantor reserves the right, in 
the Guarantor's sole discretion, to deny the Application.

V. Guarantee Administration

    A. Pricing information. Bond Loans will be priced based upon the 
underlying Bond issued by the Qualified Issuer and purchased by the 
Federal Financing Bank (FFB or Bond Purchaser). The FFB will set the 
liquidity premium at the time of the Bond Issue Date, based on the 
duration and maturity of the Bonds according to the FFB's lending 
policies (www.treasury.gov/ffb). Liquidity premiums will be charged in 
increments of \1/8\th of a percent (i.e., 12.5 basis points).
    B. Fees and other payments. The following table includes some of 
the fees that may be applicable to Qualified Issuers and Eligible CDFIs 
after approval of a Guarantee of a Bond Issue, as well as Risk-Share 
Pool funding, prepayment penalties or discounts, and Credit 
Enhancements. The table is not exhaustive; additional fees payable to 
the CDFI Fund or other parties may apply.

 
------------------------------------------------------------------------
                Fee                              Description
------------------------------------------------------------------------
Agency Administrative Fee.........  Payable annually to the CDFI Fund by
                                     the Qualified Issuer. Equal to 10
                                     basis points on the amount of the
                                     unpaid principal of the Bond Issue.
Bond Issuance Fees................  Amounts paid by an Eligible CDFI for
                                     reasonable and appropriate
                                     expenses, administrative costs, and
                                     fees for services in connection
                                     with the issuance of the Bond (but
                                     not including the Agency
                                     Administrative Fee) and the making
                                     of the Bond Loan. Bond Issuance
                                     Fees negotiated between the
                                     Qualified Issuer and the Eligible
                                     CDFI. Up of 1% of Bond Loan
                                     Proceeds may be used to finance the
                                     Bond Issuance Fee.
Servicer fee......................  The fees paid by the Eligible CDFI
                                     to the Qualified Issuer's Servicer.
                                     Servicer fees negotiated between
                                     the Qualified Issuer and the
                                     Eligible CDFI.
Program Administrator fee.........  The fees paid by the Eligible CDFI
                                     to the Qualified Issuer's Program
                                     Administrator. Program
                                     Administrator fees negotiated
                                     between the Qualified Issuer and
                                     the Eligible CDFI.
Master Servicer/Trustee fee.......  The fees paid by the Qualified
                                     Issuer and the Eligible CDFI to the
                                     Master Servicer/Trustee to carry
                                     out the responsibilities of the
                                     Bond Trust Indenture. In general,
                                     the Master Servicer/Trustee fee is
                                     the greater of 16 basis points per
                                     annum or $10,000 per month once the
                                     Bond Loans are fully disbursed. Any
                                     special servicing costs and
                                     resolution or liquidation fees due
                                     to a Bond Loan default are the
                                     responsibility of the Eligible
                                     CDFI. Please see the template legal
                                     documents at www.cdfifund.gov/bond
                                     for more specific information.
Risk-Share Pool funding...........  The funds paid by the Eligible CDFIs
                                     to cover Risk-Share Pool
                                     requirements; capitalized by pro
                                     rata payments equal to 3% of the
                                     amount disbursed on the Bond from
                                     all Eligible CDFIs within the Bond
                                     Issue.
Prepayment penalties or discounts.  Prepayment penalties or discounts
                                     may be determined by the FFB at the
                                     time of prepayment.
Credit Enhancements...............  Pledges made to enhance the quality
                                     of a Bond and/or Bond Loan. Credit
                                     Enhancements include, but are not
                                     limited to, the Principal Loss
                                     Collateral Provision and letters of
                                     credit. Credit Enhancements must be
                                     pledged, as part of the Trust
                                     Estate, to the Master Servicer/
                                     Trustee for the benefit of the
                                     Federal Financing Bank.
------------------------------------------------------------------------


[[Page 19413]]

    C. Annual assessment. In accordance with 12 CFR 1808.302(f), each 
year, beginning on the one year anniversary of the Bond Issue Date (and 
every year thereafter for the term of the Bond Issue), each Qualified 
Issuer must demonstrate that not less than 100 percent of the principal 
amount of the Guaranteed Bonds currently disbursed and outstanding has 
been used to make loans to Eligible CDFIs for Eligible Purposes. If a 
Qualified Issuer fails to demonstrate this requirement within the 90 
days after the anniversary of the Bond Issue Date, the Qualified Issuer 
must repay on that portion of Bonds necessary to bring the Bonds that 
remain outstanding after such repayment is in compliance with the 100 
percent requirement above.
    D. Secondary Loan Requirements. In accordance with the Regulations, 
Eligible CDFIs must finance or refinance Secondary Loans for Eligible 
Purposes (not including loan loss reserves) that align with Secondary 
Loan Requirements. The Secondary Loan Requirements are found on the 
CDFI Fund's Web site at www.cdfifund.gov. Applicants should become 
familiar with the published Secondary Loan Requirements. Secondary Loan 
Requirements are classified by asset class and are subject to a 
Secondary Loan commitment process managed by the Qualified Issuer.
    Eligible CDFIs must execute Secondary Loans documents (in the form 
of loan agreements and promissory notes) with Secondary Borrowers as 
follows: (i) Not later than twelve (12) months after the Bond Issue 
Date, Secondary Loan documents representing at least fifty percent 
(50%) of the Bond Loan proceeds allocated for Secondary Loans, and (ii) 
not later than twenty-four (24) months after the Bond Issue Date, 
Secondary Loan documents representing one hundred percent (100%) of the 
Bond Loan proceeds allocated for Secondary Loans. In the event that the 
Eligible CDFI does not comply with the foregoing requirements of 
clauses (i) and (ii) of this paragraph, the available Bond Loan 
proceeds at the end of the applicable period shall be reduced by an 
amount equal to the difference between the amount required by clauses 
(i) and (ii) minus the amount previously committed to the Secondary 
Loans in the applicable period. Secondary Loans shall carry loan 
maturities suitable to the loan purpose and consistent with loan-to-
value requirements set forth in the Secondary Loan Requirements. 
Secondary Loan maturities shall not exceed the corresponding Bond or 
Bond Loan maturity date. It is the expectation of the CDFI Fund that 
such interest rates will be reasonable based on the borrower and loan 
characteristics.
    E. Secondary Loan collateral requirements. 1. The Regulations state 
that Secondary Loans must be secured by a first lien of the Eligible 
CDFI on pledged collateral, in accordance with the Regulations (at 12 
CFR 1808.307(f)) and within certain parameters. Examples of acceptable 
forms of collateral may include, but are not limited to: Real property 
(including land and structures); machinery, equipment and movables; 
cash and cash equivalents; accounts receivable; letters of credit; 
inventory; fixtures; contracted revenue streams from non-Federal 
counterparties, provided the Secondary Borrower pledges all assets, 
rights and interests necessary to generate such revenue stream; and a 
Principal Loss Collateral Provision. Intangible assets, such as 
customer relationships, intellectual property rights, and to-be-
constructed real estate improvements, are not acceptable forms of 
collateral.
    2. The Regulations require that Bond Loans must be secured by a 
first lien on a collateral assignment of Secondary Loans, and further 
that the Secondary Loans must be secured by a first lien or parity lien 
on acceptable collateral.
    3. Valuation of the collateral pledged by the Secondary Borrower 
must be based on the Eligible CDFI's credit policy guidelines and must 
conform to the standards set forth in the Uniform Standards of 
Professional Appraisal Practice (USPAP).
    4. Independent third-party appraisals are required for the 
following collateral: Real estate; fixtures, machinery and equipment, 
and movables stock valued in excess of $250,000; contracted revenue 
stream from non-Federal creditworthy counterparties. Secondary Loan 
collateral shall be valued using the cost approach, net of depreciation 
and shall be required for the following: Accounts receivable; 
machinery, equipment and movables; and fixtures.
    F. Qualified Issuer approval of Bond Loans to Eligible CDFIs. The 
Qualified Issuer shall not approve any Bond Loans to an Eligible CDFI 
where the Qualified Issuer has actual knowledge, based upon reasonable 
inquiry, that within the past five (5) years the Eligible CDFI: (i) Has 
been delinquent on any payment obligation (except upon a demonstration 
by the Qualified Issuer satisfactory to the CDFI Fund that the 
delinquency does not affect the Eligible CDFI's creditworthiness), or 
has defaulted and failed to cure any other obligation, on a loan or 
loan agreement previously made under the Act; (ii) has been found by 
the Qualified Issuer to be in default of any repayment obligation under 
any Federal program; (iii) is financially insolvent in either the legal 
or equitable sense; or (iv) is not able to demonstrate that it has the 
capacity to comply fully with the payment schedule established by the 
Qualified Issuer.
    G. Credit Enhancements; Principal Loss Collateral Provision. 1. In 
order to achieve the statutory zero-credit subsidy constraint of the 
CDFI Bond Guarantee Program and to avoid a call on the Guarantee, 
Eligible CDFIs are encouraged to include Credit Enhancements and 
Principal Loss Collateral Provisions structured to protect the 
financial interests of the Federal Government. Any Credit Enhancement 
or Principal Loss Collateral Provision must be pledged, as part of the 
Trust Estate, to the Master Servicer/Trustee for the benefit of the 
Federal Financing Bank.
    2. Credit Enhancements may include, but are not limited to, payment 
guarantees from third parties or Affiliate(s), non-Federal capital, 
lines or letters of credit, or other pledges of financial resources 
that enhance the Eligible CDFI's ability to make timely interest and 
principal payments under the Bond Loan.
    3. As distinct from Credit Enhancements, Principal Loss Collateral 
Provisions may be provided in lieu of pledged collateral and in 
addition to pledged collateral. A Principal Loss Collateral Provision 
shall be in the form of cash or cash equivalent guarantees from non-
Federal capital in amounts necessary to secure the Eligible CDFI's 
obligations under the Bond Loan after exercising other remedies for 
default. For example, a Principal Loss Collateral Provision may include 
a deficiency guarantee whereby another entity assumes liability after 
other default remedies have been exercised, and covers the deficiency 
incurred by the creditor. The Principal Loss Collateral Provision 
shall, at a minimum, provide for the provision of cash or cash 
equivalents in an amount that is not less than the difference between 
the value of the collateral and the amount of the accelerated Bond Loan 
outstanding.
    4. In all cases, acceptable Credit Enhancements or Principal Loss 
Collateral Provisions shall be proffered by creditworthy providers and 
shall provide information about the adequacy of the facility in 
protecting the financial interests of the Federal Government, either 
directly or indirectly through supporting the financial strength of the 
Bond Issue. This includes, but is not limited to, the amount and 
quality of any Credit Enhancements, the financial strength of the 
provider of the Credit

[[Page 19414]]

Enhancement, the terms, specific conditions such as renewal options, 
and any limiting conditions or revocability by the provider of the 
Credit Enhancement.
    5. For Secondary Loans benefitting from a Principal Loss Collateral 
Provision (e.g., a deficiency guarantee), the entity providing the 
Principal Loss Collateral Provision must be underwritten based on the 
same criteria as if the Secondary Loan were being made directly to that 
entity with the exception that the guarantee need not be 
collateralized.
    6. If the Principal Loss Collateral Provision is provided by a 
financial institution that is regulated by an Appropriate Federal 
Banking Agency or an Appropriate State Agency, the guaranteeing 
institution must demonstrate performance of financially sound business 
practices relative to the industry norm for providers of collateral 
enhancements as evidenced by reports of Appropriate Federal Banking 
Agencies, Appropriate State Agencies, and auditors, as appropriate.
    H. Reporting requirements. 1. Reports. (a) General. As required 
pursuant to the Regulations at 12 CFR 1808.619, and as set forth in the 
Bond Documents and the Bond Loan documents, the CDFI Fund will collect 
information from each Qualified Issuer which may include, but will not 
be limited to: (i) Quarterly and annual financial reports and data 
(including an OMB single audit, as applicable) for the purpose of 
monitoring the financial health, ratios and covenants of Eligible CDFIs 
that include asset quality (non-performing assets, loan loss reserves, 
and net charge-off ratios), liquidity (current ratio, working capital, 
and operating liquidity ratio), solvency (capital ratio, self-
sufficiency, fixed charge, leverage, and debt service coverage ratios); 
(ii) annual reports as to the compliance of the Qualified Issuer and 
Eligible CDFIs with the Regulations and specific requirements of the 
Bond Documents and Bond Loan documents; (iii) monthly reports on uses 
of Bond Loan proceeds and Secondary Loan proceeds; (iv) Master Service/
Trustee summary of program accounts and transactions for each Bond 
Issue; (v) Secondary Loan certifications describing Eligible CDFI 
lending, collateral valuation, and eligibility; (vi) financial data on 
Secondary Loans to monitor underlying collateral, gauge overall risk 
exposure across asset classes, and assess loan performance, quality, 
and payment history; (vii) annual certifications of compliance with 
program requirements; (viii) material event disclosures including any 
reports of Eligible CDFI management and/or organizational changes; (ix) 
annual updates to the Capital Distribution Plan (as described below); 
(x) supplements and/or clarifications to correct reporting errors (as 
applicable); (xi) project level reports to understand overall program 
impact and the manner in which Bond Proceeds are deployed for Eligible 
Community or Economic Development Purposes; and (xii) such other 
information that the CDFI Fund and/or the Bond Purchaser may require, 
including but not limited to racial and ethnic data showing the extent 
to which members of minority groups are beneficiaries of the CDFI Bond 
Guarantee Program, to extent permissible by law.
    (b) Additional reporting by Qualified Issuers. A Qualified Issuer 
receiving a Guarantee shall submit annual updates to the approved 
Capital Distribution Plan, including an updated Proposed Sources and 
Uses of Funds for each Eligible CDFI, noting any deviation from the 
original baseline with regards to both timing and allocation of funding 
among Secondary Loan asset classes. The Qualified Issuer shall also 
submit a narrative, no more than five (5) pages in length for each 
Eligible CDFI, describing the Eligible CDFI's capacity to manage its 
Bond Loan. The narrative shall address any Notification of Material 
Events and relevant information concerning the Eligible CDFI's 
management information systems, personnel, executive leadership or 
board members, as well as financial capacity. The narrative shall also 
describe how such changes affect the Eligible CDFI's ability to 
generate impacts in Low-Income or Underserved Rural Areas.
    (c) Change of Secondary Loan asset classes. Any Eligible CDFI 
seeking to expand the allowable Secondary Loan asset classes beyond 
what was approved by the CDFI Bond Guarantee Program's Credit Review 
Board or make other deviations that could potentially result in a 
modification, as that term is defined in OMB Circulars A-11 and A-129, 
must receive approval from the CDFI Fund before the Eligible CDFI can 
begin to enact the proposed changes. The CDFI Fund will consider 
whether the Eligible CDFI possesses or has acquired the appropriate 
systems, personnel, leadership, and financial capacity to implement the 
revised Capital Distribution Plan. The CDFI Fund will also consider 
whether these changes assist the Eligible CDFI in generating impacts in 
Low-Income or Underserved Rural Areas. Such changes will be reviewed by 
the CDFI Bond Guarantee Program and presented to the Credit Review 
Board for approval, and appropriate consultation will be made with OMB 
to ensure compliance with OMB Circulars A-11 and A-129, prior to 
notifying the Eligible CDFI if such changes are acceptable under the 
terms of the Bond Loan Agreement. An Eligible CDFI may request such an 
update to its Capital Distribution Plan prior to Bond Issue Closing, 
and thereafter may only request such an update once per the CDFI's 
fiscal year.
    (d) Reporting by Affiliates and Controlling CDFIs. In the case of 
an Eligible CDFI relying, for CDFI certification purposes, on the 
financing entity activity of a Controlling CDFI, the CDFI Fund will 
require that the Affiliate and Controlling CDFI provide certain joint 
reports, including but not limited to those listed in subparagraph 2(a) 
above.
    (e) Detailed information on specific reporting requirements and the 
format, frequency, and methods by which this information will be 
transmitted to the CDFI Fund will be provided to Qualified Issuers, 
Program Administrators, Servicers, and Eligible CDFIs through the Bond 
Loan Agreement, correspondence, and webinar trainings, and/or scheduled 
outreach sessions.
    (f) Reporting requirements will be enforced through the Agreement 
to Guarantee and the Bond Loan Agreement, and will be assigned a valid 
OMB control number pursuant to the Paperwork Reduction Act, as 
applicable.
    (g) Each Qualified Issuer will be responsible for the timely and 
complete submission of the annual reporting documents, including such 
information that must be provided by other entities such as Eligible 
CDFIs or Secondary Borrowers. If such other entities are required to 
provide annual report information or documentation, or other 
documentation that the CDFI Fund may require, the Qualified Issuer will 
be responsible for ensuring that the information is submitted timely 
and complete. Notwithstanding the foregoing, the CDFI Fund reserves the 
right to contact such entities and require that additional information 
and documentation be provided directly to the CDFI Fund.
    (h) Annual Assessments. Each Qualified Issuer and Eligible CDFI 
will be required to have an independent third-party conduct an Annual 
Assessment of its Bond Loan portfolio. The Annual Assessment is 
intended to support the CDFI Fund's annual monitoring of the Bond Loan 
portfolio and to collect financial health, internal control, investment 
impact measurement methodology information

[[Page 19415]]

related to the Eligible CDFIs. This assessment is consistent with the 
program's requirements for Compliance Management and Monitoring (CMM) 
and Portfolio Management and Loan Monitoring (PMLM), and will be 
required pursuant to the Bond Documents and the Bond Loan documents. 
The assessment will also add to the Department of the Treasury's review 
and impact analysis on the use of Bond Loan proceeds in underserved 
communities and support the CDFI Fund in proactively managing portfolio 
risks and performance. The Annual Assessment form for Eligible CDFIs 
will be available on the CDFI Fund's Web site.
    (i) The CDFI Fund reserves the right, in its sole discretion, to 
modify its reporting requirements if it determines it to be appropriate 
and necessary; however, such reporting requirements will be modified 
only after notice to Qualified Issuers. Additional information about 
reporting requirements pursuant to this NOGA, the Bond Documents and 
the Bond Loan documents will be subject to the Paperwork Reduction Act, 
as applicable.
    2. Accounting. (a) In general, the CDFI Fund will require each 
Qualified Issuer and Eligible CDFI to account for and track the use of 
Bond Proceeds and Bond Loan proceeds. This means that for every dollar 
of Bond Proceeds and received from the Bond Purchaser, the Qualified 
Issuer is required to inform the CDFI Fund of its uses, including Bond 
Loan proceeds. This will require Qualified Issuers and Eligible CDFIs 
to establish separate administrative and accounting controls, subject 
to the applicable OMB Circulars.
    (b) The CDFI Fund will provide guidance to Qualified Issuers 
outlining the format and content of the information that is to be 
provided on an annual basis, outlining and describing how the Bond 
Proceeds and Bond Loan proceeds were used.

VI. Agency Contacts

    A. The CDFI Fund will respond to questions and provide support 
concerning this NOGA, the Qualified Issuer Application and the 
Guarantee Application between the hours of 9:00 a.m. and 5:00 p.m. ET, 
starting with the date of the publication of this NOGA. The final date 
to submit questions is June 5, 2015. Applications and other information 
regarding the CDFI Fund and its programs may be obtained from the CDFI 
Fund's Web site at http://www.cdfifund.gov. The CDFI Fund will post on 
its Web site responses to questions of general applicability regarding 
the CDFI Bond Guarantee Program.
    B. The CDFI Fund's contact information is as follows:

                                          Table 2--Contact Information
----------------------------------------------------------------------------------------------------------------
                                         Telephone number (not toll
            Type of question                        free)                          Email addresses
----------------------------------------------------------------------------------------------------------------
CDFI Bond Guarantee Program............  (202) 653-0421 Option 5...  [email protected].
CDFI Certification.....................  (202) 653-0423............  [email protected].
Compliance Monitoring and Evaluation...  (202) 653-0423............  [email protected].
Information Technology Support.........  (202) 653-0422............  [email protected].
----------------------------------------------------------------------------------------------------------------

    C. Communication with the CDFI Fund. The CDFI Fund will use the 
myCDFIFund Internet interface to communicate with applicants, Qualified 
Issuers, Program Administrators, Servicers, Certified CDFIs and 
Eligible CDFIs, using the contact information maintained in their 
respective myCDFIFund accounts. Therefore, each such entity must 
maintain accurate contact information (including contact person and 
authorized representative, email addresses, fax numbers, phone numbers, 
and office addresses) in its respective myCDFIFund account. For more 
information about myCDFIFund (which includes information about the CDFI 
Fund's Community Investment Impact System), please see the Help 
documents posted at http://www.cdfifund.gov/ciis/accessingciis.pdf.

VII. Information Sessions and Outreach

    The CDFI Fund may conduct webcasts, webinars, or information 
sessions for organizations that are considering applying to, or are 
interested in learning about, the CDFI Bond Guarantee Program. The CDFI 
Fund intends to provide targeted outreach to both Qualified Issuer and 
Eligible CDFI participants to clarify the roles and requirements under 
the CDFI Bond Guarantee Program. For further information, please visit 
the CDFI Fund's Web site at http://www.cdfifund.gov.

    Authority:  Pub. L. 111-240; 12 U.S.C. 4701, et seq.; 12 CFR 
part 1808; 12 CFR part 1805; 12 CFR part 1815.

    Dated: April 7, 2015.
Mary Ann Donovan,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2015-08355 Filed 4-9-15; 8:45 am]
 BILLING CODE 4810-70-P