[Federal Register Volume 85, Number 250 (Wednesday, December 30, 2020)]
[Notices]
[Pages 86648-86650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28757]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Notice of Information Collection and Request for Public Comment

ACTION: Notice and request for public comment.

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SUMMARY: The U.S. Department of the Treasury, as part of a continuing 
effort to reduce paperwork and respondent burden, invites the general 
public and other Federal agencies to take this opportunity to comment 
on proposed and/or continuing information collections, as required by 
the Paperwork Reduction Act (PRA) of 1995. Currently, the Community 
Development Financial Institutions (CDFI) Fund, Department of the 
Treasury, is soliciting comments concerning: The Capital Magnet Fund 
(CMF) Application (Application), and reporting and record retention 
requirements of the CMF Annual Performance Report (CMF Performance 
Report). Both the Application and CMF Performance Report are online 
forms submitted through the CDFI Fund's Award Management Information 
System (AMIS).

DATES: Written comments must be received on or before March 1, 2021 to 
be assured of consideration.

ADDRESSES: Submit your comments via email to Daniel Aiello, Program 
Manager for the Capital Magnet Fund, CDFI Fund at [email protected].

FOR FURTHER INFORMATION CONTACT: Daniel Aiello, CMF Program Manager, 
CDFI Fund, U.S. Department of the Treasury, 1500 Pennsylvania Avenue 
NW, Washington, DC 20220, (202) 653-0421 (not a toll-free number), or 
[email protected]. Other information regarding the CDFI Fund and its 
programs may be obtained on the CDFI Fund website at https://www.cdfifund.gov. Two documents are provided to aid the public in 
providing comments requested by this Notice. The CMF Application 
Template, which presents the questions that will comprise the online 
Application, includes substantive revisions relative to the existing 
Application. The proposed revisions relative to the existing 
Application are highlighted in yellow in the CMF Application Template. 
The CMF Performance Report Data Points presents the information 
proposed to be collected in the online CMF Performance Report. 
Substantive changes being made to the CMF Performance Report are 
highlighted in blue in this document, and a list of proposed deletions 
is also included. Both documents may be obtained from the CMF program 
page of the CDFI Fund website at https://www.cdfifund.gov/cmf.

SUPPLEMENTARY INFORMATION:
    Title: Capital Magnet Fund Application; Capital Magnet Fund 
Performance Report.
    OMB Number: 1559-0036.
    Abstract: The Capital Magnet Fund was established through the 
Housing and Economic Recovery Act of 2008 (Pub. L. 110-289) or HERA, as 
a competitive grant program administered by the CDFI Fund. Through CMF, 
the CDFI Fund provides financial assistance grants to Certified 
Community Development Financial Institutions (CDFIs) and qualified 
Nonprofit Organizations with the development or management of 
Affordable Housing, as defined in 12 CFR part 1807, as one of their 
principal purposes. Capitalized terms not defined in this Notice (other 
than titles) have the meaning set forth in the CMF Interim Rule (12 CFR 
part 1807). CMF awards must be used to attract private financing for 
and increase investment in: (i) The Development, Preservation, 
Rehabilitation, and Purchase of Affordable Housing for primarily 
Extremely Low-, Very Low-, and Low-Income Families; and (ii) Economic 
Development Activities which, in conjunction with Affordable Housing 
Activities will implement a Concerted Strategy to stabilize or 
revitalize a Low-Income Area or an Underserved Rural Area.
    CMF Award Recipients are selected through a competitive process 
involving a careful review of their Application for program funding. 
The Application requires the submission of quantitative data and 
narrative responses for three parts: (1) Business and Leveraging 
Strategy, (2) Community Impact, and (3) Organizational Capacity. The 
Award selection process is defined in the Notice of Funding 
Availability (NOFA) for each funding round.
    CMF Award Recipients enter into Assistance Agreements with the CDFI 
Fund that set forth required terms and conditions of the Award, 
including reporting and data collection requirements. The Assistance 
Agreement requires the submission of an annual CMF Performance Report. 
The information collected in the CMF Performance Report is reviewed to 
ensure the Recipient's compliance with its Performance Goals and 
contractual obligations, as well as the overall performance of the 
program.
    Estimated Number of Respondents: 130 (Application); 250 (CMF 
Performance Report).
    Estimated Annual Time per Respondent: 120 hours (Application); 20 
hours (CMF Performance Report).
    Estimated Annual Burden Hours: 15,600 hours (Application); 5,000 
hours (CMF Performance Report).
    Request for Comments: Comments submitted in response to this Notice 
will be summarized and/or included in the request for Office of 
Management and Budget approval. All comments will become a matter of 
public record and may be published on the CDFI Fund website at https://www.cdfifund.gov.

CMF Application

    The CDFI Fund is seeking input on the content of the proposed 
Application with regard to the following: (a) Is the collection of 
information as proposed necessary for the proper performance of the 
functions of the agency, including whether the information shall have 
practical utility in evaluating Applications; (b) the accuracy of the 
agency's estimate of the burden related to the collection of 
information; (c) ways to enhance the quality, utility and clarity of 
the information to be collected; (d) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
technology; and (e) estimates of

[[Page 86649]]

capital or start-up costs and costs of operation, maintenance and 
purchase of services required to provide information.
    Additionally, the CDFI Fund specifically requests comments 
concerning the following questions related to the proposed Application 
(set forth in the CMF Application Template):
    (a) Impact: The proposed Application includes questions about the 
intended impact of an Applicant's CMF strategy. (1) How should the CDFI 
Fund assess the impact of CMF Awards on Low-Income Families and 
communities? (2) The CDFI Fund has identified for Applicants a set of 
impacts in the proposed Application from which to choose. Are the 
current impact choices sufficiently comprehensive? Are there impacts 
that should be added or modified? (3) The CDFI Fund is proposing a 
standard set of metrics for each impact in the Application. Are the 
metrics proposed in the Application reasonable? Should any be added or 
removed?
    (b) Entity Types: Financing entities (including CDFIs) and 
affordable housing developers/managers participate in the CMF program. 
These two entity types generally have different business models and may 
have different approaches to using the CMF Award. (1) Are additional 
questions or revisions to existing questions needed in the Application 
to further differentiate the two entity types? If so, please describe 
and justify. (2) Both the existing and proposed Application currently 
asks non-CDFI Applicants to self-identify as financing entities or 
affordable housing developers/managers; all CDFIs are classified as 
financing entities. Should a CDFI be permitted to self-identify as an 
affordable housing developer/manager if the CDFI intends to primarily 
act in a developer role when executing its CMF Award strategy?
    (c) Areas of Economic Distress and High Opportunity Areas: Along 
with focusing on Areas of Economic Distress, the CMF authorizing 
statute enables the program to prioritize ``projects that target 
Extremely Low-, Very Low-, and Low-Income Families in or outside a 
designated economic distress area.'' To this end, the CDFI Fund is 
proposing to implement this statutory language by adding High 
Opportunity Areas, as defined by the Federal Housing Finance Agency 
(FHFA), as a priority alongside Areas of Economic Distress. High 
Opportunity Areas are priorities in the FHFA's Duty to Serve Rule, and 
generally encompass areas outside of existing CMF Areas of Economic 
Distress, including areas with lower poverty rates, and is seeking 
public comment on the following questions: (1) Should the CDFI Fund add 
High Opportunity Areas as a priority in the Application? (2) If added, 
should High Opportunity Areas be weighted the same or differently as 
Areas of Economic Distress in the evaluation of Applications? (3) 
Should the CDFI Fund rely on the criteria established by the FHFA in 
the Duty to Serve Rule to designate such areas? Under the FHFA 
definition, a High Opportunity Area must (i) be designated by HUD as a 
Difficult to Develop Area whose poverty rate is lower than the rate 
specified by FHFA in the most recently published Duty to Serve 
Evaluation Guidance; or (ii) be designated by a state Qualified 
Allocation Plan as a high opportunity area and approved by FHFA in its 
most recently published Duty to Serve Evaluation Guidance. (4) Should 
the CDFI Fund consider an alternative, nationally applicable definition 
of High Opportunity Areas instead of the FHFA definition? If so, what 
federal sources of data are available to define these areas at the 
census tract level?
    (d) Areas of Economic Distress Data Sets: Currently, the CMF 
program publishes a distinct data set for Areas of Economic Distress 
for each round, in part to allow for annual changes to CDFI Fund areas 
of emphasis and to reflect changing market conditions. This approach is 
different from other CDFI Fund programs, which update their program 
data every five years and apply these changes to all program 
requirements and Recipients. Should the CDFI Fund continue to provide a 
specific data set of the CMF Areas of Economic Distress for each round? 
Or, should another approach be used to maintain and update the Areas of 
Economic Distress data?
    (e) Rental and Homeownership Housing: Affordable rental housing and 
affordable Homeownership are eligible uses for a CMF Award. The CDFI 
Fund has differentiated between the two in past NOFAs and Applications 
as each relates to targeted income levels. Specifically, the targeted 
income level for Homeownership is Low-Income (80% of Area Median Income 
(AMI) and below), compared to a targeted income level of Very-Low 
Income (50% AMI and below) for rental housing. In addition to targeted 
income levels, are there other areas in the proposed Application where 
there should be different approaches to requesting and evaluating 
information on Homeownership and rental housing strategies?
    (f) Economic Development Activities: The CMF Interim Rule allows up 
to 30% of a CMF Award to be used for Economic Development Activities in 
conjunction with affordable housing and as part of a concerted 
strategy. In recent rounds, few Applicants requested to use their Award 
for Economic Development Activities. What, if any, barriers exist to 
using CMF Awards for Economic Development Activities? What, if any, 
changes are needed to the Application to address these barriers?
    (g) Priorities: From funding round to funding round, new priorities 
may emerge, such as disaster response, an economic downturn, or new 
initiatives. In the past, the CDFI Fund has addressed changing 
priorities on a round-by-round basis for Applications in a specific 
funding round. Should this approach be continued or adjusted? If it 
should be adjusted, what alternative approach should the CDFI Fund 
consider?
    (h) Multi-State Service Areas: The most recent CMF funding round 
(FY 2020) limits Applicants with multi-state service areas to a maximum 
of 15 states. The limit stems from a statutory requirement to ensure 
geographic diversity among CMF Awards. As a result, it is important to 
know which states can reasonably be expected to be served during the 
selection process. How can the CMF program best ensure geographic 
diversity? What, if any, changes should be made to the current approach 
to achieve this goal?
    (i) Rural Areas: CMF has a statutory obligation to ensure 
geographic diversity among Metropolitan and rural areas. Currently, 
Recipients are limited to serving rural areas within their approved 
Service Area. Should Recipients be allowed to serve any rural area 
census tract in any state, regardless of Service Area, in order to meet 
its rural commitments under the Award?
    (j) Leverage: Attracting capital, or leveraging the CMF Award, is a 
statutory requirement and key component of CMF. (1) Is the current 
approach, set forth in the proposed Application, where Applicants are 
asked to describe their different types of leverage (e.g. Enterprise-
Level, Reinvestment-Level, and Project-Level), clear? If not, how could 
it be clearer or otherwise improved? (2) The CDFI Fund is considering 
requesting that Applicants provide more documentation about the 
leverage they have secured at the time of the Application. What types 
of documentation related to proposed sources of leverage should the 
CDFI Fund collect? What, if any, burdens would collecting such 
documentation place on Applicants? (3) Per the CMF authorizing statute, 
Applicants to the CMF program must leverage their

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Award by at least 10 times. Currently, the CDFI Fund does not evaluate 
Applicants exceeding the 10:1 ratio more favorably than Applicants that 
meet the minimum 10 times benchmark. Should this approach be changed to 
recognize and score more favorably Applicants with total leverage 
exceeding the minimum requirement?
    (k) Program Income: During the five-year Investment Period, the 
repayment of principal and/or equity from projects financed with CMF is 
considered Program Income and must be reinvested in CMF-eligible 
projects. To date, the reinvestment has been limited to the Recipient's 
approved Service Area. Should Recipients be allowed to reinvest CMF 
Program Income in anywhere in the United States without restriction?
    (l) Streamlined Collection of Data on Track Record/Projections: As 
part of the Application, the CDFI Fund collects and evaluates 
information from Applicants related to their five-year track record and 
projections. In past Applications, this information has been collected 
in a format that indicates activity (cost and units) on an annual 
basis. In the proposed Application, the information collection format 
in Tables A-C has been changed to a cumulative five-year basis. Is the 
approach of collecting cumulative data sufficient or should the CDFI 
Fund continue to collect data for each year?
    (m) Alignment with other Housing Programs: The CDFI Fund recognizes 
that the Low Income Housing Tax Credit (LIHTC) program is a significant 
resource used by many CMF Recipients in CMF-financed projects. Are 
there ways the CDFI Fund can increase alignment with LIHTC to reduce 
the burden on Applicants, particularly related to requirements or 
reporting for tenant income determination, long term deed restrictions 
or restrictive covenants, and income averaging? If so, please describe 
specific ways the alignment could best be achieved?
    (n) Loan Loss Reserves/Guarantees: The capitalization of Loan Loss 
Reserves and providing Loan Guarantees are eligible CMF activities. To 
ensure oversight and effective use of CMF Awards, the CDFI Fund is 
considering a requirement that Loan Loss Reserves or Guarantees 
provided with a CMF Award be established as segregated funds or 
accounts restricted to provide credit enhancement only for eligible CMF 
activities. Would such a requirement be feasible for Recipients?

CMF Performance Report

    The CDFI Fund is also seeking input on the content of the CMF 
Performance Report. The CMF Assistance Agreement requires the 
collection of annual reports for compliance monitoring and program 
evaluation purposes.
    Data collected through the CMF Performance Report consists of three 
categories of data: (1) Mandatory data points, (2) conditionally 
required data points based on project characteristics, financing type 
or other condition, and (3) optional data points. For most compliance 
measures, AMIS calculates whether the Recipient is compliant or non-
compliant based on the data reported into the system. When the system 
determines that a non-compliance has occurred, the Recipient is 
required to complete an explanation of non-compliance prior to 
submitting the report to the CDFI Fund.
    Comments concerning the CMF Performance Report are invited on: (a) 
Whether the collection of information is necessary for the proper 
performance of the functions of the CDFI Fund, including whether the 
information shall have practical utility; (b) the accuracy of the CDFI 
Fund's estimate of the burden of the collection of information; (c) 
ways to enhance the quality, utility, and clarity of the information to 
be collected; (d) ways to minimize the burden of the collection of 
information on respondents, including through the use of technology; 
and (e) estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services required to provide information.
    The CDFI Fund also seeks comments on the following specific 
questions related to the proposed CMF Performance Report:
    (a) Data Collection Changes: Are the proposals for new data points 
and deleted data points in the CMF Performance Report appropriate? As 
explained above, proposed changes are highlighted or listed in the CMF 
Performance Report Data Points file. Will any of the proposed new data 
points for the CMF Performance Report highlighted in this file be 
infeasible or overly burdensome to collect?
    (b) Bulk Upload of Data: The CMF Performance Report does not 
currently allow Recipients to use a bulk upload process to create new 
``project records'' in the reporting system. A ``project record'' is a 
unique record that is created through the entry of basic data about an 
investment, such as the location of the investment, the amount of the 
CMF Award Committed, and other information that typically is entered 
when an investment is made; data in the project record typically does 
not have to be revised or changed. The intent of the current policy is 
to minimize the accidental creation of duplicate ``project records'' by 
Recipients. The CDFI Fund is evaluating the feasibility of allowing 
Recipients to upload and create multiple project records, such as by 
uploading a spreadsheet. How can the CDFI Fund ensure that Recipients 
do not create duplicate records or generate other data quality issues 
if ``project records'' are allowed to be created in this manner?
    (c) Output Reports: The CDFI Fund began providing output reports 
(summary data based on data inputted by Recipients) in the CMF 
Performance Report that can be downloaded for individual Recipients to 
use beginning in July 2020. What modifications to these reports or 
other output reports would be helpful to Recipients?
    (d) Data Collection Frequency: An ``annual project report'' record 
is a record within the reporting system that generally consists of data 
points that are updated as a Project progresses, such as dates, or data 
that is associated with single performance years, such as occupancy in 
that performance year. A ``project record'' generally consists of 
information entered only one time for each Project. Is there any data 
currently being collected annually on an ``annual project report'' 
record that should be collected only once? Is there any data on the 
``project record'' that should be collected annually instead of only 
once?
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collections of 
information displays a valid OMB control number.

    Authority:  Pub. L. 110-289, 12 CFR part 1807.

Jodie L. Harris,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2020-28757 Filed 12-29-20; 8:45 am]
BILLING CODE 4810-70-P