Tuesday, November 5, 2013

Funding Available for Community Development Financial Institutions

Economically distressed communities in the United States often lack institutions that offer residents and business owners access to affordable and responsible financial products and services. Community Development Financial Institutions (CDFIs) help fill this need by providing loans, investments, technical assistance and other financial services to under-served populations and communities.

The Community Development Financial Institutions Fund in the United States Treasury Department supports CDFIs through a range of programs, including a certification process, monetary awards, technical assistance and capacity building opportunities.

Last week, the CDFI Fund announced the availability of funding for the following programs:
  • $144 million for CDFI Program awards; 
  • $35 million for Healthy Food Financing Initiative Financial Assistance awards; 
  • $12 million for the Native American CDFI Assistance (NACA) Program awards. 
The proposed funding is still subject to Congressional appropriations, meaning the total amount of funding may decrease.

The CDFI Program: Financial Assistance (FA) & Technical Assistance (TA) Awards
  • TA awards of up to $100,000 are available to certified CDFIs, as well as organizations working toward CDFI certification, to build their capacity to better address the needs of their target markets, expand into new investment areas or targeted population and/or become certified CDFIs. Awards may be used for diverse purposes, including “to purchase equipment, materials, or supplies; for consulting or contracting services; to pay the salaries and benefits of certain personnel; and/or to train staff or board members.” While both certified and non-certified CDFIs are eligible to apply, non-certified organizations must be able to become certified within two years of receiving a TA award.
  • FA awards of up to $2 million are available to certified CDFIs for financing capital, loan loss reserves, capital reserves, or operations. FA awards are made in the form of equity investments, loans, deposits, or grants and must be matched dollar-for-dollar with non-federal funds of the same type as the award itself. To be eligible for a FA award, CDFIs must be certified or submit a separate certification application. Applicants must have developed a comprehensive plan for: deploying credit, capital and financial services to make a measurable impact on community development within their target market(s); and/or expanding into new investment areas or targeted populations.
  • Those eligible for a FA award can also apply for supplemental funding through the Healthy Food Financing Initiative to expand their healthy food-focused financing activities, providing residents with improved access to nutritious food through strategies including “grocery stores, mobile food retailers, farmers markets, cooperatives, corner stores and bodegas.” 
The Native American CDFI Assistance (NACA) Program
The NACA Program supports CDFIs that primarily serve Native American, Alaska Native, and Native Hawaiian communities. Both financial and technical support are available for CDFIs “in various stages of development – from organizations in the early planning stages of creating a CDFI, to tribal entities working to certify an existing lending program, to established CDFIs in need of further assistance.”

Last year, 192 organizations received FA and TA awards totaling over $172 million through the CDFI Program, including 10 awards totaling more than $22 million through the Healthy Food Financing Initiative. Additionally, 35 organizations serving Native Communities received $12.4 million through the NACA Program.

Applications for the CDFI Program (including the Healthy Food Financing Initiative) and NACA Program applications are due on December 23, 2013 at 12:00 p.m. Eastern Time. Application materials, including pre-recorded webinars with additional guidance, are available online for the CDFI Program and NACA Program. In addition, applicants can register for live webinars or an in-person workshop to be held in Washington DC on November 14, 2013. To locate a CDFI in your state, click here.

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