Department of the Treasury OIG OIG-22-020 (FINANCIAL MANAGEMENT: Audit of the Community Development Financial Institutions Fund’s Financial Statements for Fiscal Y)
Summary
Audit Report OIG-22-020 of the Office of Inspector General, Department of the Treasury, dated December 15, 2021, on the audit of the Community Development Financial Institutions Fund's financial statements for Fiscal Years 2021 and 2020. A memorandum from Ade Bankole, Acting Director, Financial Statement Audits, to Jodie Harris, Director of the CDFI Fund, states that KPMG LLP performed the audit under a contract monitored by the office. KPMG found the statements fairly presented in all material respects, no material weaknesses in internal control over financial reporting and no instances of reportable noncompliance. The attached Agency Financial Report states that in FY 2021 the CDFI Fund provided nearly $1.5 billion in monetary awards and loans and allocated $5.0 billion in New Markets Tax Credits.
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Audit Report
OIG-22-020
FINANCIAL MANAGEMENT
Audit of the Community Development Financial
Institutions Fund’s Financial Statements for Fiscal Years
2021 and 2020
December 15, 2021
Office of Inspector General
Department of the Treasury
This Page Intentionally Left Blank
DEPARTMENT OF THE TREASURY
W ASHINGTON, D.C. 20220
OFFICE OF
INSPECTOR GENERAL
December 15, 2021
MEMORANDUM FOR JODIE HARRIS, DIRECTOR
COMMUNITY DEVELOPMENT FINANCIAL
INSTITUTIONS FUND
FROM: Ade Bankole /s/
Acting Director, Financial Statement Audits
SUBJECT: Audit of the Community Development Financial Institutions
Fund’s Financial Statements for Fiscal Years 2021 and 2020
We hereby transmit the attached subject report. Under a contract monitored by our
office, KPMG LLP (KPMG), a certified independent public accounting firm, audited
the financial statements of the Community Development Financial Institutions
(CDFI) Fund as of September 30, 2021 and 2020, and for the years then ended.
The contract required that the audit be performed in accordance with U.S.
generally accepted government auditing standards, Office of Management and
Budget Bulletin No. 21-04, Audit Requirements for Federal Financial Statements,
and the Government Accountability Office/Council of the Inspectors General on
Integrity and Efficiency, Financial Audit Manual.
In its audit of the CDFI Fund, KPMG found
• the financial statements were fairly presented, in all material respects, in
accordance with U.S. generally accepted accounting principles;
• no deficiencies in internal control over financial reporting that are considered
material weaknesses; and
• no instances of reportable noncompliance with laws, regulations, contracts,
and grant agreements tested.
In connection with the contract, we reviewed KPMG’s report and related
documentation and inquired of its representatives. Our review, as differentiated
from an audit performed in accordance with U.S. generally accepted government
auditing standards, was not intended to enable us to express, and we do not
express, an opinion on the CDFI Fund’s financial statements or conclusions about
the effectiveness of internal control or compliance with laws and regulations.
KPMG is responsible for the attached auditors’ report dated December 15, 2021,
and the conclusions expressed therein. However, our review disclosed no instances
Page 2
where KPMG did not comply, in all material respects, with U.S. generally accepted
government auditing standards.
If you wish to discuss this report, please contact me at (202) 927-5329, or a
member of your staff may contact Catherine Yi, Audit Manager, Financial
Statement Audits, at (202) 927-5591.
Attachment
AGENCY FINANCIAL REPORT
FISCAL YEAR 2021
Community Development Financial Institutions Fund
U.S. Department of the Treasury
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The content on this page is unaudited. Please see the accompanying auditor’s report.
TABLE OF CONTENTS
Message from the Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Program Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Bank Enterprise Award Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Capital Magnet Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
CDFI Bond Guarantee Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
CDFI Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
CDFI Rapid Response Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Economic Mobility Corps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Native Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
New Markets Tax Credit Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Small Dollar Loan Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Administrative Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Status of Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Financial Statement and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Appendix: Glossary of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
3
The content on this page is unaudited. Please see the accompanying auditor’s report.
Notes:
Capitalized terms used but not defined in this document have the meanings as defined in the CDFI
Fund's authorizing statute, applicable program regulations, or applicable notice of availability.
Numerals with decimal units are shown to one decimal place and are rounded to the nearest
tenth. For example, 1.24 million is rounded down to 1.2 million, and 1.25 is rounded up to 1.3
million.
4
The content on this page is unaudited. Please see the accompanying auditor’s report.
MESSAGE FROM THE DIRECTOR
I am pleased to present the fiscal year (FY) 2021 Agency Financial Report for the U.S. Department
of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund).
Since its inception in 1994, the CDFI Fund has provided more than $5.1 billion through a variety of
monetary award programs and $66.0 billion in tax credits through the New Markets Tax Credit
Program, and has guaranteed more than $1.8 billion in bonds through the CDFI Bond Guarantee
Program, all to increase the impact of Community Development Financial Institutions (CDFIs) and
other community development organizations in economically distressed and underserved
communities. During this time, the CDFI Fund has helped build the capacity of more than 1,200
Certified CDFIs, which are located in all 50 states as well as in the District of Columbia, Guam, and
Puerto Rico.
In FY 2021 alone, the CDFI Fund continued to build on this strong history of performance by
providing nearly $1.5 billion 1 in monetary awards and loans, committing to guarantee $100.0
million in bonds, and allocating $5.0 billion in New Markets Tax Credits.
CDFI Fund award recipients have successfully leveraged billions in private sector investment to
create jobs, build affordable housing, build essential community facilities, provide financial
counseling, and invest in neighborhood revitalization initiatives—all in distressed and
underserved communities lacking access to traditional lending or banking institutions.
The requests for the CDFI Fund’s awards continued to exceed the supply of resources for nearly
all programs in FY 2021, demonstrating strong applicant demand.
FY 2021 CDFI Fund Programs - Program Demand
Awards
Program
Requested Available
Bank Enterprise Award Program 2 N/A $26.0 million
Capital Magnet Fund 3 N/A $380.0 million
CDFI Bond Guarantee Program $575.0 million $500.0 million
CDFI Program - Base-Financial Assistance and Technical $391.6 million $140.2 million
Assistance
CDFI Program and NACA Program - Disability Funds- $10.9 million $6.0 million
Financial Assistance
1
This includes program rounds that were opened in FY 2020 and awarded in FY 2021
2
The FY 2021 round of the Bank Enterprise Award Program opened in October 2021, and the application deadline is in December 2021.
3
The FY 2021 round of the Capital Magnet Fund opened in September 2021, and the application deadline is in November 2021.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
CDFI Program and NACA Program - Healthy Food Financing $76.6 million $23.0 million
Initiative-Financial Assistance
CDFI Program and NACA Program - Persistent Poverty $60.1 million $20.4 million
County-Financial Assistance
CDFI Rapid Response Program $2.9 billion $1.3 billion
Native American CDFI Assistance Program (NACA Program) $26.1 million $14.9 million
– Base Financial Assistance and Technical Assistance
New Markets Tax Credit Program 4 $15.1 billion $5.0 billion
Small Dollar Loan Program $26.3 million $13.5 million
In FY 2021, the CDFI Fund undertook several key administrative and program initiatives to
maximize its impact, efficiency, and accessibility. These included:
• Deploying more than $1.2 billion in awards through the CDFI Rapid Response Program
(CDFI RRP)—authorized by the Consolidated Appropriations Act of 2021 (P.L. 116-
260)—to 863 CDFIs to help communities recover from the economic effects of the
COVID-19 pandemic. This was the most grants ever awarded by the CDFI Fund in a
single program application round. It was also the quickest program round ever
administered by the CDFI Fund; CDFI RRP moved from opening to application review
and evaluation to award announcement in less than four months.
• Announcing in February 2021 over $175.0 million in Capital Magnet Fund (CMF)
awards to 48 organizations under the FY 2020 round of the program. This was the
largest amount of funding ever awarded under the program. However, the FY 2021
round of the program, which opened in September 2021, will more than double this
amount and award up to $380.0 million in funding. The CDFI Fund expects to
announce the awards in spring 2022.
• Collaborating with AmeriCorps to make the inaugural round of grants under the FY
2021 round of the Economic Mobility Corps (EMC). Three organizations received a
total of more than $2.5 million to place 156 AmeriCorps service members in CDFIs for
two years. In addition, 13% of EMC service members will be serving in Persistent
Poverty Counties.
• Awarding more than $10.0 million in grants to CDFIs under the inaugural round of the
Small Dollar Loan Program (SDL Program). Authorized by the Dodd-Frank Wall Street
Reform and Consumer Protection Act (P.L. 111-203), the SDL Program is intended to
help unbanked and underbanked populations build credit, access safe, affordable
capital, and gain greater access to the mainstream financial system. CDFIs may use the
4
Numbers reflect the calendar year (CY) 2020 round of the program, which opened on September 22, 2020. The CDFI Fund awarded allocations
on September 1, 2021.
6
The content on this page is unaudited. Please see the accompanying auditor’s report.
grants for Loan Loss Reserves and Technical Assistance that will enable them to
establish and maintain small-dollar loan programs.
• Continuing to support investment in Persistent Poverty Counties through targeted
assistance provided by the Bank Enterprise Award Program, CDFI Program, and Native
American CDFI Assistance Program. In the last fiscal year, CDFI Program award
recipients have invested or lent $4.3 billion in PPCs, which is approximately 17 % of
the total amount of CDFI Program awards that award recipients have invested or lent.
The ongoing pandemic and resulting economic disruptions have created a challenging
environment for the CDFI Fund’s staff as well as for the nationwide network of CDFIs, Community
Development Entities, and mission-driven, community-based organizations. Despite the
challenges, FY 2021 was a year of significant progress in the work to support underserved
communities across the country.
The accomplishments outlined in this report would not have been possible without the dedicated
efforts of the CDFIs and community-based organizations that take part in our programs. The CDFI
Fund’s achievements over the past year would have been wholly impossible were it not for the
hard work, dedicated service, and professionalism of the CDFI Fund staff—to whom I am
exceptionally grateful.
Jodie Harris
Director
Community Development Financial Institutions Fund
December 15, 2021
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The content on this page is unaudited. Please see the accompanying auditor’s report.
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8
The content on this page is unaudited. Please see the accompanying auditor’s report.
OVERVIEW
The Community Development Financial Institutions Fund
The Creation of the CDFI Fund
Established by the Riegle Community Development and Regulatory Improvement Act of 1994
(Riegle Act; P.L. 103-325), the Community Development Financial Institutions Fund (CDFI Fund)
has worked for more than a quarter of a century to generate economic opportunity in places
where opportunity is needed most.
People and communities with limited access to financial services and products lack the important
tools they need to save for the future, build credit, buy a home, start a business, and develop
affordable housing and community facilities. As a result, they have fewer opportunities to grow
and thrive and fewer opportunities to join America’s economic mainstream.
The CDFI Fund’s Vision
An America in which all people and communities have access to the investment capital and
financial services they need to prosper.
The CDFI Fund’s Mission
To expand economic opportunity for underserved people and communities by supporting the
growth and capacity of a national network of community development lenders, investors, and
financial service providers.
The Work of the CDFI Fund
The CDFI Fund’s role is to generate economic opportunity in underserved low-income
communities by expanding access to credit, capital, and financial services. It accomplishes this by
providing capital through the following active programs in FY 2021:
• Bank Enterprise Award Program (BEA Program) – Provides monetary awards to federally-
insured banks and thrifts that demonstrate increased lending, investment, and service
activities in the most economically distressed communities and/or in CDFIs
• Capital Magnet Fund (CMF) – Provides awards to CDFIs and nonprofit affordable housing
organizations for the development, preservation, rehabilitation, and purchase of
affordable housing and for related economic development in low-income communities
• CDFI Bond Guarantee Program – Serves as a source of long-term, low-cost capital for
CDFIs by guaranteeing bonds issued to support CDFIs that make investments for eligible
community or economic development purposes
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The content on this page is unaudited. Please see the accompanying auditor’s report.
• Community Development Financial Institutions Program (CDFI Program) – Provides
Financial Assistance and Technical Assistance awards to help Certified and Emerging CDFIs
sustain and expand their services and build their technical capacity. The program also
includes:
- Healthy Food Financing Initiative (HFFI) – Provides Financial Assistance awards to
Certified CDFIs that invest in businesses that provide healthy food options, such as
grocery stores, farmers’ markets, bodegas, food co-ops, and urban farms
- Disability Funds-Financial Assistance (DF-FA) – Provides Financial Assistance awards
to Certified CDFIs that wish to expand their financing activities and services to benefit
persons with disabilities
- Persistent Poverty County-Financial Assistance (PPC-FA) – Provides Financial
Assistance awards to Certified CDFIs that provide Financial Products in Persistent
Poverty Counties (PPCs)
• CDFI Rapid Response Program (CDFI RRP) – A pandemic recovery program consisting of a
single application round that was conducted in FY 2021 and provided grants to enable
CDFIs to deliver emergency support to distressed and underserved communities suffering
from the economic hardships created by the COVID-19 pandemic
• Economic Mobility Corps (EMC) – A joint initiative of the CDFI Fund and AmeriCorps that
places full-time national service members in Certified CDFIs to enhance their capacity to
provide financial education and financial counseling
• Native Initiatives – Includes the Native American CDFI Assistance Program (NACA
Program), which provides Financial Assistance and Technical Assistance awards to build
the capacity of CDFIs serving Native American, Alaska Native, and Native Hawaiian
communities
• New Markets Tax Credit Program (NMTC Program) – Awards tax credit allocation
authority to Certified Community Development Entities, enabling them to attract
investment from the private sector and invest the funds in low-income communities
• Small Dollar Loan Program (SDL Program) – Provides grants to help Certified CDFIs offer
fair and affordable small dollar loan products in communities that are underserved by
mainstream financial institutions
These awards have leveraged billions of dollars in private sector investment. They have increased
the impact of CDFIs, CDEs, and other community-based development organizations by expanding
their capacity to deliver the credit, capital, and financial services that generate new economic
opportunities in underserved communities.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
What is a CDFI?
CDFIs are mission-driven financial institutions that specialize in increasing access to financial
services in underserved and low-income areas. They possess a keen sensitivity to the needs of
local residents and businesses, and their work reflects a bottom-up, rather than a top-down,
approach to community investment and revitalization.
Today, there are 1,271 CDFIs serving urban, rural, and Native communities throughout the United
States. CDFIs are found in all 50 states, the District of Columbia, Guam, and Puerto Rico. They
bridge diverse public and private sector interests to serve people and places that traditional
financial institutions usually do not. CDFIs provide:
• loans to businesses and projects that otherwise would find it difficult to qualify for
financing;
• safe, affordable banking services that otherwise would not be available in the community;
• loan rates and terms that are more flexible than those offered by traditional lenders; and
• development services—such as business planning, credit counseling, and homebuyer
education—to help their borrowers use credit effectively and build financial strength.
As a result, CDFIs support the creation of small businesses and local jobs and the development of
affordable housing, community facilities, and schools—all in places where economic opportunity
is needed most.
Types of CDFIs
There are four basic types of CDFIs:
1. Community development banks, thrifts, and depository institution holding companies –
Regulated, for-profit corporations that provide basic retail banking services as well as capital
to rebuild economically distressed communities through targeted lending and investment
2. Community development credit unions – Regulated, member-owned cooperatives that
promote ownership of assets and savings and provide affordable loans and retail financial
services
3. Community development loan funds – Typically nonprofits that provide high-quality loans
and development services to microenterprises, small businesses, affordable housing
developers, and community service organizations
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The content on this page is unaudited. Please see the accompanying auditor’s report.
4. Community development venture capital funds – For-profit and nonprofit organizations that
provide equity and debt-with-equity features to businesses in distressed communities
Although each type of CDFI provides different products and services to different types of
customers, they all share a common goal of revitalizing low-income communities.
Types of certified CDFIs
(Percentage by type of 1,271 Certified CDFIs as of September 30, 2021)
1%
11%
566 Loan Funds
387 Credit Unions
13%
45%
168 Banks or Thrifts
134 Depository Institution
Holding Companies
16 Venture Capital Funds
30%
CDFI Certification
For an organization to be eligible for most of the CDFI Fund’s programs, it is required to be
certified as a CDFI. To qualify for certification, it must meet seven eligibility requirements:
1. Be a legal entity at the time of application
2. Have a primary mission of promoting community development
3. Primarily serve one or more target markets
4. Be an insured depository institution or otherwise have the provision of financial products
and services as its predominant business activity
5. Provide development services (such as technical assistance or counseling) in conjunction
with its financing activity
6. Maintain accountability to its target market
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The content on this page is unaudited. Please see the accompanying auditor’s report.
7. Be a non-governmental entity nor be controlled by any governmental entities
Once a CDFI has been certified, it must submit an Annual Certification and Data Collection Report
(ACR) to allow the CDFI Fund to assess whether the organization remains in compliance with
certification requirements and to monitor any changes in the organization’s financial and other
data.
The most recent ACR indicates that the CDFI industry has more than $151.8 billion in total assets
and that total liabilities are roughly $23.0 billion less than total assets ($128.9 billion). Net worth
for the CDFI industry is slightly less than $21.3 billion. 5
Asset Size of ACR Reporting CDFIs by Institution Type 6
CDFI Institution Type N Sum of Total Share of Total Average of Total Median of Total
Assets ($) Assets (%) Assets ($) Assets ($)
Bank/Thrift 109 $38,855,251,305 25.6% $356,470,195 $252,696,000
Credit Union 223 $92,702,624,934 61.1% $415,706,838 $106,029,258
Loan Fund 464 $20,091,968,927 13.2% $43,301,657 $9,525,323
Venture Capital Fund 10 $179,453,963 0.1% $17,945,396 $4,501,032
Total 806 $151,829,299,129 100.0% $188,373,820 $28,223,453
What is a CDE?
A Community Development Entity (CDE) is a domestic corporation or partnership that serves as a
financial intermediary vehicle for the provision or purchase of loans, investments, or financial
5
Data from the 2020 ACR Summary Report (https://www.cdfifund.gov/node/1004981).
6
The dollar amounts reported above are based on ACR data submitted for the 2020 reporting cycle by all certified CDFIs required to submit a 2020
ACR. CDFIs certified in 2020 or later were not required to submit a 2020 ACR. The data universe consisted of 1,030 2020 ACR records in the CDFI
Fund ACR database as of July 8, 2021. After data cleaning standards were applied, final data analysis was conducted using the 2020 ACR records of
881 certified CDFIs. Seventy-four holding companies were excluded from the analysis above to avoid double-counting since they were certified
based on activity of the certified affiliated bank CDFIs, and one CDFI did not complete the Total Assets section of the ACR.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
counseling in low-income communities. Certification as a CDE allows organizations to participate
either directly or indirectly in the NMTC Program.
The NMTC Program attracts investment capital to low-income communities by permitting
individual and corporate investors to receive a tax credit against their federal income taxes in
exchange for making equity investments in CDEs. A CDE applies to the CDFI Fund to receive the
authority to allocate a specified dollar amount of tax credits. The CDE then offers the tax credits
to investors in exchange for their investments and uses those funds to make loans to or equity
investments in qualified businesses in the community.
Through the NMTC Program, CDEs support many type of businesses, including manufacturing,
food, retail, housing, health care, technology, energy, education, and child care. Communities
benefit from the jobs created by these investments as well as from the community facilities and
commercial goods and services that the businesses provide.
CDE Certification
In addition to certifying CDFIs, the CDFI Fund certifies CDEs. To be certified as a CDE, an
organization must apply for certification and meet three eligibility requirements:
1. Be a legal entity at the time of application
2. Have a primary mission of serving low-income communities
3. Be accountable, through representation on a governing board or advisory board, to the
residents of its targeted low-income communities
When an organization is certified as a CDE, it is eligible to apply to participate in the NMTC
Program.
The Operations of the CDFI Fund
The CDFI Fund is a wholly-owned government corporation within the U.S. Department of the
Treasury and performs a wide range of functions to ensure that it fulfills its mission.
Organization
The organization chart below shows how the CDFI Fund is structured to best support the active
programs it administered in FY 2021.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Community Development Advisory Board
In accordance with the Riegle Act, the CDFI Fund’s organization includes a Community
Development Advisory Board that advises the Director of the CDFI Fund on policies guiding the
activities of the CDFI Fund. The Advisory Board is required to meet at least once each year.
The Advisory Board consists of 15 members: nine private citizens, who are appointed by the
President, and six other members—the Secretaries of the Departments of Agriculture,
Commerce, Housing and Urban Development, Interior, and Treasury and the Administrator of the
Small Business Administration or his or her designee. The nine private citizens include:
• two officers of existing CDFIs;
• two officers of insured depository institutions;
• two officers of national consumer or public interest organizations;
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The content on this page is unaudited. Please see the accompanying auditor’s report.
• two individuals with expertise in community development; and
• One individual with personal experience and specialized expertise in the unique lending
and community development issues of Indian tribes on Indian reservations.
The Chair of the Advisory Board is elected from among the nine private citizens and also is
elected by them.
Appropriations and Sources of Funding
Congress appropriates funding to the CDFI Fund each year. The appropriation consists of two
types of funds:
• Program funds, which are used for financial assistance and technical assistance awards
(such as grants, loans, deposits, and equity investments) and capacity building/training
contracts, can be spent over two fiscal years; and in the case of the Emergency Support
Program 7, the funds have no expiration date
• Administrative funds, which are used to cover the costs to administer all of the CDFI
Fund’s programs, including the NMTC Program and the CDFI Bond Guarantee Program,
must be spent during the fiscal year for which they are appropriated
7
This program received appropriations in FY 2021 but there was not an active application round during the fiscal year.
16
The content on this page is unaudited. Please see the accompanying auditor’s report.
In FY 2021, Congress appropriated the CDFI Fund $270.0 million through the annual
appropriations process. Congress also provided a supplemental appropriation of an additional
$3.0 billion through the Consolidated Appropriations Act of 2021 (P.L. 116-260) to provide
emergency support to CDFIs and communities responding to the COVID-19 pandemic.
Congressional Appropriations
(Amounts in Millions)
FY 2021 FY 2020
Appropriations
Amount Percent Amount Percent
Annual Appropriations:
- BEA Program $26.0 9.6% $25.0 9.5%
- CDFI Program $188.0 8 69.6% $185.5 70.8%
- Economic Mobility Corps $2.0 0.7% $2.0 0.8%
- Native Initiatives $16.5 6.1% $16.0 6.1%
- Small Dollar Loan Program $8.5 3.2% $5.0 1.9%
- Administrative Cost $29.0 10.7% $28.5 10.9%
Total Annual Appropriations $270.0 100.0% $262.0 100.%
Supplemental Appropriations:
- CDFI Rapid Response Program 9 $1,250.0 41.7%
- Emergency Support Program $1,750.0 58.3%
Total Supplemental Appropriations $3,000.0 100.0%
Total Amounts Funded $3,270.0 100.0%
Less Amounts Not Obligated 10 $1,964.5 $8.5
Total Funding Used $1,305.5 39.9% 11 $253.5 96.8%
8
Includes funding for Base-FA, TA, PPC-FA, DF-FA, and HFFI awards.
9
The CDFI Rapid Response Program was a pandemic recovery program that was funded by Congress in FY 2021 for a single application round that
was conducted in FY 2021.
10
In FY 2020, the CDFI Fund did not obligate $8.5 million, which included $1.1 million of the CDFI Program, $0.4 million of the Native Initiatives,
$5.0 million of the Small Dollar Loan Program, and $2.0 million of the Economic Mobility Corps.
In FY2021, the CDFI Fund did not obligate $1.964 billion, which included $167.7 million of the CDFI Program, $25.8 million of the Bank Enterprise
Award Program, $14.6 million of the Native Initiatives, $2.7 million of the Small Dollar Loan Program, $2.0 million of the Economic Mobility Corps,
and $1.751 billion of the Emergency Support Program.
11
The percentage of total Annual Appropriations used (excluding Supplemental Appropriations) is 21.6%.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Appropriations include fiscal year budget authority, and the amount available in a given year
includes any unobligated funds from the prior year 12 that may be carried over. Also, the annual
appropriation includes authority to make loans and issue
It should be noted that the funding for the Capital Magnet Fund is not provided through the
annual appropriations process. Instead, it comes from allocations made by two Government-
Sponsored Enterprises (GSEs), the Federal National Mortgage Association (Fannie Mae) and the
Federal Home Loan Mortgage Corporation (Freddie Mac), on a mandatory basis, as authorized by
the Housing and Economic Recovery Act of 2008.
Likewise, the NMTC Program is also not “funded” through the annual appropriation process.
Authorization to allocate New Markets Tax Credits is provided through the Taxpayer Certainty
and Disaster Tax Relief Act of 2020 (P.L. 116-260). The CDFI Bond Guarantee Program is also not
“funded” but is authorized by Congress through the annual appropriation process.
Sources of CDFI Fund Funding
(Amounts in Millions)
FY 2021 FY 2020
Budgetary Appropriations $3,270.0 $262.0
Prior Year Amounts Deobligated,
Used to Fund Current Year Obligations $0.4 $0.4
Carryover from Prior Year $8.5 $190.1
No-Year Funds $2.2 $4.0
Borrowing Authority Used $111.4 $190.4
Total Sources of Funds $3,392.5 $646.9
12
Details regarding unobligated funds from a prior year, if any, are discussed under that program in the Program Discussion and Analysis section.
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PROGRAM DISCUSSION AND ANALYSIS
The Community Development Financial Institutions Fund
The CDFI Fund’s Programs
In FY 2021, the CDFI Fund offered nine programs to help CDFIs, CDEs, banks, credit unions, and
community development organizations generate economic opportunity by increasing access to
financial products and services in low-income communities:
• Bank Enterprise Award Program
• Capital Magnet Fund
• CDFI Bond Guarantee Program
• CDFI Program
• CDFI Rapid Response Program
• Economic Mobility Corps
• Native Initiatives
• New Markets Tax Credit Program
• Small Dollar Loan Program
The CDFI Fund provides awards for each of these programs through a rigorous application
process.
Bank Enterprise Award Program
Established in 1994, the Bank Enterprise Award Program (BEA Program) recognizes and seeks to
expand the important role that traditional banks and thrifts play in community development.
How it Works
Purpose
The BEA Program provides monetary awards to FDIC-insured banks and thrifts that demonstrate
that they have increased their investments and support to CDFIs or their lending, investing, or
service-related activities in the most economically distressed communities.
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The BEA Program defines “the most economically distressed communities” as those where at
least 30% of the residents have incomes below the national poverty level and where the
unemployment rate is at least 1.5 times the national unemployment rate. Thus, the program
targets communities with the greatest needs and generates economic opportunity for those with
the least access to financial products and services.
Award Process
The BEA Program is unique among the CDFI Fund’s financial award programs in that it makes
awards based on qualified investments, loans, and activities that applicants have successfully
completed. The CDFI Fund’s other awards are based on an applicant’s plans for the future and
ability to fulfill those plans.
To be eligible for a BEA Program award, an applicant must be an FDIC-insured depository
institution and demonstrate that it has increased its Qualified Activities in distressed
communities. There are three categories of Qualified Activities:
• CDFI-Related Activities - Providing equity investments, grants, equity-like loans, loans,
deposits, and/or technical assistance to Certified CDFIs
• Distressed Community Financing Activities - Providing direct lending or investment in the
form of affordable home mortgages, affordable housing development loans or
investments, home improvement loans, education loans, small business loans or
investments, small dollar consumer loans, and commercial real estate development loans
or investments to residents or businesses located in distressed communities
• Service Activities – Providing access to financial products and services, such as new
branches, new automated teller machines, checking accounts, savings accounts, check
cashing, financial counseling, or Individual Development Accounts to residents of
distressed communities
The amount of each award is determined by the increases in the Qualified Activities achieved by
applicants over a one-year assessment period; the greater the increase, the larger the award. The
applicant’s CDFI certification status and total asset size are also factored into the award amount.
The CDFI Fund prioritizes awards according to the category of Qualified Activity. Priority is given
to CDFI-Related Activities, followed by Distressed Community Financing Activities, and then
Service Activities. Prioritizing CDFI-Related Activities encourages applicants to provide low-cost
capital and operating support to Certified CDFIs, which strengthens Certified CDFIs and expands
their capacity to provide financial products and services to residents and businesses in distressed
communities.
A bank or thrift that receives an award is required to reinvest it in BEA Program Qualified
Activities. This increases the flow of capital to the most economically distressed communities and
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accelerates the growth of businesses, the creation of jobs, the development of affordable
housing, and the availability of financial services.
Awards since Inception
Since the inception of the BEA Program in 1994, the CDFI Fund has completed 25 rounds of the
program and has awarded nearly $546.0 million.
FY 2021 Activities
The CDFI Fund originally planned to open the FY 2021 application round of the BEA Program in FY
2021. However, as FY 2021 progressed, the CDFI Fund recognized that the planned BEA Program
application round would take place at the same time when the application rounds for other CDFI
Fund programs, particularly the new CDFI Rapid Response Program, were underway and the new
Small Dollar Loan Program was being launched. For the convenience of organizations intending to
apply for awards through the BEA Program and these other programs during this time, the CDFI
Fund postponed the FY 2021 application round of the BEA Program. The CDFI Fund will open the
FY 2021 round of the BEA Program in mid-October 2021 and will announce the awards in FY
2022.
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BEA PROGRAM
AM O UTS REQ UESTED VS AM O UNTS AVAI LABLE
Amount Requested Amount Available
$218,100,000
$211,650,000
$250,000,000
$200,000,000 $179,300,000
$150,071,946
$145,640,000 $143,200,000
$150,000,000 $132,300,000
$88,500,000 $91,000,000
$100,000,000
$23,000,000 $25,000,000 $25,000,000 $25,200,000 $26,000,000
$18,000,000 $17,100,000 $18,000,000 $18,000,000 $19,000,000
$50,000,000
$-
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
BEA Program Impact
During the past five rounds of the BEA Program, from FY 2015 through FY 2020, award recipients:
• increased their investments, lending, and technical assistance to Certified CDFIs by $227.7
million;
• increased their lending and direct investments in distressed communities by more than
$2.0 billion; and
• increased the provision of financial services in distressed communities by $68.8 million.
During this period, more than 90% of BEA Program award recipients were FDIC-insured
depository institutions that were defined as Small or Intermediate Banks according to Federal
Financial Institutions Examinations Council Community Reinvestment Act (CRA) Asset Size
Thresholds.
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Capital Magnet Fund
The Capital Magnet Fund (CMF) was created in 2008 to spur investment in affordable housing
and related economic development initiatives that serve low-income families and low-income
communities across the nation.
How it Works
Purpose
Congress authorized the creation of the CMF through the Housing and Economic Recovery Act of
2008 (HERA; P.L. 110-289). HERA requires two Government-Sponsored Enterprises—Fannie Mae
and Freddie Mac—to set aside for the CMF and the Housing Trust Fund each year an amount
equal to 4.2 basis points for every dollar of their unpaid principal balances of total new mortgage
purchases, unless otherwise instructed by the Federal Housing Finance Agency (FHFA). Of the
amount set aside by Fannie Mae and Freddie Mac each year, 35% is allocated to the CDFI Fund
for the CMF.
The purpose of the CMF is to attract private capital for affordable housing and economic
development activities in economically distressed areas. CMF award recipients are required to
finance and/or to support 10 times the grant amount in eligible project costs.
Award Process
Through the CMF, the CDFI Fund provides competitively awarded grants to organizations that
serve low-income communities. To be eligible for a CMF Award, an applicant must be a Certified
CDFI or a nonprofit organization with a principal purpose of developing or managing affordable
housing.
All applicants must demonstrate that they have been in existence as a legally formed entity for at
least three years prior to the funding round application deadline and meet any other eligibility
requirements outlined in the Notice of Funds Availability for the round.
CMF award recipients can use their grants to finance affordable housing activities, related
economic development activities, and community service facilities. They must use at least 70% of
their CMF grants to finance affordable housing and may request to use up to 30% of the funds to
finance economic development activities linked to affordable housing. Award recipients use the
funds to create a variety of financing tools, such as loan loss reserves, revolving loan funds, risk-
sharing loans, and loan guarantees.
The CDFI Fund seeks to ensure that CMF award recipients serve diverse geographic areas,
including urban and rural areas as well as multiple states. It also seeks to promote CMF-financed
activity in areas of economic distress.
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Leveraging is a key component of the CMF. Award recipients are required to leverage their CMF
awards at a ratio of at least 10-to-1. Sources of capital leveraged may include loans from banks,
program-related investments from foundations, Low Income Housing Tax Credit investments, and
funds contributed by the award recipient, state or local governments, or any number of other
private or public sources.
The leveraging requirement multiplies the power of each CMF award at least 10 times over,
ensuring that more low-income people and low-income communities nationwide have access to
affordable housing.
Awards since Inception
Since the inception of the CMF in 2008, the CDFI Fund has completed six rounds of the program
and has awarded grants totaling more than $740.0 million.
HERA provides the FHFA with the authority to temporarily suspend allocations from Fannie Mae
and Freddie Mac upon certain findings. In 2010, the FHFA temporarily suspended these
allocations. However, Congress appropriated $80.0 million to fund an initial round of the CMF in
FY 2010.
In December 2014, the FHFA lifted its suspension of Fannie Mae’s and Freddie Mac’s allocations
and directed them to begin allocating funds for the CMF based on their calendar year (CY) 2015
activity. The FY 2016 CMF round was the first round funded through Fannie Mae’s and Freddie
Mac’s annual allocations, and it was followed by rounds in FY 2017 through FY 2021.
FY 2021 Activities
In FY 2021, the CDFI Fund completed the FY 2020 round of the CMF and also opened the FY 2021
round, the seventh round in the program’s history.
The CDFI Fund opened the FY 2020 round on May 28, 2020, and announced the awards on
February 22, 2021. The demand for CMF awards significantly exceeded the resources available
for the round:
• 137 applicants requested more than $642.2 million in awards.
• 48 applicants received $175.3 13 million in awards.
The 48 FY 2020 award recipients will serve all 50 states, the District of Columbia, and Puerto Rico.
Based on the award recipients’ projections, the FY 2020 round will leverage an estimated $5.3
billion in public and private investment. The award recipients plan to develop nearly 23,000
13
Of the $175.3 million awarded in the FY 2020 CMF Round, $173.8 million was from the CY 2019 GSE allocation and $1.5 million was from
recaptured funds from earlier CMF Award Rounds.
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affordable housing units, which includes more than 20,300 rental units and more than 2,600
homeownership units. Of these:
• 97% of all housing units will be developed for Low-Income families (80% of the Area
Median Income or below);
• 98% of the homeownership units will be developed for Low-Income Families (80% of the
Area Median Income or below); and
• 61% of the rental units will be developed for Very Low-Income and Extremely Low-Income
Families (50% of the Area Median Income or below).
The CDFI Fund opened the FY 2021 round of the CMF on September 9, 2021. The application
round closed on November 9, 2021. The CDFI Fund anticipates announcing up to $380.2 million in
awards in mid-FY 2022.
CAPITAL MAGNET FUND
AM O UNTS REQ UESTED VS AM O UNTS AVAI LABLE
Amount Requested Amount Available
$1,000,000,000
$1,200,000,000
$1,000,000,000
$642,200,000
$609,000,000
$571,900,000
$800,000,000
$540,000,000 $522,000,000
$380,200,000
$600,000,000
$173,800,000
$400,000,000
$142,900,000 $130,900,000
$120,000,000
$200,000,000 $80,000,000 $91,470,000
$-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Capital Magnet Fund Impact
CMF Recipients have two years to commit their CMF Award to specific affordable housing and
economic development projects and five years to complete those projects. Based on reporting
received by the end of FY 2021 14, to date:
• approximately $257.1 million of CMF funding has been committed to projects currently
under development or under construction that are estimated to generate $13.3 billion in
eligible project costs (leverage plus the CMF Award); and
• $167.6 million of CMF funding has been fully disbursed to projects that have been
completed, generating $4.5 billion in eligible project costs (leverage plus the CMF Award).
As of the end of FY 2021, projects committed and under development or under construction by
FY 2016-FY 2020 Award Recipients include:
• rental housing commitments totaling $244.7 million projected to result in over 43,000
eligible units;
• homeownership unit commitments totaling $8.1 million projected to result in 224 eligible
units; and
• economic development commitments totaling $4.3 million for 10 facilities, such as
community-serving businesses and health care and other community facilities.
As of the end of FY 2021, FY 2016 - FY 2020 Award Recipients have projected that:
• 62% of the housing rental units will be affordable for Very Low-Income and Extremely
Low-Income persons (50% of the Area Median Income or below);
• 94% of the homeownership units will be affordable for Low-Income persons (80% of the
Area Median Income or below); and
• 73% of units will be located in Areas of Economic Distress.
These projects are expected to leverage $13.0 billion, including $9.7 billion in private capital.
As of the end of FY 2021, projects completed by FY 2016 - FY 2020 Award Recipients include:
14
FY 2020 Awards were announced on February 22, 2021. The FY 2020 Award Recipients did not yet begin reporting during FY 2021.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
• rental housing disbursements totaling approximately $138.9 million to finance or support
20,700 eligible units;
• homeownership disbursements totaling $27.5 million to finance over 4,200 eligible units;
and
• economic development disbursements totaling $1.2 million for five facilities, such as
community-serving businesses and health care and other community facilities.
These projects have leveraged $4.3 billion, including $3.8 billion in private capital.
Award recipients from FY 2016 and later reported that:
• 68% of the rental units have been developed for Very Low-Income and Extremely Low-
Income persons (50% of the Area Median Income or below);
• 92% of the homeownership units have been affordable for Low-Income persons (80% of
the Area Median Income or below); and
• 60% of all units are located in Areas of Economic Distress.
FY 2010 round projects included:
• 13,316 affordable homes—including 11,700 affordable rental homes and 1,616
affordable homeowner-occupied homes—that were completed and maintained their
affordability standards; and
• 20 facilities, such as community-serving businesses and health care and other community
facilities, that were completed.
CDFI Bond Guarantee Program
Enacted through the Small Business Jobs Act of 2010, the Community Development Financial
Institutions Bond Guarantee Program (CDFI Bond Guarantee Program) responds to the critical
market demand for long-term, low-cost capital that can be used to spur economic growth in low-
income communities.
How it Works
Purpose
The CDFI Bond Guarantee Program accelerates the economic revitalization of low-income
communities by giving CDFIs access to a significant source of long-term capital.
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Unlike other CDFI Fund programs, the CDFI Bond Guarantee Program does not offer grants.
Instead, it is a federal credit program, designed to function at no cost to taxpayers. The bonds are
debt instruments that must be repaid.
Through the CDFI Bond Guarantee Program, the CDFI Fund enables Qualified Issuers to issue
bonds that have maturity dates of up to 29.5 years and are fully guaranteed by the federal
government. The Qualified Issuer then sells the bonds to the Federal Financing Bank (FFB) 15 and
uses the bond proceeds to make long-term loans at affordable rates to CDFIs to finance or
refinance new or existing community development projects.
Award Process
To be considered a Qualified Issuer, an organization must:
• be a Certified CDFI or its designee;
• be able to issue bonds and make loans; and
• demonstrate the capacity to perform specialized administrative functions, including loan
servicing and financial reporting.
During the application round, a Qualified Issuer applies to the CDFI Fund for authorization to
issue bonds on behalf of CDFIs. Each bond issue is currently required to be a minimum of $100.0
million. CDFIs have the opportunity to borrow long-term capital from the FFB for large-scale
community development projects, including but not limited to the development of small
businesses, commercial real estate, housing units, charter schools, day care or health care
centers, and rural infrastructure.
In addition, CDFIs may use the capital to extend credit to other community development
borrowers or to refinance existing loans at affordable interest rates.
Awards since Inception
Since the inception of the CDFI Bond Guarantee Program in 2010, the CDFI Fund has completed
nine rounds of the program and has guaranteed nearly $1.7 billion in bonds. CDFIs have up to five
years to deploy committed funds. Of the nearly $1.7 billion guaranteed to date, participating
CDFIs have deployed approximately $1.3 billion in loans.
FY 2021 Activities
The FY 2021 round opened on March 3, 2021, with up to $500.0 million in bond guarantee
authority available to CDFIs. The application period closed on May 3, 2021. A total of $575.0
million was requested from the applications received. The CDI Fund announced the approval of a
15
The Federal Financing Bank (the Bank) is a government corporation under the general supervision and direction of the Secretary of the Treasury.
The Congress created the Bank in 1973, at the request of the U.S. Department of the Treasury (Treasury). The Bank borrows from Treasury and
lends to Federal agencies and to private entities that have Federal guarantees.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
$100.0 million bond issuance on September 30, 2021.
CDFI BOND GUARANTEE PROGRAM
G UARANTEE AM O UNTS REQ UESTED VS G UARANTEE
AM O UNTS O BLI G ATED
$825,000,000
Guarantee Amounts Requested Guarantee Amounts Obligated
$900,000,000
$652,000,000
$800,000,000
$575,000,000
$542,000,000
$700,000,000
$475,000,000
$432,000,000
$415,000,000
$600,000,000
$325,000,000 $327,000,000 $330,000,000
$500,000,000
$265,000,000
$250,000,000
$245,000,000
$400,000,000
$200,000,000
$300,000,000
$150,000,000
$100,000,000 $100,000,000 $100,000,000
$200,000,000
$100,000,000
$-
2013 2014 2015 2016 2017 2018 2019 2020 2021
CDFI Bond Guarantee Program Impact
The CDFI Bond Guarantee Program has provided long-term, fixed-rate capital for a wide range of
projects in low-income urban, rural, and Native communities throughout the nation.
CDFI Bond Guarantee Program
Disbursements by Asset Class as of September 30, 2021
Since Inception Geography
Proposed Disbursements (Based on YTD
Asset Class Disbursements
($millions) Disbursements)
($millions)
AZ, CA, CO, CT, DC, FL, GA,
Charter Schools $364.9 $438.4 HI, IL, MD, MI, MN, NJ,
NM, NY, OH, PA
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The content on this page is unaudited. Please see the accompanying auditor’s report.
AL, AZ, CA, DC, FL, GA, IL,
KY, LA, MA, MD, MO, MN,
Rental Housing $369.3 $473.9 NC, NJ, NM, NV, NY, OH,
OR, PA, TN, TX, WI, WV,
UT
AZ, CA, IL, LA, MA, MI, NJ,
Commercial Real Estate $263.7 $285.7
NC, NV, NY, OK, OR, PA
CDFI to Financing Entity $115.2 $136.7 KY, MA, NJ, NM
Health Care Facilities $74.2 $111.3 CA, DC, IL, KY, NC, NY, WI
Not-for-Profit AZ, CA, FL, MA, MI, NM,
$65.2 $86.6
Organizations NJ, NV, NY, PA, TN
Senior Living and Long
$20.3 $68.0 CA
Term Care
AZ, CA, KY, NJ, FL, PA, CO,
Small Business $51.2 $61.2
MA, NV
Day Care Centers $13.0 $30.0 KY, NM, NY
Totals $1,337.0 $1,692.0
CDFI Program
The Community Development Financial Institutions Program (CDFI Program) was created in 1994.
It invests in and builds the capacity of CDFIs, empowering them to grow, to achieve
organizational sustainability, and to contribute to the revitalization of their communities.
How it Works
Purpose
The purpose of the CDFI Program is to increase the capacity of CDFIs to serve low-income people
and underserved communities. The program has two primary components:
• Financial Assistance (FA) awards – Monetary awards provided to support the financing
activities of CDFIs
• Technical Assistance (TA) awards – Grants provided to support the capacity-building
activities of CDFIs
Award Process – Financial Assistance Awards
There are two types of applicants for FA awards: Core (established CDFIs) and SECA (small and
emerging CDFIs).
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The content on this page is unaudited. Please see the accompanying auditor’s report.
To be eligible for an FA award, an organization must be a Certified CDFI. In addition, an
organization must demonstrate that it has the financial and managerial capacity to make a
significant impact in the communities it serves. To demonstrate this, it must meet the following
four criteria:
1. Be able to provide affordable and appropriate financial products and services
2. Be a viable financial institution
3. Be able to use an FA award effectively
4. Have the ability to leverage its awards with non-federal funding
The primary FA award type is the Base Financial Assistance (Base-FA) award. Base-FA awards of
up to $1.0 million allow CDFIs to sustain and expand their financial products and services. CDFIs
may use Base-FA awards for a wide range of purposes—for example, to finance businesses and to
develop affordable housing, commercial real estate, and community facilities; to support
community-based social service organizations; and to provide mortgages, basic banking services,
and financial literacy training to people in underserved communities.
Base-FA awards to Core applicants require the award recipient to secure a dollar-for-dollar match
of non-federal funds. The form of the matching funds determines the form of the Base-FA award;
the match may be in the form of loans, grants, equity investments, secondary capital, and
deposits. The match requirement enables CDFIs to multiply the impact of federal investment to
meet the demand for affordable financial products in the communities they serve.
Base-FA awards to SECA applicants are made in the form of grants, and although they also
include a matching requirement, Congress typically waives this requirement in the annual
appropriations.
In addition, the following award types are provided as a supplement to the Base-FA award:
• HFFI-FA Awards – In FY 2011, the CDFI Fund launched the Healthy Food Financing
Initiative (HFFI), and through the CDFI Program, it provides Healthy Food Financing
Initiative-Financial Assistance (HFFI-FA) awards to support a wide range of activities that
expand access to healthy foods in low-income communities.
CDFIs that are selected to receive a Base-FA award through the CDFI Program are also
eligible to receive an HFFI-FA award. The CDFI must submit a separate application for an
HFFI-FA award.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
HFFI-FA awards are made in the form of grants, and although they include a matching
funds requirement, Congress has regularly waived this requirement in its annual
appropriations measures.
HFFI-FA awards can be used to make loans and investments and to provide development
services that promote and increase access to healthy food options in low-income
communities. Award recipients often use the funds to increase retail access to healthy
foods, to develop and equip grocery stores, and to strengthen producer-to-consumer
relationships.
• DF-FA Awards – In FY 2018, the CDFI Fund began making Disability Funds-Financial
Assistance (DF-FA) awards to provide technical and financial assistance to CDFIs that fund
projects to help individuals with disabilities.
To be eligible for a DF-FA award, a CDFI must be selected to receive a Base-FA award and
must submit a separate DF-FA award application.
An applicant must have a demonstrated track record of serving individuals with
disabilities, specifically by providing financial products and services and/or development
services that have a primary purpose of benefiting individuals with disabilities.
• PPC-FA Awards – The Consolidated Appropriations Act of 2019 and 2020 required that
10% of the funds awarded by the CDFI Fund under the appropriation “shall be used for
awards that support investments that serve populations living in persistent poverty
counties.” Persistent Poverty Counties (PPCs) are defined as counties where 20% or more
of the population has lived in poverty over the past 30 years.
To be eligible for a Persistent Poverty County-Financial Assistance (PPC-FA) award, a CDFI
must submit a Base-FA award application, indicate in that application its interest in
applying for a PPC-FA award, and demonstrate a track record of serving PPCs and the
ability to deploy the award in an Eligible Market in a PPC.
Award Process - Technical Assistance Awards
To be eligible for a TA award, an organization must be a Certified or Emerging CDFI. Emerging
CDFIs must demonstrate that they have the ability to become certified within three years of
receiving a TA award.
TA awards of up to $125,000 are made in the form of grants and do not have a matching funds
requirement. Award recipients can use the awards to purchase equipment, to hire consulting or
contracting services, to pay salaries and benefits, to train staff or board members, and to support
other capacity-building activities.
TA award recipients often use the funds to analyze their target markets, to develop lending
policies and procedures, and to build staff lending capacity. More established CDFIs also use TA
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grants to serve current target markets in new ways or to enhance the efficiency of their
operations.
Awards since Inception
Since the inception of the CDFI Program in 1994, the CDFI Fund has completed 25 rounds of the
program and has awarded FA awards and TA awards totaling more than $2.6 billion. 16
In addition, since inception the CDFI Fund has awarded 120 HFFI-FA awards totaling more than
$223.3 million and 48 DF-FA awards totaling $11.9 million.
FY 2021 Activities
The CDFI Fund opened the FY 2021 award round of the CDFI Program on February 18, 2021. The
FY 2021 application period closed on May 3, 2021. The CDFI Fund announced the FY 2021 TA
awards on September 16, 2021, and announced the FY 2021 FA awards on December 8, 2021.
The demand for awards significantly exceeded the resources available for the awards:
• 420 organizations requested $366.1 million in CDFI Program Base-FA awards.
• 205 organizations requested $25.5 million in TA awards; 174 organizations received more
than $21.6 million in TA awards.
The demand for HFFI-FA, DF-FA, and PPC-FA awards also exceeded the supply of resources:
• 189 organizations requested $56.2 million in PPC-FA awards.
• 24 organizations requested $10.9 million in DF-FA awards (CDFI Program and NACA
Program combined).
• 26 organizations requested $76.6 million in HFFI-FA awards (CDFI Program and NACA
Program combined).
16
The FY 2021 round of the CDFI Program is the 26th round of the program. On September 16, 2021, the CDFI Fund
announced TA awards totaling $21.6 million for the FY 2021 round of the program and announced the FA awards for
the FY 2021 round on December 8, 2021.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
CDFI PROGRAM FINANCIAL ASSISTANCE (SECA & CORE)
AMOUNTS REQUESTED VS AMOUNTS AVAILABLE
Amount Requested Amount Available
$560,000,000
$547,000,000
$600,000,000
$429,000,000
$500,000,000
$396,000,000
$383,000,000
$367,000,000 $363,490,000 $366,100,000
$337,900,000
$326,600,000
$400,000,000
$300,000,000
$166,000,000 $160,600,000
$158,000,000 $157,000,000
$149,000,000 $147,000,000 $144,000,000
$132,000,000 $127,000,000 $119,500,000
$200,000,000
$100,000,000
$-
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CDFI Program Impact
In FY 2021, CDFI Program award recipients reported originating loans or investments totaling
more than $38.7 billion, based on their portfolio of activities in 2020. This includes, but is not
limited to:
• $12.0 billion for consumer loans;
• $10.7 billion for home improvement and home purchase loans;
• $8.1 billion for business and microenterprise loans; and
• $3.2 billion for residential real estate transactions.
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In addition, recipients financed nearly 50,000 affordable housing units.
The FY 2021 performance results reported in the table below reflect program outcomes and
activities for 2020 and are based on information entered into the CDFI Fund’s performance
reporting system by CDFI Program award recipients.
Annual Performance Report of CDFI Program Award Recipients for FY 2021
(Based on Program Activities Reported in 2021)
Lending and Investing Activity Amount
Amount of Total Loans/Investments Originated $38,750,456,895
Number of Total Loans/Investments Originated 4,073,971
Business and Microenterprise Originations $8,104,955,913
Number of Originations 162,939
Consumer Originations $12,019,016,823
Number of Originations 3,817,016
Home Improvement and Home Purchase Originations $10,676,113,883
Number of Originations 77,824
Residential Real Estate Originations $3,221,404,141
Number of Originations 6,549
Commercial Real Estate Originations $3,879,122,506
Number of Originations 5,347
All Other Originations $849,843,629
Number of Originations 4,296
Affordable Housing Units Financed 49,766
Rental Units 43,850
Owner Units 5,916
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Businesses Financed 124,773
CDFI Program cumulative impact data is reported in the table below for FY 2010 to FY 2021 based
on recipients’ activities in 2009 to 2020.
Cumulative Performance Report of CDFI Program Award Recipients for FYs 2010 to 2021
(Based on Program Activities Reported from 2009 to 2020)
Lending and Investing Activity (includes late reporters not included in FY2020 AFR) Amount
Amount of Total Loans/Investments Originated $127,675,514,945
Number of Total Loans/Investments Originated 13,632,714
Business and Microenterprise Originations $23,501,024,049
Number of Originations 601,844
Consumer Originations $40,579,588,473
Number of Originations 12,654,661
Home Improvement and Home Purchase Originations $30,738,385,242
Number of Originations 279,911
Residential Real Estate Originations $14,306,260,991
Number of Originations 29,902
Commercial Real Estate Originations $14,400,097,145
Number of Originations 20,990
All Other Originations $4,150,159,045
Number of Originations 45,406
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Affordable Housing Units Financed 371,631
Rental Units 340,089
Owner Units 31,542
Businesses Financed 470,460
HFFI-FA Program Impact
Since the inception of the HFFI-FA program in 2011, HFFI-FA award recipients have reported
healthy food investments totaling more than $301.6 million. There were retail investments
totaling more than $239.2 million that developed nearly 4.0 million square feet of new retail
space for projects ranging from small green grocers to large supermarkets which served low-
income, low-access census tracts. In addition, there were non-retail investments totaling more
than $60.5 million in projects involving production and distribution, which developed more than
7.0 million square feet of space for eligible healthy food activities. The HFFI Program’s cumulative
impact is derived from transactional reports by HFFI recipients.
HFFI-FA Program Cumulative Performance Report of Award Recipients for FY 2021
(Based on Program Activities Reported from 2012 to 2020)
Amount of Total Loans/Investments Originated $301,618,796
Number of Total Loans/Investments Originated 569
Number of Projects 409
Number of Award Recipients Reported 42
HFFI Retail Investments
Amount of Retail Loans/Investments $239,227,997
Number of Retail Loans/Investments 305
HFFI Non-Retail Investments
Amount of Non-Retail Loans/Investments $60,510,799
Number of Non-Retail Loans/Investments 262
HFFI Square Footage - Project Level
Square Footage of New Retail Healthy Food Outlets 3,976,301
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Square Footage of New Non-Retail Healthy Food Outlets 7,003,361
CDFI Rapid Response Program
The CDFI Rapid Response Program (CDFI RRP) was established in FY 2021 to help CDFIs deliver
emergency support to distressed and underserved communities suffering from the economic
hardships created by the COVID-19 pandemic.
How It Works
Purpose
The Consolidated Appropriations Act, 2021, (P.L. 116-260) provided more than $1.2 billion for the
CDFI Fund to use to provide grants to enable Certified CDFIs “to support, prepare for, and
respond to the economic impact of the coronavirus.” The CDFI Fund awards these grants to
Certified CDFIs through the CDFI RRP.
The CDFI RRP differs from the CDFI Fund’s other funding programs in two important ways.
First, unlike the CDFI Fund’s other programs, the CDFI RRP consists of a single, short application
round. The first and only application round of the CDFI RRP was conducted in FY 2021. Further
CDFI RRP application rounds will not be conducted unless Congress provides additional funding
for the program.
Second, while the CDFI Fund’s other programs are competitive award programs in which the
number of organizations that receive awards is far less than the number that applies, the CDFI
RRP is a formula-based grant program designed to provide awards to all eligible applicants.
Award Process
All CDFI RRP awards were made in the form of a grant. The minimum grant amount is $200,000,
and the maximum amount is $1.8 million. The legislation authorizing the program stipulated that
at least $25.0 million of the more than $1.2 billion awarded through the program be used to
benefit Native Communities.
Only organizations that the CDFI Fund has certified as CDFIs are eligible to apply. An applicant
may request the minimum award amount of $200,000 or up to 150% of its Total Financial
Products Closed in an Eligible Market and/or Target Market for its most recent historic fiscal year,
whichever is greater.
CDFIs may use CDFI RRP grant funds for five categories of eligible activities supporting the
provision of financial products and services: Financial Products, Financial Services, Loan Loss
Reserves, Development Services, and Capital Reserves.
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In addition, CDFIs may use the greater of $200,000 or 15% of the grant for seven categories of
eligible activities supporting operations: Compensation—Personal Services, Compensation—
Fringe Benefits, Professional Service Costs, Travel Costs, Training and Education Costs,
Equipment, and Supplies.
CDFIs may use the grants to support a variety of eligible lines of business: Commercial Real
Estate, Small Business, Microenterprise, Community Facilities, Consumer Financial Products,
Consumer Financial Services, Commercial Financial Services, Commercial Financial Products,
Affordable Housing, and Intermediary Lending to Nonprofits and CDFIs.
In conducting the application review process for the CDFI RRP, the CDFI Fund implemented the
language of the Consolidated Appropriations Act, 2021, authorizing the CDFI Fund to make grants
to CDFIs using “a formula approach that takes into account criteria such as certification status,
financial and compliance performance, portfolio and balance sheet strength, a diversity of CDFI
business model types, and program capacity.”
Awards since Inception
The FY 2021 round of the CDFI RRP was the first and only round of the program. The CDFI Fund
awarded more than $1.2 billion in grants to 863 organizations.
FY 2021 Activities
Well aware of the urgent need for financial support for CDFIs and their communities during the
pandemic, the CDFI Fund was committed to deploying FY 2021 CDFI RRP funds as quickly as
possible. To that end, the CDFI Fund took the following steps to expedite and streamline the
application and review process:
• The CDFI Fund opened the application round for the CDFI RRP for only one month. (The
application rounds for other CDFI Programs typically remain open for two months or
longer.)
• To simplify the CDFI RRP application process, the CDFI Fund designed the application to be
familiar to organizations that have applied for CDFI Program or NACA Program awards.
The CDFI RRP application was more streamlined, collecting a targeted subset of the
information required for the CDFI Program and NACA Program applications.
• Because of the streamlined application and expedited review process, the CDFI Fund was
able to announce the awards less than three months after the application round closed.
(The award announcements for other CDFI Fund programs typically take place five or
more months after the application rounds close.) To expedite the review process, the CDFI
Fund leveraged its existing CDFI Program Financial Assistance and Technical Assistance
Application evaluation processes as well as its existing information technology
infrastructure.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
The application round for the FY 2021 CDFI RRP opened on February 25, 2021, in compliance with
a statutory requirement, and closed on March 25, 2021.
On June 15, 2021, Vice President Kamala Harris and Treasury Secretary Janet L. Yellen announced
the awards in a ceremony at the White House. The FY 2021 round of the CDFI RPP provided
awards totaling more than $1.2 billion to 863 Certified CDFIs located in 48 states, the District of
Columbia, Guam, and Puerto Rico.
All four of the basic types of CDFIs received awards:
• 463 loan funds received $571.3 million in awards.
• 244 credit unions received $401.8 million in awards.
• 149 banking entities received $267.1 million in awards.
• Seven venture capital funds received $9.4 million in awards.
Program Impact
All CDFIs that receive funds through the CDFI RRP are required to deploy their grants within two
fiscal years and to report annually on how they have used the funds. CDFIs that request more
than the minimum award amount ($200,000) have an additional performance goal related to
financial products closed during the two-year period of performance.
Because the FY 2021 CDFI RRP awards were just announced in June 2021, the award recipients
have not begun to report to the CDFI Fund about the impact of the grants.
However, data about the organizations that received awards offer some insight into the potential
impact of the CDFI RRP. For example, the data show that the program will serve diverse,
underserved communities:
• 58 organizations that committed to direct their awards to investments in Native
American, Native Alaska, and Native Hawaiian communities received a total of $54.6
million in awards.
• 28 organizations that primarily serve Puerto Rico received $47.3 million in awards.
• 90 minority depository institutions received $133.9 million in awards.
Moreover, the data show that the CDFI RRP will reach a wide variety of low-income communities
across the United States:
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• 339 organizations that serve major urban areas received $478.7 million in awards.
• 277 organizations that serve small urban areas received $414.2 million in awards.
• 245 organizations that serve rural areas received $353.0 million in awards.
Economic Mobility Corps
Launched in FY 2020, the Economic Mobility Corps (EMC) is a joint initiative of the CDFI Fund and
AmeriCorps that places full-time national service members in Certified CDFIs to enhance their
capacity to provide financial literacy, financial planning, budgeting, saving, and other financial
counseling activities.
How It Works
Purpose
Providing access to credit and capital in distressed communities requires the presence of a
dedicated team with the ability to deliver a wide range of financial education services. EMC is a
new national service program that provides grants to place AmeriCorps national service members
in Certified CDFIs to support their financial education programs.
Grant funding was made available to fund AmeriCorps service members for a two-year term of
service. After receiving training in the principles of financial counseling and financial literacy,
members help CDFIs promote, market, and deliver a variety of financial counseling and financial
planning programs.
Members who work full-time also receive living allowances and are eligible to earn a Segal
AmeriCorps Education Award from the National Service Trust, which they can use to pay for
higher education expenses or to apply to qualified student loans.
The creation of EMC was authorized by the Consolidated Appropriations Act, 2020 (P.L. 116-93),
which provided $2.0 million in funding to support the first funding round of the program. An
additional $556,416 in funds appropriated to AmeriCorps by the American Rescue Plan Act of
2021 (P.L. 117-2) was used to support the FY 2021 round of the program.
Award Process
An organization is not required to be a Certified CDFI to apply for an EMC award. However, award
recipients are required to use their EMC awards to fund the placement of AmeriCorps service
members in Certified CDFIs.
Any organization that meets AmeriCorps' State and National Direct Grant program eligibility
criteria can apply for an EMC award. These organizations include CDFIs and other financial
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institutions as well as Indian Tribes, institutions of higher learning, state and local governments,
and nonprofit organizations.
Preference is given to EMC applicants that intend to enroll veterans as AmeriCorps members and
applicants that plan to serve rural areas.
An organization can apply to EMC either as a Single-State Applicant or as a National Direct
Applicant, if it intends to place AmeriCorps service members at CDFIs in more than one state.
Organizations that apply for and receive EMC funds must comply with all AmeriCorps State and
National Direct Program guidelines.
Awards since Inception
The FY 2021 funding round of the EMC was the inaugural round of the program. More than $2.5
million in grants were awarded to three organizations.
FY 2021 Activities
The CDFI Fund and AmeriCorps opened the inaugural application round of EMC on October 5,
2020, and closed the round on January 6, 2021.
The CDFI Fund and AmeriCorps hosted two live webinars to provide CDFIs and other community
development organizations with information on EMC and the application process. The webinars
took place on October 29, 2020, and November 5, 2020. Recordings of these webinars were
posted on the CDFI Fund’s website.
On August 11, 2021, the CDFI Fund and AmeriCorps announced the awards for the inaugural
round. Three Certified CDFIs were chosen to receive a total of approximately $1.3 million in grant
funding each year for two years. Over the two-year period, the program will provide more than
$2.5 million to sustain the placement of 78 AmeriCorps members each year.
The three Certified CDFIs selected for awards were:
• LiftFund Inc., San Antonio, Texas, which was awarded $113,452 per year to support seven
service members;
• Local Initiatives Support Corporation, New York, N.Y., which was awarded $992,800 per
year to support 61 service members; and
• Neighborhood Housing Services of South Florida Inc., Miami, Fla., which was awarded
$171,956 per year to support 10 service members.
Of the 78 AmeriCorps members that will be placed in Certified CDFIs, 10 (or 12.8% of all service
members placed) will be serving in PPCs.
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Program Impact
The FY 2021 funding round of the Economic Mobility Corps awards will enable the three Certified
CDFIs that received awards to add 78 AmeriCorps service members who will support the CDFIs’
efforts to provide financial literacy, financial planning, budgeting, saving, and other financial
counseling activities in underserved areas.
Because the inaugural round of EMC awards was just announced in August 2021, the award
recipients have not yet reported about the impact of the grants. The CDFI Fund and AmeriCorps
will provide detailed information about the impact of the Economic Mobility Corps when the
information becomes available.
Native Initiatives
The Native Initiatives was launched in 2001 to help Native Communities—defined as Native
American, Alaska Native, and Native Hawaiian communities—grow by increasing their access to
credit, capital, and financial services.
How it Works
Purpose
The origin of the Native Initiatives dates back to the Riegle Act, when Congress mandated,
through the CDFI Fund's authorizing statute, a study on lending and investment practices in
Native Communities. The CDFI Fund conducted the study from 1999 to 2000 and published the
Native American Lending Study in 2001.
The study reported that Native Communities face a number of unique challenges to economic
growth, including higher barriers to accessing capital and basic financial services and increased
difficulty interacting with private and public sector programs. The study affirmed the importance
of developing Native CDFIs—CDFIs that specialize in serving Native Communities—to play a key
role in the broader effort to lead Native Communities into the nation’s economic mainstream.
The study led to the formation of the CDFI Fund’s Native Initiatives. The program’s purpose is to
generate economic opportunity in Native Communities by supporting the creation and expansion
of Native CDFIs through the Native American CDFI Assistance Program (NACA Program).
The NACA Program is very similar to the CDFI Program. Like the CDFI Program, it provides
Financial Assistance (Base-FA) awards, Healthy Food Financing Initiative-Financial Assistance
(HFFI-FA) awards, Persistent Poverty Counties-Financial Assistance (PPC-FA) awards, Disability
Funds-Financial Assistance (DF-FA) awards, and Technical Assistance (TA) awards. However, the
NACA Program focuses solely on supporting Native CDFIs.
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By building and strengthening Native CDFIs, the NACA Program helps these community-based
organizations increase access to credit, capital, and financial services in their communities, which
in turn creates jobs, develops affordable housing, and provides opportunities for Native
American, Alaska Native, and Native Hawaiian people to obtain appropriate financial services and
counseling.
Award Process
The NACA Program has similar award components to the CDFI Program, but with an exclusive
focus on Native CDFIs. An overview of the award types may be found in the CDFI Program
discussion. Details specific to the NACA Program’s FA and TA awards are described below.
FA Awards: To be eligible for a Base-FA award through the NACA Program, an organization must
be a Certified CDFI. It also must have a Target Market of a Native Community and must ensure
that at least 50% of its activities serve Native American, Alaska Native, and/or Native Hawaiian
communities.
The Indian Community Economic Enhancement Act of 2020 (P.L. 116-261) permanently waived
the Matching Funds requirement for Native American CDFIs, and, as a result, Native American
CDFI FA Applicants are not required to provide matching funds.
TA Awards: Three types of organizations are eligible to apply for a TA award through the NACA
Program: Certified Native CDFIs, Emerging Native CDFIs, and Sponsoring Entities (organizations
primarily serving Native Communities that propose to create a separate Certified CDFI). Emerging
Native CDFIs must demonstrate the ability to become a Certified Native CDFI within three years
of receiving a TA grant. Sponsoring Entities must demonstrate the ability to create a new entity
that will become a Certified Native CDFI within four years of receiving an award.
Awards since Inception
Since the inception of the NACA Program in 2001, the CDFI Fund has completed 18 rounds of the
program and has provided FA and TA awards totaling more than $205.8 million, which includes
PPC-FA awards totaling $7.3 million. 17
FY 2021 Activities
The CDFI Fund opened the FY 2021 award round of the NACA Program on February 18, 2021. The
application period closed on May 3, 2021. The CDFI Fund announced the FY 2021 TA awards on
September 16, 2021, and announced the FY 2021 FA awards on December 8, 2021.
The demand for awards significantly exceeded the resources available for the awards:
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The FY 2021 round of the NACA Program is the 19th round of the program. On September 16, 2021, the CDFI Fund
announced TA awards totaling $2.5 million for the FY 2021 round of the program and announced the FA awards for
the FY 2021 round on December 8, 2021.
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• For the FY 2021 Base-FA awards 27 organizations requested $22.8 million in NACA
Program Base-FA awards.
• For the FY 2021 TA awards 22 organizations requested $3.3 million in NACA Program TA
awards; 17 organizations received $2.5 million.
• For the FY 2021 FA supplemental awards, 15 organizations requested $3.9 million in NACA
PPC-FA awards.
NACA Program Impact
Since the NACA Program was launched in 2001, the CDFI Fund has provided more than $205.8
million in FA and TA awards through the program. Those funds have helped build a nationwide
network of Certified Native CDFIs:
• In 2001, the number of Certified Native CDFIs totaled 14.
• As of the end of FY 2020, the number of Certified Native CDFIs totaled 70.
The performance results reported by NACA Program award recipients in FY 2021 show that
Native CDFIs originated more than 7,000 loans or investments totaling $116.3 million, based on
their portfolio of activities in 2020, including $39.9 million in business and microenterprise loans,
$31.1 million in home improvement and home purchase loans, and $35.9 million in consumer
loans.
The Native Initiatives is generating economic opportunity and fostering economic self-
determination in Native Communities nationwide. The table below demonstrates the cumulative
impact of NACA recipient activities from FY 2010 to FY 2021.
Cumulative Performance Report of NACA Program Award Recipients for FYs 2010 to 2021
(Based on Program Activities Reported from 2009 to 2020)
Lending and Investing Activity (includes late reporters not included in FY2020 AFR) Amount
Amount of Total Loans/Investments Originated $1,615,481,222
Number of Total Loans/Investments Originated 52,644
Business and Microenterprise Originations $443,236,564
Number of Originations 3,131
Consumer Originations $161,055,770
Number of Originations 39,220
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Home Improvement and Home Purchase Originations $806,422,241
Number of Originations 6,017
Residential Real Estate Originations $12,105,453
Number of Originations 73
Commercial Real Estate Originations $17,162,706
Number of Originations 45
All Other Originations $175,498,488
Number of Originations 4,158
Affordable Housing Units Financed 154
Rental Units 131
Owner Units 23
Businesses Financed 2,496
New Markets Tax Credit Program
The New Markets Tax Credit Program (NMTC Program) was established by Congress in 2000 to
attract private investment to underserved communities by offering a tax credit to investors.
How it Works
Purpose
One of the most significant obstacles to economic development in low-income communities is
the lack of access to private investment capital. The NMTC Program is designed to attract new
private investment to qualifying businesses located in Low-Income Communities (generally
defined as population census tracts with at least 20% poverty or 80% or less of the median family
income) or businesses that are owned by, employ, or serve Targeted Populations.
The NMTC Program attracts private investment by permitting individual and corporate investors
to receive a tax credit against their federal income tax in exchange for making Qualified Equity
Investments (QEIs) in specialized financial intermediaries called Community Development Entities
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The content on this page is unaudited. Please see the accompanying auditor’s report.
(CDEs). The credit totals 39% of the original investment amount; the investor claims the credit
over a period of seven years.
Congress authorized the NMTC Program under the Community Renewal Tax Relief Act of 2000
(P.L. 106-554), which included $15.0 billion in allocation authority for seven years. Since then, the
NMTC Program has been reauthorized eight times. Most recently, the Taxpayer Certainty and
Disaster Tax Relief Act of 2020 (P.L. 116-260) extended authorization of the program for calendar
year (CY) 2021 to CY 2025 with $5.0 billion in annual NMTC allocation authority.
Award Process
The CDFI Fund allocates tax credits to Certified CDEs through a competitive application process. If
successful, the CDE has five years to offer the tax credits to investors in exchange for QEIs.
A CDE has 12 months to invest “substantially all” of the proceeds from the QEIs into Qualified
Low Income Community Investments (QLICIs). The proceeds must be used to make loans or
equity investments in qualified businesses or CDEs, to purchase qualifying loans originated by
other CDEs, or to provide financial counseling to businesses located in Low-Income Communities.
Awards since Inception
Since the inception of the NMTC Program in 2000, the CDFI Fund has completed 17 allocation
rounds and has made 1,354 awards totaling $66.0 billion in tax allocation authority. This includes
$3.0 billion in Recovery Act Awards and $1.0 billion of special allocation authority used for the
recovery and redevelopment of the Gulf Opportunity Zone.
FY 2021 Activities
In FY 2021, the CDFI Fund completed the CY 2020 round of the NMTC Program.
The CDFI Fund opened the CY 2020 round on September 23, 2020, and announced the awards on
September 1, 2021. The demand for NMTC allocation authority significantly exceeded the tax
credits available during the round:
• 208 CDEs submitted applications requesting $15.1 billion in tax credit allocation authority.
• 100 CDEs received $5.0 billion in tax credit allocation authority.
The 100 award recipients are headquartered in 34 states and the District of Columbia. It is
estimated that these award recipients will make more than $967.5 million in NMTC investments
in nonmetropolitan counties.
The CDFI Fund anticipates opening the CY 2021 round of the NMTC Program in November 2021
and announcing CY 2021 allocation awards in summer 2022.
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NEW MARKETS TAX CREDIT PROGRAM
AM O UNTS REQ UESTED VS AM O UNTS AVAI LABLE
Amount Requested Amount Allocated
$26,700,000,000
$25,900,000,000
$30,000,000,000
$23,500,000,000
$21,900,000,000
$19,900,000,000
$25,000,000,000
$17,600,000,000
$16,200,000,000
$14,800,000,000 $15,100,000,000
$20,000,000,000
$14,700,000,000
$15,000,000,000
$7,000,000,000
$10,000,000,000
$5,000,000,000
$3,500,000,000 $3,500,000,000 $3,500,000,000 $3,500,000,000 $3,500,000,000 $3,500,000,000 $3,500,000,000 $3,500,000,000
$5,000,000,000
$-
2010 2011 2012 2013 2014 2015/2016 2017 2018 2019 2020
NMTC Program Impact
The CDFI Fund has awarded a total of $66.0 billion to CDEs through the NMTC Program. As of
September 30, 2021, allocation recipients had reported raising QEIs totaling $59.3 billion.
In FY 2021, allocation recipients reported making more than $3.3 billion in loans and investments
in Qualified Active Low Income Community Investments (QLICIs), as shown in the table below. In
addition, these investments are estimated to have created 12,569 jobs and funded 23,575
construction-related jobs.
Of these investments, 26.1% of the dollars invested were invested in “real estate QALICBs” (i.e.,
businesses that develop or lease real property for use by others), 73.8% of the dollars were
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invested in “non-real estate QALICBs” (i.e., operating businesses) in low-income communities,
and the remaining investments were direct investments into other CDEs. Since the inception of
the NMTC Program, recipients of allocations have reported making more than $60.4 billion in
cumulative qualified low-income community investments, which have created 336,996 jobs and
more than 601,124 construction jobs.
FY 2021 Annual & Cumulative Performance Report of NMTC Program Allocation Recipients
Annual Performance Cumulative Performance
Total Qualified Low-Income Community $3,321,389,386 $60,434,300,480
Investments (QLICI)
Number of QLICI (TOTAL) 1,093 18,003
Real Estate Activity $865,223,777 $27,259,161,958
Number of QLICI (RE) 282 7,173
Non-Real Estate Activity $2,451,463,108 $32,273,403,801
Number of QLICI (NRE) 809 10,563
Loans/Investments Made to Other CDEs $4,702,500 $901,734,721
Number of QLICI (CDE) 2 267
Percent in Distressed Area 77.0% 76.2%
Jobs at Reporting Period End 12,569 336,996
Projected Construction Jobs 23,575 601,124
Affordable Housing Units Financed 1,164 18,714
Owner Units 150 7,091
Rental Units 1,014 11,623
Square Feet of Commercial Real Estate 13,886,550 368,251,476
Office 3,689,539 118,341,047
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Retail 1,480,102 77,127,494
Manufacturing 8,716,909 76,982,935
Businesses Financed 557 9,545
Financial Counseling and Other Services
Total Investments 480,335 49,230,126
Number of Businesses Served 8,453 127,518
The NMTC Program catalyzes investment where investment is needed most. Over 77.0% of NMTC
investments for FY 2020 have been made in highly distressed areas. These are communities with
low median incomes and high rates of unemployment, and the NMTC investments are helping to
transform them into places of opportunity.
Small Dollar Loan Program
The Small Dollar Loan Program (SDL Program) is a newly launched program that helps Certified
CDFIs address the issue of expanding consumer access to mainstream financial institutions and
provides alternatives to high-cost small dollar loans that are prevalent in low-income
communities. The program also helps unbanked and underbanked populations build credit and
access the mainstream financial system.
How it Works
Purpose
The SDL Program was authorized by the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (P.L. 111-203). The CDFI Fund received $5.0 million to support the SDL
Program under the Consolidated Appropriations Act, 2020 (P.L. 116-93) and $8.5 million in the
Consolidated Appropriations Act, 2021 (P.L. 116-260).
The SDL Program provides grants to help Certified CDFIs offer fair and affordable small dollar loan
programs in communities that are underserved by mainstream financial institutions. The SDL
Program statute stipulates that these grants can be used only to support programs offering small
dollar consumer loans that:
• are made in amounts that do not exceed $2,500;
• are repaid in installments;
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• have no prepayment penalty; and
• report the loan payments to at least one of the consumer reporting agencies that compile
and maintain files on consumers on a nationwide basis.
The SDL Program not only provides safe alternatives to high-cost small dollar loans but also helps
unbanked and underbanked borrowers build credit and enter the mainstream financial system by
reporting their loan activity to the credit bureaus.
Award Process
Through the SDL Program, the CDFI Fund provides two types of funding to Certified CDFIs:
1. Grants for Loan Loss Reserves (LLRs) to enable Certified CDFIs to establish a loan loss
reserve fund in order to defray the costs of establishing or maintaining a small dollar loan
program
2. Grants for Technical Assistance (TA) to support a variety of activities to enable Certified
CDFIs to establish and maintain a small dollar loan program. The seven categories of
eligible activities are Compensation—Personal Services, Professional Service Costs, Travel
Costs, Training and Education Costs, Equipment, Supplies, and Development Services.
Grant recipients cannot use SDL Program awards to provide direct loans to consumers.
Eligible applicants may request up to $150,000 for TA awards, $350,000 for LLR awards, and up to
a total of $500,000 for a combination of TA and LLR awards.
Three types of applicants are eligible to apply for SDL Program grants:
• Certified CDFIs
• Partnerships between a Certified CDFI and any Federally Insured Depository Institution
with a primary mission to serve targeted Investment Areas
• Partnerships between two or more Certified CDFIs
All organizations that receive funds through the SDL Program are required to meet various
performance goals and measures within three years after the grants are announced and to report
each year on how they used the funds.
Awards since Inception
The FY 2021 funding round of the SDL Program was the inaugural round of the program. The CDFI
Fund awarded more than $10.8 million in grants to 52 organizations.
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FY 2021 Activities
The CDFI Fund opened the inaugural funding round of the SDL Program on April 28, 2021. The
round closed on June 29, 2021.
Up to $13.5 million in awards was available through the FY 2021 round of the SDL Program. The
CDFI Fund reported that 81 organizations headquartered in 35 states, the District of Columbia,
and Puerto Rico had submitted applications requesting nearly $26.3 million in funding—nearly
double the amount of funding available. Of the 81 applicants:
• five organizations requested nearly $1.6 million in LLR awards;
• 15 organizations requested $2.2 million in TA awards; and
• 61 organizations requested $22.5 million for a combination TA award and LLR award.
In addition, the CDFI Fund reported that the 81 applicants included:
• 43 loan funds
• 26 credit unions
• 12 banks or bank holding companies.
On September 23, 2021, the CDFI Fund announced that it had awarded grants totaling more than
$10.8 million to 52 Certified CDFIs headquartered in 30 states, the District of Columbia, and
Puerto Rico through the FY 2021 round of the SDL Program. Three types of Certified CDFIs
received awards:
• 28 loan funds received awards totaling $5.2 million.
• 13 credit unions received awards totaling $2.8 million.
• 11 banks or bank holding companies received awards totaling $2.8 million.
These award recipients included two organizations headquartered in Puerto Rico that received
$560,000 in awards and five minority depository institutions that received $1.6 million in awards.
Of the 52 SDL Program awards made, 13 awards totaling nearly $3 million—or 28% of the total
funds awarded—were made to CDFIs with headquarters located in Persistent Poverty Counties,
which exceeds the Congressional mandate of 10%.
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Program Impact
The FY 2021 Small Dollar Loan Program awards will enable 52 Certified CDFIs to increase their
capacity to provide fair and affordable loans in their communities and to help unbanked and
underbanked borrowers build their credit.
Organizations that receive funds through the SDL Program are required to deploy their grants
within three years and to report each year on how they have used the funds. Because the FY
2021 round of the SDL Program was the inaugural year of the program and the awards were just
announced in September 2021, the awardees have not begun to report to the CDFI Fund about
the impact of the grants. The CDFI Fund will release that information when it becomes available.
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ADMINISTRATIVE DISCUSSION AND ANALYSIS
The Community Development Financial Institutions Fund
Initiatives to Maximize Performance
In addition to administering the nine programs discussed above, the CDFI Fund in FY 2021
continued four key administrative initiatives to maximize its performance, efficiency, and
program results:
1. Ongoing maintenance and enhancement of the Awards Management Information System
(AMIS)
2. Development of the CDFI Program Assessment and Risk Management Framework (ARM
Framework)
3. Development of revised CDFI Certification Application and data collection devices
4. Enhancement of compliance monitoring and evaluation
Maintenance and Enhancement of AMIS
To optimize the quality of its data, decision-making, user experience, and delivery of program
resources, the CDFI Fund developed AMIS, a cloud-based, enterprise-wide business platform that
supports all CDFI Fund programs through each phase of a program’s life cycle, including
certification, program awards and allocations, data analysis, compliance, and reporting.
Since the launch of AMIS in 2015, the CDFI Fund has integrated the CDFI Program, NACA
Program, BEA Program, NMTC Program, CMF, SDL Program, the CDFI RRP, and the CDFI Bond
Guarantee Program Qualified Issuer and Guarantee applications into AMIS. Award recipient
compliance and performance reporting has been built out into the AMIS platform. AMIS also
supports the Annual Certification and Data Collection Report that Certified CDFIs are required to
submit to maintain their certification status.
Development of the ARM Framework
During FY 2021, the CDFI Fund continued its development of the ARM Framework and is currently
implementing the ARM tools in AMIS.
The ARM Framework is a suite of six tools that the CDFI Fund is using to assess the financial and
programmatic risk of CDFI Program applicants and award recipients, to enhance data-driven
decision-making, and to mitigate post-award compliance reporting risks:
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• The CDFI and NACA Program Application Assessment Tool provides the functionality to
assess and to evaluate the organizational risk of CDFI and NACA Financial Assistance
awards program applicants’ financial portfolio and management capabilities and to
determine how applicants’ proposed activities address financial needs in distressed
communities and underserved populations as part of the five-step application review
process, including award-sizing.
• The Certification Assessment Tool provides the functionality to support the application
review process for new CDFI certification applicants and to monitor the maintenance of
CDFI certification status.
• The Compliance Assessment/Noncompliance Score Card measures the risk of non-
compliance or default for both regulated and unregulated CDFIs that have received
awards by using three metrics to rate and score the risk. The three factors are based on
the award recipient’s compliance with reporting requirements, Performance Goals and
Measures as specified in its Assistance Agreement (including a safety and soundness
check), and Technical issues.
• The CDFI Industry Data Analysis Reporting Tool integrates internal CDFI Fund data from
applicants’ data and award recipients’ transactional and organizational data reports.
These data are used to generate analytical tables and graphical data visualizations to
evaluate how the applicant’s proposed business plans and activities may address market
gaps for distressed communities and underserved populations.
• The Macroeconomic Risk Tool analyzes macroeconomic factors and external data derived
from authoritative public sources to assess markets served or to be served in the
certification application and CDFI Fund programs’ review processes.
• The Direct Loan Component/Portfolio Monitoring Tool provides the functionality to
assess CDFI recipients’ financial risk if they are awarded a direct loan as a match. The tool
also monitors risk within the portfolio and award recipient loan performance for CDFIs
consistent with Treasury’s credit risk measures for CDFIs and Office of Management and
Budget Circular A-129 on Policies for Federal Credit Programs and Non-Tax Receivables.
The full suite of tools will be recalibrated and finalized by the end of FY 2021 and will support the
needs of multiple CDFI Fund business units.
Development of Revised CDFI Certification Application and Data
Collection Devices
The criteria and measurements for certifying organizations as CDFIs have not been updated since
the CDFI Fund was established in 1994. During this time, the CDFI industry has grown and
evolved. In order to ensure that certification criteria support the growth and reach of CDFIs,
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The content on this page is unaudited. Please see the accompanying auditor’s report.
minimize regulatory burden, and foster a diversity of CDFI types, the CDFI Fund began reviewing
its CDFI Certification policies and tests applied to organizations seeking to become recognized as
CDFIs in 2016.
In May 2020, the CDFI Fund released for public comment proposed revisions to the CDFI
Certification Application. The changes proposed to the CDFI Certification Application embody
work the CDFI Fund began in 2016 reviewing CDFI Certification practices. Comments were due to
the CDFI Fund on November 5, 2020; over 500 individual comments were received. The CDFI
Fund anticipates releasing a final version of the CDFI Certification application in calendar year
2022.
To coincide with the revisions outlined in the CDFI Certification Application, the CDFI Fund has
also proposed changes to the Annual Certification and Data Collection Report (ACR), which
Certified CDFIs are required to submit annually to verify that they continue to meet CDFI
Certification requirements. The proposed revisions to the ACR align with changes being proposed
to the CDFI Certification Application. This will ensure that existing CDFIs are being held to the
same review criteria as newly certified CDFIs.
In addition, the CDFI Fund proposed the introduction of a new Certification Transaction Level
Report (CTLR) for Certified CDFIs that are not current CDFI Program or NACA Program FA
Recipients. This will give the CDFI Fund a way to examine the degree to which CDFIs are serving
distressed and underserved populations. The CTLR will create a more data-driven, quantitative
evaluation of Certified CDFIs and CDFI Certification Applicants, and automate key processes.
Together, these three applications and forms—the CDFI Certification Application, ACR, and
CTLR—will provide the CDFI Fund the ability to better track, measure, and adapt to the ever-
evolving CDFI universe. The combined information collected will allow the CDFI Fund to paint a
complete picture of the impact and activity of Certified CDFIs. Having a greater sense of the CDFI
industry will help build awareness, illustrate and evaluate the comprehensive effects of CDFIs in
distressed communities, better assess and target financing gaps and needs, and attract new
sources of capital.
Enhancement of Compliance Monitoring and Evaluation
Compliance monitoring is an essential part of the CDFI Fund’s operations. The CDFI Fund
recognizes the importance of ensuring that each dollar of appropriations it receives is used in
ways that advance the public interest and support the CDFI Fund’s mission.
In FY 2021, the CDFI Fund continued its multi-year effort to enhance monitoring using risk-based
strategies. It also continued to invest time and attention to examining core compliance
monitoring processes for the CDFI Program, NACA Program, NMTC Program, BEA Program, and
CMF Program as well as to developing compliance monitoring processes for the recently funded
CDFI RRP and SDL Program. Although not all of these developments and enhancements will be
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The content on this page is unaudited. Please see the accompanying auditor’s report.
visible to the public, they will improve the experience of our award recipients while allowing the
compliance staff to focus more on compliance analysis.
The CDFI Fund also worked with the Department of the Treasury’s Office of Civil Rights and
Diversity to develop and implement a plan to monitor Award Applicants’ and Recipient’s
compliance with the Treasury regulations implementing Title VI of the Civil Rights Act (Title VI),
set forth in 31 CFR Part 22.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Status of Financial Management
This section includes a description of the CDFI Fund’s financial management system, a
summary of the results of the FY 2021 financial statement audit, a summary of the financial
management initiatives of the CDFI Fund during FY 2021, and a discussion of the CDFI Fund’s
financial position and results of operations during the fiscal year.
Description of the CDFI Fund’s Financial Management System
The CDFI Fund contracts for accounting services through a franchise agreement with the
Bureau of the Fiscal Service (Fiscal) in Parkersburg, West Virginia. While Fiscal maintains the
accounting system relating to the CDFI Fund’s transactions, the CDFI Fund is responsible for
the generation of all source documents and the accuracy of all accounting information.
The CDFI Fund’s financial management system includes the disbursement transactions
maintained by Fiscal in the accounting system, as well as records maintained and procedures
performed by the CDFI Fund’s financial management staff in Treasury’s Office of the Deputy
Chief Financial Officer (DCFO). The CDFI Fund’s Financial Manager and Treasury’s DCFO are
responsible for the administrative control of its funds, budget formulation and execution, and
review and analysis of financial information.
Results of FY 2021 Financial Statement Audit
The FY 2021 audit of the CDFI Fund’s financial statements resulted in an unmodified opinion.
FY 2021 Financial Management Oversight
Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA)
Our FY 2021 Payment Integrity reporting includes information required by the Improper
Payments Information Act of 2002 (IPIA), as amended by Improper Payments Eliminations and
Recovery Act of 2010 (IPERA) and Improper Payments Elimination and Recovery Improvement
Act of 2012 (IPERIA), Executive Order 13520, Reducing Improper Payments and Eliminating
Waste in the Federal Government, Appendix C to OMB Circular A-123, Requirements for
Payment Integrity Improvement and OMB Circular A-136, Financial Reporting
Requirements. During FY 2021, the CDFI Fund performed risk assessments and a payment
recapture audit in accordance with the Treasury IPERIA Guidance and Implementation plan.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Management Responsibilities
CDFI Fund management is responsible for the fair presentation of information contained in the
principal financial statements in conformity with generally accepted accounting principles
(GAAP) in the United States of America. Management is also responsible for the fair
presentation of the CDFI Fund’s performance measures in accordance with the Office of
Management and Budget requirements. The quality of the CDFI Fund’s internal control
structure rests with management, as does the responsibility for identification of and compliance
with applicable laws and regulations.
Analysis of Financial Position and Results of Operations
Summarized Financial Data
(Dollar amounts in millions)
FY 2021 FY 2020 Increase / (Decrease)
Total Assets $4,243.3 $1,976.6 $2,266.7
Total Liabilities $1,318.4 $1,284.9 $33.5
Total Net Position $2,924.9 $691.7 $2,233.2
Total Revenue and Financing
$1,823.9 $615.3 $1,208.6
Sources
Total Expenses $1,530.4 $420.0 $1,110.4
Net Income $293.5 $195.3 $98.2
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Allocation of Fund Assets September 30, 2021
Assets
Assets increased by $2,266.7 million during FY 2021 caused by the following activities: Fund
Balance with Treasury increased $2,139.8 million due to COVID-19 Emergency Support funding
and a larger amount of the FY 2020 Government Sponsored Enterprise (GSE) fees received in FY
2021 compared to the prior year; loans receivable increased $54.7 million due to new loans
issued in FY 2021 under the CDFI Bond Guarantee Program (CDFI BGP) and the CDFI FA
Program; Investments-Nonvoting Equity Securities, at Cost, decreased by $4.0 million, and
Investments-Nonvoting Equity Securities, at Fair Value, increased by $19.4 million due to
unrealized gains; Accrued Revenue increased by $55.6 million due to the accrual of the FY 2021
portion of GSE fees owed to the CDFI Fund (this accrual will be paid in FY 2022 to fund the
Capital Magnet Fund (CMF)); and Internal-use Software increased by $1.2 million.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Fund Balance with Treasury
The Fund Balance with Treasury (FBwT) reflects a $2,139.8 million increase. $1,915.4 million of
the increase is the COVID-19 Emergency Support funding appropriations received in FY21 that
were not yet disbursed to CDFI’s in response to this initiative. An increase of $211.8 million is
due to restricted funds received from the GSEs as a result of an increase in new business
purchases year over year for the GSEs. Restricted funds from Special and Trust Funds relate to
the CMF and are used to carry out competitive award grants to CDFIs and qualified Non-Profit
Housing Organizations.
Loans Receivable, Net
Loans receivable is increased when loan awards (under the CDFI, Native Initiatives (NACA) and
CDFI BGP programs) are disbursed and decreased for loan repayments and loan write-offs.
During FY 2021, net loans increased by $54.7 million resulting from new loans of $95.3 million
partially offset by CDFI BGP and direct loan principal repayments from recipients of $43.0
million and an increase due to the change in Allowance for Doubtful Accounts of $2.4 million.
Investments
The CDFI Fund currently holds three types of investments with net balances as follows:
• Non-voting equity securities - $44.7 million
• Limited partnerships - $0.7 million
• Secondary Capital - $1.5 million
The primary source of financial data used for the majority of assessments is the most recent
audited financial statements of the investees. These assessments determine whether any
other–than–temporary impairments should be recognized. Zero investments were
determined to be other-than-temporarily impaired at September 30, 2021. Two non-voting
equity security investments had upward adjustments for an observable price change totaling
$15.4 million at September 30, 2021.
Accrued Revenue
Accrued revenue reflects a $55.6 million increase in projected collections of GSE fees due to an
increase in new business purchases for the GSEs.
Liabilities
The increase in liabilities of $33.5 million during the year was primarily attributable to an
increase in debt of $50.6 million, offset by a decrease in awards payable of $17.6 million.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Debt
During FY 2021, the CDFI Fund borrowed $98.4 million to issue new loans, $9.8 million to fund
a downward subsidy re-estimate, and $3.1 million to meet annual interest payments to
Treasury at interest rates ranging from 1.92% to 5.83%, depending on maturity dates and/or
risk categories. The CDFI Fund’s debt was reduced by repayments of CDFI BGP principal,
upward subsidy re-estimates, repayments of Direct Loan debt, and repayments of prior year
cash balances brought forward to Treasury totaling $60.7 million. Principal repayments
collected from recipient’s loans during the year are used to repay the Treasury borrowings;
therefore, amounts collected and repaid to Treasury each year will vary.
Awards Payable
The decrease in awards payable reflects the timing of the Bank Enterprise Award (BEA) Program
award funding round. As of September 30, 2021, the BEA Program had not announced their
2021 funding round, therefore no liability was incurred. In September of FY 2020 the BEA’s 2020
funding round was announced and a liability in the amount $24.9 million was incurred as the
BEA recipients had met the conditions required for payment. An increase to awards payable of
$7.0 million was for liabilities incurred for the Rapid Response Program (RRP), which was part of
COVID-19 Emergency Support funding, in which Assistance Agreements had been executed as of
September 30, 2021, but disbursements had not yet been made.
Net Position
Net position increased during the year by $2,233.2 million. Net position will change during the
year as a result of the following: 1) the difference between appropriations received (net of
appropriations cancelled, rescinded and adjusted for credit subsidy re-estimates) and
appropriations used; and 2) net income. During FY 2021, appropriations received and
appropriations for subsidy re-estimate (net of amounts cancelled, rescinded and downward
subsidy re-estimate) was $3,272.2 million. Appropriations used was $1,332.4 million resulting
in an increase in unexpended appropriations of $1,939.8 million. Net position was also
increased by net income of $293.5 million. Net Income of $268.5 million is attributable to GSE
fees collected, accrued, and expensed. The CDFI Fund collected and accrued $438.4 million
and expensed $169.9 million. The Cumulative Results of Operations – Capital Magnet Fund is
composed entirely of restricted funds. Under federal statute, these funds have been
specifically identified and are only designated for activities, benefits, or purposes of the CMF.
Net Income of $15.4 million is attributable to unrealized gains in non-voting equity securities
due to upward adjustments for observable price changes.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Revenue and Financing Sources
One source of revenue and financing for the CDFI Fund is the annual appropriation used
to fund expenses (“appropriations” as reflected in the Statements of Operations and
Changes in Net Position). The second source is the GSE fees accrued and collected to
support the CMF. The fees collected are subsequently disbursed and reported as an
expense.
Revenue and Financing Sources
(Dollar amounts in millions)
$1,823.9
$2,000
$1,800
$1,600
$1,400
$1,200
$1,000
$800 $615.3
$437.7 $462.0
$600 $386.2 $357.3
$400
$200
$0
2016 2017 2018 2019 2020 2021
Fiscal Year
Revenue and Financing Sources include appropriations, GSE fees, interest income, and other revenue
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Expenses
The change in the CDFI Fund’s operating expenses, during FY 2021 consisted of the following:
Comparison of Operating Expenses Excluding
Administrative Expenses Paid by Others
Fiscal Years 2021 and 2020
(Dollar amounts in millions)
FY 2021 FY 2020 Increase/(Decrease)
Award Expenses $1,464.4 $347.8 $1,116.6
Administrative Expenses $31.1 $32.3 ($1.2)
Bad Debt Expense ($2.5) $1.5 ($4.0)
Total Operating Expenses $1,493.0 $381.6 $1,111.4
Award Expenses
Award expenses increased during the year by $1,116.6 million due to the following activities:
the new RRP awards increased expenses $1,091.1, CMF award expenses increased $42.5
million, and CDFI Program award expenses increased $7.7 million, offset by BEA award
expenses decreasing $24.7 million. The change in award expenses increased significantly
mainly due to the RRP awards, which was a new program in FY 2021. The change in CMF
Program award expenses was due to an increase in the total amount of award funding year
over year. The CDFI Program award expense increase was due to more payments disbursed in
FY 2021 than FY 2020. The CDFI Program incurs expenses when awardees have met the
conditions required to use the award funding. The BEA Program award expenses decreased
because the 2021 funding round will not be awarded until FY 2022.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Administrative Expenses
Administrative expenses decreased by $1.2 million during FY 2021. This decrease was due to
$2.6 million decrease in contractual services; offset by a $0.8 million increase amortization
expense.
Bad Debt Expense
Bad debt expense decreased by $2.5 million as a result of a reduction to the bad debt
allowance in FY 2021. In addition to the loans issued under the CDFI FA Program, the
Secretary of the Treasury issues guarantees for the full amount of bond issuances to support
CDFI BGP loans. The CDFI Fund does not bear any CDFI BGP loan defaults and, therefore, no
allowance is recognized.
Net Income
The amount of appropriations used (the largest component of the CDFI Fund’s revenue) is,
with certain adjustments, equal to the amount of operating expenses for the year. The two
exceptions are for the GSE fees collected, accrued, and expensed as well as any gains or
losses related to investments. Accordingly, the excess (shortage) will consist of the amount by
which revenue and financing sources, other than appropriations used, exceeds expenses. For
FY 2021, other expenses totaled $36.5 million, consisting of interest expense for Treasury
borrowings. Interest and dividend income totaled $35.5 million.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Independent Auditors’ Report
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KPMG LLP
Suite 12000
1801 K Street, NW
Washington, DC 20006
Independent Auditors’ Report
Deputy Inspector General, U.S. Department of the Treasury
Director, Community Development Financial Institutions Fund:
Report on the Financial Statements
We have audited the accompanying financial statements of the Community Development Financial Institutions
Fund (CDFI Fund), which comprise the statements of financial position as of September 30, 2021 and 2020,
and the related statements of operations and changes in net position, and cash flows for the years then ended,
and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted
our audits in accordance with auditing standards generally accepted in the United States of America, in
accordance with the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, and in accordance with Office of Management and
Budget (OMB) Bulletin No. 21-04, Audit Requirements for Federal Financial Statements. Those standards and
OMB Bulletin No. 21-04 require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we
express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Community Development Financial Institutions Fund as of September 30, 2021 and 2020, and
the results of its operations, changes in net position, and its cash flows for the years then ended in accordance
with U.S. generally accepted accounting principles.
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KPMG LLP, a Delaware limited liability partnership and a member firm of
the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
Other Matters
Other Information
Our audits were conducted for the purpose of forming an opinion on the basic financial statements as a whole.
The Message from the Director, Overview, Program Discussion and Analysis, Administrative Discussion and
Analysis, Status of Financial Management, and Appendix: Glossary of Acronyms are presented for purposes of
additional analysis and are not a required part of the basic financial statements. Such information has not been
subjected to the auditing procedures applied in the audits of the basic financial statements, and accordingly, we
do not express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements as of and for the year ended September 30,
2021, we considered the CDFI Fund’s internal control over financial reporting (internal control) as a basis for
designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the CDFI
Fund’s internal control. Accordingly, we do not express an opinion on the effectiveness of the CDFI Fund’s
internal control. We did not test all internal controls relevant to operating objectives as broadly defined by the
Federal Managers’ Financial Integrity Act of 1982.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial
statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal
control that we consider to be material weaknesses. However, material weaknesses may exist that have not
been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the CDFI Fund’s financial statements as of and for
the year ended September 30, 2021 are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the financial statements. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards or OMB Bulletin No. 21-04.
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Purpose of the Other Reporting Required by Government Auditing Standards
The purpose of the communication described in the Other Reporting Required by Government Auditing
Standards section is solely to describe the scope of our testing of internal control and compliance and the
results of that testing, and not to provide an opinion on the effectiveness of the CDFI Fund’s internal control or
compliance. Accordingly, this communication is not suitable for any other purpose.
Washington, DC
December 15, 2021
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Financial Statements and Notes
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Community Development Financial Institutions Fund
Statements of Financial Position
As of September 30, 2021 and September 30, 2020
(Dollar amounts in thousands)
2021 2020
Assets
Fund Balance with Treasury (Note 4) $ 2,616,735 $ 476,869
Loans Receivable, Net of Allowance for Bad Debt (Note 5) 1,259,228 1,204,536
Investments:
Investment, Secondary Capital Interest (Note 6) 1,476 1,452
Investments, Nonvoting Equity Securities, at Cost 2,600 6,600
Investments, Nonvoting Equity Securities, at Fair Value (Note 7) 42,140 22,745
Investments, Limited Partnership Interests 704 743
Accrued Revenue Receivable (Note 13) 310,510 254,900
Internal-use Software, Net of Accumulated Amortization 9,476 8,271
Other Assets 442 473
Total Assets $ 4,243,311 $ 1,976,589
Liabilities and Net Position
Accounts Payable $ 1,175 $ 725
Awards Payable (Note 8) 7,366 24,990
Accrued Payroll 776 728
Accrued Annual Leave 1,057 1,070
Other Liabilities - 38
Debt (Note 9) 1,308,034 1,257,386
Total Liabilities 1,318,408 1,284,937
Commitments and Contingencies (Note 10)
Cumulative Results of Operations - All Other Funds 42,205 17,266
Cumulative Results of Operations - Capital Magnet Fund (Note 13) 714,967 446,460
Total Cumulative Results of Operations 757,172 463,726
Unexpended Appropriations (Note 11) 2,167,731 227,926
Total Net Position 2,924,903 691,652
Total Liabilities and Net Position $ 4,243,311 $ 1,976,589
The accompanying notes are an integral part of these financial statements.
71
Community Development Financial Institutions Fund
Statements of Operations and Changes in Net Position
For the Years Ended September 30, 2021 and September 30, 2020
(Dollar amounts in thousands)
2021 2020
Revenue and Financing Sources:
Appropriations (Note 11) $ 1,332,373 $ 252,365
Imputed Financing (Note 12) 892 808
Interest, Non-Federal 32,995 31,251
Interest, Federal 2,444 4,840
Dividends 70 141
Government Sponsored Entities' Fees (Note 13) 438,358 309,209
Other 1,213 1,127
Equity in Gain of Associates, Net 130 98
Unrealized Gain on Investments 15,395 15,497
Total Revenue and Financing Sources 1,823,870 615,336
Expenses:
CDFI Grants 204,364 196,737
BEA Grants 105 24,806
CMF Grants 168,809 126,259
RRP Grants 1,091,091 -
Administrative Expenses (Note 14) 31,095 32,319
(Reduction)/Addition of Bad Debt Expense (2,469) 1,464
Administrative Expenses Paid by Others (Note 12) 892 808
Total Operating Expenses 1,493,887 382,393
Other Expenses
Interest Expense, Federal 36,537 37,396
Loss on Redemption of Investment - 227
Total Expenses 1,530,424 420,016
Net Income $ 293,446 $ 195,320
Cumulative Results of Operations, Beginning of Year $ 463,726 $ 268,406
Net Income 293,446 195,320
Cumulative Results of Operations, End of Year $ 757,172 $ 463,726
The accompanying notes are an integral part of these financial statements.
72
Community Development Financial Institutions Fund
Statements of Cash Flows
For the Years Ended September 30, 2021 and September 30, 2020
(Dollar amounts in thousands)
2021 2020
Cash Flows from Operating Activities:
Net Income $ 293,446 $ 195,320
Adjustments to Reconcile Net Income to Net Cash Provided by/(used in) Operating Activities:
Loss on Redemption of Investment - 227
Equity in Income of Associates, Net (130) (98)
Amortization Expense 2,742 1,947
Accretion of Discount on Secondary Capital Interest (24) (24)
(Reduction)/Addition of Bad Debt Expense (2,469) 1,464
Unrealized Gain on Investments (15,395) (15,497)
Changes in Operating Assets and Liabilities:
Increase in Accrued Revenue Receivable (55,610) (133,400)
(Increase)/Decrease in Other Assets 31 (69)
Increase/(Decrease) in Accounts Payable, Accrued Payroll,
& Other Liabilities 460 (430)
Decrease in Awards Payable (17,624) (286)
(Decrease)/Increase in Accrued Annual Leave (13) 223
Net Cash Provided by Operating Activities 205,414 49,377
Cash Flows from Investing Activities:
Loans Disbursed (95,282) (169,485)
Collection of Loan Principal 43,006 35,872
Proceeds from Redemption of Investments - 1,314
Proceeds from Distribution from Investments 169 -
Purchases of Internal-use Software (3,947) (1,091)
Recovery of Loans Written Off 53 -
Net Cash (used in) Investing Activities (56,001) (133,390)
Cash Flows from Financing Activities:
Increase/(Decrease) in Unexpended Appropriations 1,939,805 (2,835)
Borrowings from Federal Financing Bank 94,049 168,426
Repayments to Federal Financing Bank (41,325) (30,508)
Borrowings from Treasury 17,309 21,965
Repayments to Treasury (19,385) (15,670)
Net Cash Provided by Financing Activities 1,990,453 141,378
Net Change in Fund Balance with Treasury 2,139,866 57,365
Fund Balance with Treasury, Beginning of Year 476,869 419,504
Fund Balance with Treasury, End of Year $ 2,616,735 $ 476,869
The accompanying notes are an integral part of these financial statements.
73
D
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes to Financial Statements
September 30, 2021 and 2020
74
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
(1) Description of Reporting Entity
The Community Development Financial Institutions Fund (CDFI Fund), a government corporation,
was created as a bipartisan initiative in the Riegle Community Development and Regulatory
Improvement Act of 1994 (Public Law (P.L.) 103-325). The CDFI Fund was placed in the
Department of the Treasury (Treasury) and began operations in July 1995.
The CDFI Fund operates various programs aimed at expanding the availability of credit, investment
capital, and financial and other services in distressed urban, rural, and Native American
communities. The CDFI Fund's mission is to expand economic opportunity for underserved people
and communities by supporting the growth and capacity of a national network of community
development lenders, investors, and financial service providers.
The major programs operated by the CDFI Fund are the:
• Community Development Financial Institutions (CDFI) Program
• Native Initiatives CDFI Assistance (NACA) Program
• Bank Enterprise Award (BEA) Program
• Capital Magnet Fund (CMF)
• CDFI Bond Guarantee Program (CDFI BGP)
• New Markets Tax Credit Program (NMTC)
• Small Dollar Loan Program (SDLP)
• Rapid Response Program (RRP)
• Emergency Support Program
The CDFI Program provides financial and technical assistance awards to CDFIs which in turn
provide services to create community development impact in underserved markets. Financial
assistance awards take the form of grants, direct loans, and investments. Technical assistance grants
provide assistance to start-up and early-stage CDFIs and entities planning to become CDFIs.
Through the NACA Program, a component of the Native Initiatives, the CDFI Fund provides grants
to help create CDFIs and to build the capacity of Native CDFIs that serve primarily Native
American, Alaska Native, and Native Hawaiian communities.
The BEA Program provides incentives to insured depository institutions (banks and thrifts) to
invest in CDFIs and to increase their lending and financial services in distressed communities.
Program participants are selected based on projected achievements. The awards are disbursed after
the activities have been implemented successfully, to ensure that only completed activities are
recognized and that the CDFI Fund’s limited dollars are effectively leveraged with private capital.
CMF provides competitively awarded grants to CDFIs and qualified non-profit housing
organizations. These awards can be used to finance affordable housing activities, as well as related
economic development activities (including community service facilities). Award recipients are
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COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
able to utilize funds to create financing tools such as loan loss reserves, revolving loan funds, risk-
sharing loans, and loan guarantees. Organizations that receive CMF awards are required to provide
housing and community development investments at least ten times the award amount.
The CDFI BGP was enacted through the Small Business Jobs Act of 2010 (P.L. 111-240). The
CDFI Fund administers the program and the Secretary of the Treasury (Secretary) issues guarantees
for the full amount of bonds issued to support CDFIs that make investments for eligible community
or economic development purposes. The bonds support CDFI lending and investment by providing
a source of long-term, patient capital to CDFIs.
Under the NMTC Program, the CDFI Fund provides tax credit allocation authority to Community
Development Entities (CDEs), which use these credits to attract private sector investment.
Proceeds from these investments are used for community development purposes. Unlike the CDFI
Fund’s grant programs and the CDFI BGP, the tax credit allocation authority to CDEs has no effect
on the financial statements of the CDFI Fund.
The SDLP, authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L.
111-203), was enacted through the Consolidated Appropriations Act, 2020 (P.L. 116-260). The
purpose of the SDLP is to provide grants for loan loss reserves and technical assistance to enable
Certified CDFIs to establish and maintain small dollar loan programs.
The RRP was enacted through the Coronavirus Response and Relief Supplemental Appropriations
Act, 2021 (P.L. 116-260). The program is designed to quickly deploy capital, through grants, to
Certified CDFIs to support, prepare for, and respond to the economic impact of the COVID-19
pandemic.
The Emergency Support Program was also enacted through P.L. 116-260. The program is in the
implementation stage and is designed to provide grants to CDFIs to respond to the economic impact
of the COVID-19 pandemic.
(2) Limitations of the Financial Statements
The financial statements report the financial position, results of operations, changes in net position,
and cash flows of the CDFI Fund as of and for the fiscal years (FYs) ending on September 30, 2021
and 2020, pursuant to the requirements of Title 31 of the United States Code 91, Government
Corporations. While the statements have been prepared from the books and records of the CDFI
Fund in conformity with accounting principles generally accepted in the United States of America
(GAAP), the statements are in addition to the financial reports used to monitor and control
budgetary resources which are prepared from the same books and records. The statements should
be read with the realization that they are for a component of the United States (U.S.) Government, a
sovereign entity.
76
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
(3) Summary of Significant Accounting Policies
(a) Basis of Presentation
The American Institute of Certified Public Accountants (AICPA) has designated the Federal
Accounting Standards Advisory Board (FASAB) as the standards-setting body for financial
statements of federal governmental entities, with respect to the establishment of GAAP.
Statements of Federal Financial Accounting Standards (SFFAS) 34, The Hierarchy of
Generally Accepted Accounting Principles, issued by FASAB, provides authoritative
guidance allowing federal entities to prepare financial statements in conformance with
accounting and reporting principles issued by the Financial Accounting Standards Board
(FASB), the private-sector standards-setting body. Accordingly, the CDFI Fund financial
statements are presented in accordance with accounting standards published by FASB, and
follows the full accrual basis of accounting under which revenues are recognized when
earned and expenses recognized when incurred, regardless of when cash is exchanged.
Certain prior year balances have been reclassified to conform to the current year presentation,
the effects of which are immaterial.
(b) Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could
differ from these estimates. Items subject to such estimates include allowance for bad debts,
investments recorded at fair value, and the accrual of revenues for fees from Government
Sponsored Entities (GSEs), comprised of the Federal National Mortgage Association (Fannie
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
(c) Fund Balance with Treasury
The CDFI Fund does not maintain cash in commercial bank accounts. Treasury processes
cash receipts and disbursements. Fund Balance with Treasury is composed of appropriated
and borrowed funds (financing accounts) that are available to pay liabilities and finance
authorized award and purchase commitments. Also included are restricted funds from the
GSEs used to finance activities for CMF. For the purposes of the Statements of Cash Flows,
the funds with the Treasury are considered cash.
(d) Loans Receivable, Net of Allowance for Bad Debt
Loans receivable relate to direct loans made to certain CDFI Program awardees and CDFI
BGP recipients and are recorded at face value on the closing date. Direct and incremental
loan costs are deemed to be de minimis. Any interest is recognized over the life of the loan,
when earned. Principal amounts collected on loans receivable are included in cash flows
from investing activities in the Statements of Cash Flows.
All amounts due and payable under the loans issued through the CDFI BGP are guaranteed by
the U.S., acting through the Secretary, thus the possibility of a loss is remote.
77
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
The allowance for bad debts is the CDFI Fund’s best estimate of the amount of credit losses
in the CDFI Fund’s existing loans. The allowance comprises specific loan analysis that
considers portfolio level historical loss experience adjusted for current factors. The historical
loss experience is based on actual loss history experienced by the CDFI Fund since inception
of the loan portfolio. This actual loss experience is supplemented with other qualitative
factors including delinquencies, adjusted asset to liability ratios of borrowers, and
consideration of the number of historical loan restructurings.
The allowance includes observable and non-observable impairments. A loan is considered
impaired if it is probable that the CDFI Fund will not collect all principal and interest
contractually due. The CDFI Fund recognizes loans that have a credit quality indicator of
“doubtful” or “loss” as an impaired loan. Impaired loans include loans modified in Troubled
Debt Restructurings (TDRs) where concessions have been granted to borrowers experiencing
financial difficulties only if the most current asset to liability ratio, excluding restricted assets,
is below 100%. The TDR concessions may include a reduction in the interest rate on the
loan, payment extensions, or other actions intended to maximize collection.
In order to calculate the impairment amount for each loan, the borrower’s adjusted asset to
liability ratio, excluding restricted assets, is reviewed and mapped to Standard and Poor’s
published default rates. The default rates represent the portion of each loan that is considered
impaired. The impairment represents the present value of the expected future cash flows
discounted at the loan’s effective interest rate. Impairment losses are charged against the
allowance and increases in the allowance are charged to bad debt expense. Loans are written
off against the allowance when all possible means of collection have been exhausted and the
potential for recovery is considered remote.
During FYs 2021 and 2020, the CDFI Fund did not receive any requests from awardees
requesting an extension of their maturity date. Requests are processed in collaboration with
the Treasury’s Office of the Deputy Chief Financial Officer (ODCFO). A restructuring of a
loan constitutes a troubled debt restructuring in accordance with FASB Accounting Standards
Codification (ASC) 310-40, Receivables – Troubled Debt Restructuring by Creditors, if the
creditor grants a concession to the debtor that it would not otherwise consider. While the
loan extensions are being processed, awardees do not make principal payments. The CDFI
Fund continues to accrue and collect interest on all loans that are under restructuring subject
to determination about eventual collectability.
(e) Investments
The CDFI Fund provides assistance to certain for-profit CDFI program awardees by
purchasing various investments described below. The CDFI Fund is restricted from owning
more than 50% of the equity of awardees and from controlling their operations. None of the
investments meet the criteria for Variable Interest Entity Accounting.
CDFI Fund investments include the following:
• Non-voting Equity Securities: Investments with a readily determinable fair value are
recorded at such fair value. Investments without readily determinable fair values are
recorded using the measurement alternative at cost minus impairment, plus or minus
subsequent adjustments for observable prices in orderly transactions for the identical
or similar investment of the same issuer. The CDFI Fund recognized no other-than-
78
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
temporary impairment losses of these investments for the FYs ended September 30,
2021 and 2020.
• Secondary Capital Interests: These interests are held-to-maturity and carried at
amortized cost, subject to other-than-temporary impairments. Held-to-maturity debt
securities are those debt securities in which the CDFI Fund has the ability and intent
to hold the security until maturity. The interests are adjusted for the amortization/
accretion of premiums or discounts. Premiums and discounts are amortized over the
life of any related held-to-maturity security as an adjustment to yield using the
straight-line method.
• Limited Partnership Interests: These interests are carried in accordance with the
equity method of accounting by recognizing the pro-rata share of investee’s
profit/loss through the Statements of Operations and Changes in Net Position. A
decline in the fair value of any investment below cost that is deemed to be other-than-
temporary results in an impairment to reduce the carrying amount to fair value.
To determine if an impairment is other-than-temporary, the CDFI Fund considers whether:
(1) it has the ability and intent to hold the investment until a market price recovery; and (2)
evidence indicating the cost of the investment is recoverable outweighs evidence to the
contrary. Evidence considered in this assessment includes the reasons for the impairment, the
severity and duration of the impairment, changes in value subsequent to year-end, forecasted
performance of the investee, and the general market condition in the industry in which the
investee operates. The impairment is charged to net income and a new cost basis for the
investment is established.
(f) Interest and Other Receivables
Interest and other receivables are included in “Other Assets” on the Statements of Financial
Position. Interest is accrued on the outstanding loans receivable principal balances and
investments based on stated rates of interest as earned and when determined collectible.
Interest is not accrued past the maturity date of loans receivable and investments or on
impaired loans with a loss credit quality indicator.
(g) Accrued Revenue Receivable and Government Sponsored Entities’ Fees
The CDFI Fund receives fees from the GSEs, under the Housing and Economic Recovery Act
of 2008 (HERA). Per statute, the GSEs are required to set aside annual allocations equal to
4.2 basis points for each dollar of their unpaid principal balances of total new business
purchases. The CMF receives 35% of these allocations. The fees are recognized as an
unconditional restricted promise to give and recorded on an accrual basis, at their net
realizable value, as they are considered recognizable and estimable. The reported accrual
amounts are expected to be collected within one year.
(h) Internal-Use Software
Internal-use software represents the completed phases of various software placed in service
pertaining to awards management.
79
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
The software is amortized using the straight-line method over the estimated useful life
ranging from seven to ten years. Amortization expense for the FYs ended September 30,
2021 and 2020 was $2.7 million and $1.9 million, respectively.
Employee and contractor costs for developing custom internal use software are capitalized
when incurred for the design, coding, and testing of the software. Software in development is
presented in "Other Assets" on the Statements of Financial Position and is not amortized until
placed in service.
(i) Grant Expense and Awards Payable
As a resource provider, the CDFI Fund recognizes contributions made, including
unconditional promises to give, as grant expense in the period made. Therefore, CDFI
Program, CMF, RRP, and SDLP grant expenses and awards payable are recorded when the
grantee meets the requirement to receive payment (i.e., satisfy the condition(s)). BEA
Program grant expenses and awards payable are recorded when the CDFI Fund approves the
BEA award to be made (i.e., at the time the funds are obligated) for banks and thrifts that
have provided adequate documentation of retroactive qualifying transactions.
If the initial installment amount is less than the announced award amount, the recipient may
become eligible for subsequent award installments. The remaining undisbursed award amount
represents a conditional promise to give until the recipient meets the conditions to be entitled
to the transfer of subsequent amounts. When the promise becomes unconditional, as
applicable, the CDFI Fund accrues the award payable and recognizes the grant expense.
(j) Retirement Plans
CDFI Fund employees participate in the Federal Employees’ Retirement System (FERS).
The FERS was established by the enactment of the Federal Employees' Retirement System
Act of 1986 (P.L. 99-335). Pursuant to this law, FERS and Social Security automatically
cover most employees hired after December 31, 1983.
Employees hired prior to January 1, 1984, were provided an opportunity to join both FERS
and Social Security or remain in the Civil Service Retirement System (CSRS). The amount
of cost recognized by the CDFI Fund for FERS and Social Security contributions for the FYs
ended September 30, 2021 and 2020 was $1.6 million and $1.5 million, respectively.
For all employees, a Thrift Savings Plan (TSP) account is automatically established and the
employee can have up to a predetermined maximum amount withheld from their base salary,
which is deposited into their TSP account. The CDFI Fund makes matching contributions for
FERS employees ranging from 1% to 4% for employees who contribute to their TSP account.
Additionally, a 1% contribution is automatically made to TSP by the CDFI Fund for each
employee. The amount of cost recognized by the CDFI Fund for these contributions for the
FYs ended September 30, 2021 and 2020 was $462 thousand and $456 thousand,
respectively.
The CDFI Fund has no employees covered under CSRS as of September 30, 2021.
80
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
(k) Accrued Annual Leave
Annual leave and compensatory leave is accrued as a liability when earned by the employee,
and the accrual is reduced as leave is taken. The balance in this accrued liability account is
computed using current pay rates. Sick leave and other types of non-vested leave are
expensed as the leave is taken.
(l) Debt
Debt represents borrowings payable to the Treasury and the Federal Financing Bank (FFB)
that were incurred to fund direct loans made by the CDFI Fund and other aspects of
permissible borrowing authority. The CDFI Fund recognizes these as related party
transactions. The borrowings payable to Treasury are related to the unsubsidized portion of
loans. Subsidies are costs to the government over the entire life of the loan. The borrowings
payable related to the FFB represent the principal loans balances disbursed under the CDFI
BGP. Principal repayments to the Treasury are required to be made based on the scheduled
collections of loans receivable and are due September 30 of each year of maturity. Principal
repayments to the FFB are made quarterly and semi-annually as collections are received by
loan borrowers. See Note 9 for more information and disclosures related to debt.
(m) Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties
and other sources are recorded when it is probable that a liability has been incurred and the
amount of the obligation can be reasonably estimated. Legal costs incurred in connection
with loss contingencies are expensed as incurred.
(n) Revenue and Financing Sources
The CDFI Fund receives funding through appropriations from the U.S. Congress. The CDFI
Fund receives two-year appropriations and a no-year appropriation to be used for financial
and technical assistance awards, within statutory limits, and annual appropriations for
operating expenses. Appropriations are recognized as a financing source at the time when 1)
grant recipient has met the requirements to be allowed to use the CDFI Fund-issued grants; 2)
the CDFI Fund accrues liabilities related to administrative expenses and internal-use software
costs incurred; 3) the CDFI Fund acquires an investment; or 4) the CDFI Fund finances a
loan, in part, with an initial direct loan subsidy. Also see Note 3(g) for the CDFI Fund’s
policy on GSE fee revenue recognition.
The CDFI Fund also receives fees from the eligible CDFIs, per the Small Business Jobs Act
of 2010. Per statute, the fees are payable annually to the CDFI Fund based on the amount of
the unpaid principal balance of the bond issue. The fees collected, recorded in “Other” on the
Statements of Operations and Changes in Net Position, shall be used to reimburse the
Treasury for any administrative costs incurred in implementing the CDFI BGP.
Occasionally, the CDFI Fund receives dividends on its equity investments and may use those
funds for operating expenses. Dividends are recognized when earned, which is usually when
declared.
Additional revenue is obtained from interest received on direct loans and on undisbursed
borrowings of funds held by the Treasury. Interest is recognized when earned and
determined to be collectible.
81
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
(o) Tax Status
As a government entity, the CDFI Fund, is not subject to federal, state, or local income taxes
and, accordingly, no provision for income tax is recorded.
(p) Classified Activities
The operating results of classified programs (those designated as classified by the U.S.
Government which cannot be specifically described), if any, are included in our financial
statements and are subjected to the same oversight and internal controls as our other
programs.
(q) Fair Value Measurements
The CDFI Fund applies the provisions of ASC Topic 820, Fair Value Measurements, for fair
value measurements of financial assets that are recognized or disclosed at fair value in the
financial statements. The fair value hierarchy distinguishes between observable and
unobservable inputs, which are categorized as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the CDFI Fund has the ability to access at the measurement date.
• Level 2 inputs are inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for the asset or liability.
See Note 7 for more information and disclosures relating to the CDFI Fund’s fair value
measurements.
(r) Adoption of New Accounting Standards
Effective October 1, 2020, the CDFI Fund completed the adoption of Accounting Standards
Update (ASU) 2018-08, Not-For-Profit Entities (Topic 958): Clarifying the Scope and the
Accounting Guidance for Contributions Received and Contributions Made. The ASU
amendments apply to all entities that receive or make contributions of cash and other assets,
including promises to give, within the scope of ASC 958-605, Not-for-profit Entities:
Revenue Recognition, and contributions made within the scope of ASC 720-25, Other
Expenses—Contributions Made. The CDFI Fund applied the ASU guidance as it relates to
accounting for appropriations and GSE fees received (contributions received) and grant
expenses (contributions made).
The CDFI Fund determined that ASC 958-605 does not apply to the receipt of appropriations
and, as an alternative, adopted the provisions of FASAB SFFAS No.7, Accounting for
Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and
Financial Accounting. Pursuant to SFFAS No. 7, when the CDFI Fund receives the
appropriations it recognizes the amount received as part of Net Position and reports it as
Unexpended Appropriations on the Statements of Financial Position. The use of
appropriations is recognized as a financing source when the CDFI Fund determines that
grantees meet the requirements to receive the awarded amounts, incurs administrative
expenses or internal use software costs, acquires an investment, or finances a loan, in part,
82
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
with an initial direct loan subsidy (refer to Note 3(n) above entitled Revenue and Financing
Sources).
The CDFI Fund adopted the provisions of ASC 958-605 for GSE fees received and
recognizes revenue as an unconditional restricted promise to give, recorded on an accrual
basis, at their net realizable value, as they are considered recognizable and estimable (refer to
Note 3(g) above entitled Accrued Revenue Receivable and Government Sponsored Entities’
Fees).
In adopting the provisions of ASC 720-25, the CDFI Fund recognizes the grant expenses
funded by appropriations and GSE fees when the CDFI Fund determines that grantees meet
the requirements to receive the awarded amounts (refer to Note 3(i) above entitled Grant
Expense and Awards Payable). The adoption of ASU 2018-08 did not have a material impact
on the CDFI Fund’s financial statements.
(s) Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326). This
update and numerous subsequent updates are intended to provide financial statement users
with more decision useful information. This information includes the expected credit losses
on financial instruments and other commitments to extend credit held by a reporting entity at
each reporting date. To achieve this objective, the amendments in this update replace the
incurred loss impairment methodology in current GAAP with a methodology that reflects
expected credit losses. This methodology requires consideration of a broader range of
reasonable and supportable information to inform credit loss estimates. The new standard is
effective for FYs beginning after December 15, 2022, accordingly, the CDFI Fund will
implement the provisions of ASU 2016-13 as of October 1, 2023. The CDFI Fund is currently
evaluating the impact of this ASU on its financial statements.
(4) Fund Balance with Treasury
Fund Balance with Treasury (FBwT) as of September 30, 2021 and 2020 consisted of the following
components:
2021 2020
(in thousands)
Available $ 1,972,216 $ 16,210
Obligated 238,241 266,873
Restricted 403,328 191,562
Expired 2,950 2,224
$ 2,616,735 $ 476,869
FBwT includes appropriated, borrowed funds and restricted funds available to pay liabilities and
finance authorized financial award and purchase commitments. The available funds reflect
appropriated funds that have yet to be committed. The obligated funds reflect appropriated funds
83
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
that have been committed, but not yet disbursed. The expired funds reflect appropriated funds that
are no longer available for obligation, but can be used to pay liabilities; expired funds cancel after
five years and are no longer available for use. Restricted funds represent GSE fees received and are
used to finance the CMF program, which provides competitive award grants to CDFIs and qualified
non-profit housing organizations.
(5) Loans Receivable, Net of Allowance for Bad Debt
The CDFI Fund assesses and monitors the credit quality of its loans on an ongoing basis using
audited financial statements of awardees, unaudited disclosures, and IRS 990 forms. Loans
receivable are disaggregated by general recourse versus asset-backed loans. The general recourse
loan portfolio is disaggregated further by loans disbursed prior to October 1, 2011 (pre-2012) and
loans disbursed on or after October 1, 2011 (2012-current). This delineation has been made as the
CDFI Fund introduced a standard loan product in FY 2012 to reduce risk and exposure to the CDFI
Fund by creating standard underwriting procedures, predictable amortization schedules, and
scheduled interest payments. Asset-backed loans represent loans issued in conjunction with the
CDFI BGP.
The CDFI Fund is exposed to several risk factors related to its general recourse loans receivable:
• Risk of a deteriorating economic climate and its impact on the CDFI Fund’s collection of
loans.
• Economic, industry, and geographic risks associated with unsecured loans to small
financial institutions.
All amounts due and payable under the loans issued through the CDFI BGP are guaranteed by the
U.S., acting through the Secretary, thus the possibility of a loss is remote.
The CDFI Fund’s loan portfolio as of September 30, 2021 and 2020, delineated by
delinquency category is as follows:
As of September 30, 2021
Greater than 90 Total Loans
(in thousands) Days Past Due Current Receivable
General Recourse Pre-2012 $ 820 $ 6,716 $ 7,536
General Recourse 2012-Current - 49,788 49,788
Asset-backed - 1,207,701 1,207,701
$ 820 $ 1,264,205 $ 1,265,025
Less Allowance for Bad Debt 5,797
Total $ 1,259,228
84
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
As of September 30, 2020
Greater than 90 Total Loans
(in thousands) Days Past Due Current Receivable
General Recourse Pre-2012 $ 848 $ 8,114 $ 8,962
General Recourse 2012-Current - 48,809 48,809
Asset-backed - 1,154,978 1,154,978
$ 848 $ 1,211,901 $ 1,212,749
Less Allowance for Bad Debt 8,213
Total $ 1,204,536
Gross loans receivable in nonperforming status for the FYs ended September 30, 2021 and 2020 was
$820 thousand and $848 thousand, respectively. The CDFI Fund defines nonperforming status as any
delinquent loan where an award recipient has not made any attempt to pay off the balance owed to the
CDFI Fund or any loan referred to collections.
The activity in the allowance for bad debt by loan type in FYs 2021 and 2020 is as follows:
As of September 30, 2021
(Reduction)/
Beginning Addition of Bad
Balance Recoveries Debt Expense Ending Balance
(in thousands)
General Recourse Pre-2012 $ 2,083 $ 53 $ (612) $ 1,524
General Recourse 2012-Current 6,130 - (1,857) 4,273
$ 8,213 $ 53 $ (2,469) $ 5,797
As of September 30, 2020
(Reduction)/
Beginning Addition of Bad
Balance Recoveries Debt Expense Ending Balance
(in thousands)
General Recourse Pre-2012 $ 2,203 $ - $ (120) $ 2,083
General Recourse 2012-Current 4,546 - 1,584 6,130
$ 6,749 $ - $ 1,464 $ 8,213
85
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
The allowance for bad debt attributable to loans individually evaluated for impairment
and loans collectively evaluated for impairment as of September 30, 2021 and 2020 is as
follows:
As of September 30, 2021
Loans Loans Allowance for Allowance for
Individually Collectively Individually Collectively
Evaluated for Evaluated for Evaluated Evaluated Total
Impairment Impairment Impaired Loans Impaired Loans Allowance
(in thousands)
General Recourse Pre-2012 $ 1,240 $ 6,296 $ 1,050 $ 474 $ 1,524
General Recourse 2012-Current 812 48,976 445 3,828 4,273
Asset-backed - 1,207,701 - - -
$ 2,052 $ 1,262,973 $ 1,495 $ 4,302 $ 5,797
As of September 30, 2020
Loans Loans Allowance for Allowance for
Individually Collectively Individually Collectively
Evaluated for Evaluated for Evaluated Evaluated Total
Impairment Impairment Impaired Loans Impaired Loans Allowance
(in thousands)
General Recourse Pre-2012 $ 1,288 $ 7,674 $ 1,288 $ 795 $ 2,083
General Recourse 2012-Current 812 47,997 812 5,318 6,130
Asset-backed - 1,154,978 - - -
$ 2,100 $ 1,210,649 $ 2,100 $ 6,113 $ 8,213
As of September 30, 2021 and 2020 impaired loans with a related allowance are as follows:
As of September 30, 2021
Unpaid Average Interest
Recorded Principal Related Recorded Income
Investment Balance Allowance Investment Recognized
(in thousands)
General Recourse Pre-2012 $ 1,240 $ 1,240 $ 1,050 $ 1,264 $ -
General Recourse 2012-Current 812 812 445 812 17
$ 2,052 $ 2,052 $ 1,495 $ 2,076 $ 17
86
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
As of September 30, 2020
Unpaid Average Interest
Recorded Principal Related Recorded Income
Investment Balance Allowance Investment Recognized
(in thousands)
General Recourse Pre-2012 $ 1,288 $ 1,288 $ 1,288 $ 1,549 $ -
General Recourse 2012-Current 812 812 812 812 16
$ 2,100 $ 2,100 $ 2,100 $ 2,361 $ 16
There were no impaired loans for which there is not a related allowance as of September 30, 2021 and
2020.
The CDFI Fund recognizes interest income on impaired loans with a credit quality indicator of doubtful,
as earned, in accordance with loan agreements.
For the FYs ended September 30, 2021 and 2020, the CDFI Fund had no new loans whose terms have
been modified in TDRs.
For the FYs ended September 30, 2021 and 2020, grants in the amount of $10.8 million and $2.1
million, respectively, were disbursed to debtors owing receivables whose terms had been previously
modified in TDRs. As of September 30, 2021 and 2020, there were commitments in the amount of $3.1
million and $2.4 million, respectively, to disburse grants to debtors owing receivables whose terms have
been modified in TDRs.
The CDFI Fund utilizes a rating system to classify each loan according to credit worthiness and risk. A
description of each category (credit quality indicator) as of September 30, 2021 and 2020, in terms of
the attributes of the borrower, the business environment in which the borrower operates or the loan
itself, follows:
Pass – Timely interest and highly probable principal payments; strong debt service capacity and
viability;
Likely – Timely interest and principal payments likely; average debt service capacity and viability;
Doubtful – Weak debt service capacity and/or going concern issues; evidence of financial hardship;
repayment may be possible with serious hardship;
Loss – Poor debt service capacity and going concern issues; in default; full loss is probable.
87
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
The credit quality indicators for loans receivable as of September 30, 2021 and 2020 were as follows:
As of September 30, 2021
Pass Likely Doubtful Loss Total
(in thousands)
General Recourse Pre-2012 $ 4,124 $ 2,172 $ 420 $ 820 $ 7,536
General Recourse 2012-Current 25,079 23,897 812 - 49,788
Asset-backed 1,207,701 - - - 1,207,701
$ 1,236,904 $ 26,069 $ 1,232 $ 820 $ 1,265,025
As of September 30, 2020
Pass Likely Doubtful Loss Total
(in thousands)
General Recourse Pre-2012 $ 4,979 $ 2,695 $ 440 $ 848 $ 8,962
General Recourse 2012-Current 22,515 25,482 812 - 48,809
Asset-backed 1,154,978 - - - 1,154,978
$ 1,182,473 $ 28,176 $ 1,252 $ 848 $ 1,212,749
(6) Investment, Secondary Capital Interest
The held-to-maturity investment cannot be redeemed prior to its redemption date of April 9, 2022.
The carrying amount, net of application discounts, which is also the fair value, is $1.5 million as of
September 30, 2021 and 2020. There are no gross unrealized gains or losses. The CDFI Fund
recognized no other-than-temporary impairment losses of these investments for FYs ended
September 30, 2021 and 2020.
(7) Investments, Nonvoting Equity Securities, at Fair Value
Investments accounted for at fair value consist of non-voting common stock held in for-profit CDFI
Program awardees.
Recurring Fair Value Measurement
The CDFI Fund has one investment measured at fair value that is considered a level 1 input in the
fair value hierarchy as there is a quoted price in an active market. The fair value of the investment
as of September 30, 2021 was $18.1 million. An upward adjustment was made for the quoted
market price totaling $14.1 million as of September 30, 2021. No upward adjustment was made as
88
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
of September 30, 2020. As of September 30, 2020, the investment did not have a readily
determinable fair value and was measured at cost.
Nonrecurring Fair Value Measurement
The CDFI Fund has one investment that was measured at fair value on a nonrecurring basis due to
observable price changes in September 2021 and 2020. The fair value of the investment was $24.0
million and $22.7 million as of September 30, 2021 and 2020, respectively. Upward adjustment
were made for the observable price changes totaling $1.3 million and $15.5 million as of September
30, 2021 and 2020, respectively. The investment is considered a level 2 input in the fair value
hierarchy.
(8) Awards Payable
As of September 30, 2021, the awards payable were as follows:
CDFI
(in thousands) Program BEA RRP Total
Amount Payable:
Within one year $ 38 $ 284 $ 7,044 $ 7,366
Total Awards Payable $ 38 $ 284 $ 7,044 $ 7,366
As of September 30, 2020, the awards payable were as follows:
CDFI
(in thousands) Program BEA RRP Total
Amount Payable:
Within one year $ - $ 24,990 $ - $ 24,990
Total Awards Payable $ - $ 24,990 $ - $ 24,990
(9) Debt
The CDFI Fund’s debt with FFB and Treasury totaled $1,308.0 million and $1,257.4 million as of
September 30, 2021 and 2020, respectively.
During FY 2021, the CDFI Fund borrowed $111.3 million for loans. This included $97.3 million
for CDFI BGP loans, $9.5 million for CDFI BGP downward subsidy reestimate, $1.1 million for
direct loans, $0.3 million for direct loan downward subsidy reestimate, and $3.1 million to meet
annual interest payments due to the Treasury, at interest rates ranging from 1.92% to 5.83%,
depending on maturity dates or risk categories. The CDFI Fund’s debt was reduced by repayments
of CDFI BGP principal, repayments of direct loan debt, upward subsidy reestimates, and
repayments of prior year cash balances brought forward to Treasury totaling $60.7 million.
89
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
During FY 2020, the CDFI Fund borrowed $190.4 million for loans. This included $172.2 million
for CDFI BGP loans, $12.9 million for CDFI BGP downward subsidy reestimate, $0.9 million for
direct loans, $1.4 million for direct loan downward subsidy reestimate, and $3.0 million to meet
annual interest payments due to the Treasury, at interest rates ranging from 1.92% to 5.83%,
depending on maturity dates or risk categories. The CDFI Fund’s debt was reduced by repayments
of CDFI BGP principal, repayments of direct loan debt, upward subsidy reestimates, and
repayments of prior year cash balances brought forward to Treasury totaling $46.2 million.
Interest paid in cash for the FYs ended September 30, 2021 and 2020 was $36.5 million and $37.4
million respectively.
The CDFI Fund has permanent indefinite borrowing authority to fund downward subsidy
reestimates and annual interest payments to the Treasury. These costs do not reduce the CDFI
Fund’s Net Position.
The following table presents future debt maturities as of September 30, 2021:
(in thousands) Fiscal Year Debt
2022 $ 45,309
2023 46,377
2024 48,735
2025 50,369
2026 51,575
Later years, through 2058 1,065,669
Total $ 1,308,034
(10) Commitments and Contingencies
Award, Purchase and Bond Guarantee Program Commitments
As of September 30, 2021 and 2020, unfilled award commitments amounted to $232.3 million and
$240.4 million, respectively. Award commitments relate to CDFI Program, NACA Program, RRP,
SDLP, and CMF awards which were approved by CDFI Fund management but not disbursed as of
year-end. The CDFI Program, NACA Program, RRP, SDLP, and CMF award commitments are not
considered liabilities at year-end because the awardees have not yet met the conditions required for
payment. Award commitments pertaining to the CDFI Program of $38 thousand and $0 as of
September 30, 2021 and 2020, respectively, are excluded from these amounts because they are
reflected as liabilities on the CDFI Fund’s Statements of Financial Position as these awardees have
met the conditions required for payment, but funds have not yet been disbursed. Award
commitments pertaining to the RRP of $7.0 million and $0 as of September 30, 2021 and 2020,
respectively, are also excluded from these amounts because they are reflected as liabilities as these
awardees have met the conditions required for payment, but funds have not yet been disbursed.
Award commitments pertaining to the BEA Program of $0.3 million and $25.0 million as of
September 30, 2021 and 2020, respectively, represent expenditures incurred by awardees for which
the CDFI Fund will compensate the awardee through a grant award and are excluded from these
90
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
commitment amounts since they are reflected as liabilities on the CDFI Fund’s Statements of
Financial Position.
Purchase commitments of $8.8 million and $9.6 million as of September 30, 2021 and 2020,
respectively, relate to the unexpired portion of contracts, and purchase orders relating to goods and
services not yet received.
A commitment of $2.0 million as of September 30, 2021, is related to the Economic Mobility Corps
(EMC). Funding for the EMC was enacted through the Consolidated Appropriations Act, 2020 to
be operated in conjunction with the AmeriCorps. The EMC places national service members at
Certified CDFIs to enhance their capacity to provide financial literacy, financial planning,
budgeting, saving, and other financial counseling activities in distressed and underserved areas.
As of September 30, 2021 and 2020, CDFI BGP unfilled commitments for related direct loan
disbursements amounted to $386.3 million and $407.0 million, respectively. Actual disbursement
is subject to borrowers satisfying certain conditions. Funding for such loans is covered by the CDFI
Fund’s established borrowing authority.
Contingency
The CDFI Fund has one pending or threatened litigation that has a reasonably possible likelihood of
an unfavorable outcome; however, it is impossible to ascertain the amount or range of potential
loss.
(11) Unexpended Appropriations
Unexpended appropriations as of September 30, 2021 and 2020 were as follows:
(in thousands) 2021 2020
Beginning Unexpended Appropriations $ 227,926 $ 230,761
Appropriations Received (1) 3,270,000 262,000
Appropriations for Subsidy Reestimate 16,008 7,149
Appropriations Cancelled (701) (1,576)
Appropriations Expended (2) (1,332,373) (252,365)
Downward Subsidy Reestimate Adjustment (13,129) (18,043)
Change in Unexpended Appropriations 1,939,805 (2,835)
Ending Unexpended Appropriations $ 2,167,731 $ 227,926
(1) The increase in appropriations received primarily relates to a $3 billion appropriation for the Rapid Response Program
and Emergency Support Program
(2) The increase in appropriations expended relates to appropriations used to fund the Rapid Response Program
(12) Imputed Financing
Imputed financing represents specific expenses relating to the CDFI Fund paid for by another
Federal organization. The components of imputed financing include pension costs for FERS
retirement plans, Health Benefits Program costs, Group Life Insurance Program costs and audit
91
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
fees. Imputed financing and the related administrative expenses paid by others for the FYs ended
September 30, 2021 and 2020 were $892 thousand and $808 thousand, respectively.
(13) Government Sponsored Entities’ Fees – CMF
Under HERA, 12 USC 4567, the GSEs are required to set aside annual allocations of their unpaid
principal balances of total new business purchases. The Federal Housing Finance Agency (FHFA),
acting as the GSEs’ conservator, suspended the implementation of these allocations before they
were set to begin. In December 2014, the FHFA lifted its suspension of the GSEs’ allocation and
directed the GSEs to begin setting aside funds.
Based on their calendar year 2020 activities, the GSEs’ transferred $382.7 million to the CDFI
Fund in February 2021 for the CMF Program. The GSEs’ have a FY end of December 31. As a
result, in Q1 of FY 2021, the CDFI Fund accrued revenue of $127.8 million in anticipation of the
fees received in February 2021. An accrual of $310.5 million was made in anticipation of
collections in FY 2022 for fees estimated through September 30, 2021.
Based on their calendar year 2019 activities, the GSEs’ transferred $175.8 million to the CDFI
Fund in February 2020 for the CMF Program. The GSEs’ have a FY end of December 31. As a
result, in Q1 of FY 2020, the CDFI Fund accrued revenue of $54.4 million in anticipation of the
fees received in February 2020. An accrual of $254.9 million was made in anticipation of
collections in FY 2021 for fees estimated through September 30, 2020.
The Cumulative Results of Operations – Capital Magnet Fund, on the Statements of Financial
Position, is composed entirely of restricted funds from collection of GSEs fees. Under federal
statute, these funds have been specifically identified and are only designated for activities, benefits,
or purposes of the CMF. Administrative expenses are covered by the GSE fees collected, and, as
per the federal statute, amounts in the CMF shall be available to the Secretary to carry out a
competitive grant program.
(14) Administrative Expenses
Administrative expenses consist of the following for the FYs ended September 30, 2021 and 2020:
(in thousands) 2021 2020
Personnel compensation and benefits $ 13,797 $ 13,857
Travel - 36
Rent, communication, utilities and miscellaneous charges 1,234 583
Contractual services with other agencies 5,965 6,075
Contractual services with non-federal parties 6,609 9,221
Information technology systems maintenance 740 582
Amortization 2,742 1,947
Supplies and printing 8 18
Total $ 31,095 $ 32,319
92
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2021 and 2020
(15) Related Party Transactions
The CDFI Fund recognizes Interagency Agreements (IAAs) with the Treasury as related party
transactions. For the FYs ended September 30, 2021 and 2020, these related party expenses
amounted to $7.1 and $6.0 million, respectively.
Expenses were recorded as follows: IAAs with Departmental Offices for financial management
services, conference and events, postage, human resources services, and Treasury’s Franchise Fund
Shared Services Program for shared IT services, building rent and guards in the amount of $3.8
million and $2.7 million for FYs 2021 and 2020, respectively. An IAA with the Bureau of the
Fiscal Service for accounting services, e-Travel and Procurement in the amount of $1.3 million for
FYs 2021 and 2020. An IAA with Alcohol and Tobacco Tax and Trade Bureau for IT services in
the amount of $2.0 million for FYs 2021 and 2020.
(16) Subsequent Events
The CDFI Fund has evaluated subsequent events from the date of statements of financial position
through December 15, 2021, the date at which the financial statements were available to be issued,
and determined there are no other items to disclose.
93
Appendix: Glossary of Acronyms
A
ACR – Annual Certification and Data Collection Report
AFR – Agency Financial Report
AICPA – American Institute of Certified Public Accountants
AMIS – Awards Management Information System
ARM Framework – Assessment and Risk Management Framework
ASC – Accounting Standards Codification
ASU – Accounting Standards Update
B
Base-FA – Base Financial Assistance
BEA Program – Bank Enterprise Award Program
BNSCI – Building Native CDFIs’ Sustainability and Impact
C
CDE – Community Development Entity
CDFI – Community Development Financial Institution
CDFI BGP – CDFI Bond Guarantee Program
CDFI Fund – Community Development Financial Institutions Fund
CDFI Program – Community Development Financial Institutions Program
CDFI RRP – CDFI Rapid Response Program
CLTR - Certification Transaction Level Report
CMF – Capital Magnet Fund
CRA – Community Reinvestment Act
CSRS – Civil Service Retirement System
CTLR – Certification Transaction Level Report
CY – Calendar Year
D
DF-FA – Disability Funds – Financial Assistance
E
EMC – Economic Mobility Corps
F
FA – Financial Assistance
Fannie Mae – Federal National Mortgage Association
FASAB – Federal Accounting Standards Advisory Board
FASB – Financial Accounting Standards Board
FDIC – Federal Deposit Insurance Corporation
FERS – Federal Employees Retirement System
FFB – Federal Financing Bank
FHFA – Federal Housing Finance Agency
Freddie Mac – Federal Home Loan Mortgage Corporation
FY – Fiscal Year
94
G
GAAP – Generally Accepted Accounting Principals
GSE – Government Sponsored Entity
H
HERA – Housing and Economic Recovery Act
HFFI – Healthy Food Financing Initiative
HFFI-FA – Healthy Food Financing Initiative – Financial Assistance
I
IAA – Interagency Agreement
IRS – Internal Revenue Service
IT – Information Technology
L
LLRs – Loan Loss Reserves
N
NACA Program – Native American CDFI Assistance Program
NMTC – New Markets Tax Credit
NMTC Program – New Markets Tax Credit Program
NRE – Non Real Estate
O
OMB – Office of Management and Budget
P
P.L. – Public Law
PPC-FA – Persistent Poverty County-Financial Assistance
PPC - Persistent Poverty County
Q
QALICB – Qualified Active Low-Income Community Business
QEI – Qualified Equity Investment
QLICI – Qualified Low-Income Community Investment
R
RE- Real Estate
Riegle Act – Riegle Community Development and Regulatory Improvement Act of 1994
S
SDL Program – Small Dollar Loan Program
SECA – Small and Emerging CDFI Assistance
SFFAS – Statements of Federal Financial Accounting Standards
T
TA – Technical Assistance
TDR – Troubled Debt Restructuring
Title VI – Title VI of the Civil Rights Act
95
TLR – Transaction Level Report
TSP – Thrift Savings Plan
96
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