Department of the Treasury OIG OIG-23-006 (FINANCIAL MANAGEMENT: Audit of the Community Development Financial Institutions Fund’s Financial Statements for Fiscal Y)
Summary
Audit Report OIG-23-006 of the Office of Inspector General, Department of the Treasury, dated November 14, 2022, on the audit of the Community Development Financial Institutions Fund's financial statements for Fiscal Years 2022 and 2021. A memorandum from Ade O. Bankole, 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 since its inception in 1994 the CDFI Fund has provided more than $5.5 billion through monetary award programs and helped build the capacity of more than 1,380 Certified CDFIs.
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Audit Report
OIG-23-006
FINANCIAL MANAGEMENT
Audit of the Community Development Financial
Institutions Fund’s Financial Statements for Fiscal Years
2022 and 2021
November 14, 2022
Office of Inspector General
Department of the Treasury
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DEPARTMENT OF THE TREASURY
WASHINGTON, D. C. 20220
November 14, 2022
OFFICE OF
INSPECTOR GENERAL
MEMORANDUM FOR JODIE HARRIS, DIRECTOR
COMMUNITY DEVELOPMENT FINANCIAL
INSTITUTIONS FUND
FROM: Ade O. Bankole /s/
Director, Financial Statement Audits
SUBJECT: Audit of the Community Development Financial Institutions
Fund’s Financial Statements for Fiscal Years 2022 and 2021
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, 2022 and 2021, 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. 22-01, 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 November 14, 2022,
and the conclusions expressed therein. However, our review disclosed no instances
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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 2022
Community Development Financial Institutions Fund
U.S. Department of the Treasury
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TABLE OF CONTENTS
Message from the Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Program Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Bank Enterprise Award Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Capital Magnet Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
CDFI Bond Guarantee Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CDFI Equitable Recovery Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
CDFI Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CDFI Rapid Response Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Economic Mobility Corps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Native Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
New Markets Tax Credit Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Small Dollar Loan Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Administrative Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Status of Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Financial Statement and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Appendix: Glossary of Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
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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.
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MESSAGE FROM THE DIRECTOR
I am pleased to present the fiscal year (FY) 2022 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 $5.5 billion through a variety of
monetary award programs, $66.0 billion in tax credits through the New Markets Tax Credit
Program and has guaranteed more than $2.1 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 1,380
Certified CDFIs, which are located in all 50 states as well as in the District of Columbia, Guam, and
Puerto Rico.
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.
As the country continues to recover from the economic impacts of the COVID-19 pandemic, these
Certified CDFIs are on the front lines responding to the needs of these very communities. In fact,
since the start of the pandemic, initial reporting shows that CDFI Rapid Response Program and
Financial Assistance recipients combined have reported lending or investing more than $90
billion.
In FY 2022, requests for the CDFI Fund’s awards continued to exceed the supply of resources for
almost every one of our programs, demonstrating strong applicant demand. This year, more than
40% of all Certified CDFIs applied for Financial Assistance or Technical Assistance funding, making
it the largest number of organizations ever to apply to a single round of the CDFI Program and
NACA Program.
FY 2022 CDFI Fund Programs - Program Demand
Awards
Program
Requested Available
Bank Enterprise Award Program 1 N/A $35.0 million
Capital Magnet Fund 2 N/A $331.1 million
CDFI Bond Guarantee Program $705.0 million $355.0 million
1 The CDFI Fund plans to accept applications for a joint FY 2022 and FY 2023 BEA Program application round in spring 2023.
2 The CDFI Fund anticipates opening the FY 2022 round of the CMF in January 2023.
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CDFI Equitable Recovery Program $7.7 billion $1.7 billion
CDFI Program - Base-Financial Assistance and Technical $411.0 million $140.9 million
Assistance
CDFI Program and NACA Program - Disability Funds- $9.5 million $10.0 million
Financial Assistance
CDFI Program and NACA Program - Healthy Food Financing $59.0 million $23.0 million
Initiative-Financial Assistance
CDFI Program and NACA Program - Persistent Poverty $70.1 million $21.4 million
County-Financial Assistance
Native American CDFI Assistance Program (NACA Program) $28.2 million $19.2 million
– Base Financial Assistance and Technical Assistance
New Markets Tax Credit Program 3 $14.7 billion $5.0 billion
Small Dollar Loan Program $32.1 million $11.4 million
We are humbled by and proud of the growing recognition of the vital role this nationwide
network of CDFIs, Community Development Entities, and mission-driven, community-based
organizations plays by providing critically needed capital, credit and financial services to
underserved communities trying to rebuild from the economic impacts of the events of the last
several years. And we are thankful for the continued broad bipartisan support for our programs.
The increased resources the CDFI Fund received this year has enabled us to our make the largest
awards under two of our programs. In June, we announced over $336.4 million in awards under
the Capital Magnet Fund – almost double the amount of awards announced last year. And in
September, we announced the approval of $355 million in bond issuances, the largest ever under
the CDFI Bond Guarantee Program.
In addition to administering our suite of programs, the CDFI Fund also advanced several key
administrative and program initiatives to maximize its impact, efficiency, and accessibility this
year. These included:
• Opening the funding round for the CDFI Equitable Recovery Program (CDFI ERP) –
authorized by the Consolidated Appropriations Act, 2021 (P.L. 116-260) – which will
provide $1.75 billion in grants to CDFIs to support lending and investment activities in
low- or moderate-income communities disproportionately impacted by the COVID-19
pandemic. The program also enables CDFIs to build capacity by acquiring technology,
staff, and other tools necessary to plan and execute the activities under a CDFI ERP
3 Numbers reflect the calendar year (CY) 2021 round of the program, which opened on November 4, 2021. The CDFI Fund expects to announce the
awards in the first quarter of FY 2023.
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award.
• Launching the New Markets Tax Credit (NMTC) Native Initiative, which is an effort to
increase NMTC investment in NMTC Native Areas 4. This initiative will include a review
of existing community and economic development research related to NMTC Native
Areas, the administration of a survey to participants in past NMTC investments in
NMTC Native Areas. The research and survey findings will be used to develop a Self-
Assessment Guide, case studies, and training materials for technical workshops. The
technical workshops will be targeted to Community Development Entities that are
Native owned or controlled, Native CDFIs, and other tribal entities that focus on
investing in NMTC Native Areas.
• Advancing our efforts to revise the CDFI Certification Application and Annual
Certification and Data Collection Report (ACR), as well as updating our methods for
collecting transactional level data from Certified CDFIs. In designing the new
Application, we were purposeful in setting high standards for mission, responsible
products and services, accountability, conduct, and performance.
As we continued to further our work to support the nationwide network of CDFIs, Community
Development Entities, and mission-driven, community-based organizations working on the front
lines, we reflect with pride on the significant progress we have made this year to support
underserved communities march toward equitable prosperity.
The accomplishments outlined in this report would not have been possible were it not for the
hard work, dedicated service, and professionalism of the CDFI Fund staff—to whom I am forever
grateful.
Jodie Harris
Director
Community Development Financial Institutions Fund
November 14, 2022
4 Federal Indian Reservations, Off-Reservation Trust Lands, Hawaiian Home Lands, and Alaska Native Village Statistical Areas, are collectively
referred to as NMTC Native Areas.
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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 where it is
needed most.
People and communities with limited access to financial services and products lack the 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 2022:
• 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 Certified CDFIs.
• Capital Magnet Fund (CMF) – Provides awards to Certified 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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• CDFI Equitable Recovery Program (CDFI ERP) – Provides grants to Certified CDFIs to
expand lending in Low- and Moderate-Income communities and to people
disproportionately impacted by the COVID-19 pandemic. Also enables Certified CDFIs to
build organizational capacity to accomplish their objectives for a CDFI ERP award. The
program consists of a single application round conducted during FY 2022 and FY 2023.
• 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 conducted in FY 2021 that provided grants for CDFIs to deliver
emergency support to distressed and underserved communities suffering from COVID-19
pandemic-related hardship.
• 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 funds in low-income communities.
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• Small Dollar Loan Program (SDL Program) – Provides Loan Loss Reserve and Technical
Assistance grants to help Certified CDFIs offer fair and affordable small dollar loan
products in communities 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.
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 are attuned to the needs of local residents
and businesses and their work reflects a participatory approach to community investment and
revitalization.
Today, there are 1,380 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 financial 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.
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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.
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 1,380 Certified CDFIs as of September 30, 2022)
1%
10%
573 Loan Funds
472 Credit Unions
13%
42%
177 Banks or Thrifts
143 Depository Institution
Holding Companies
15 Venture Capital Funds
34%
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.
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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.
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 nearly $247.0 billion in total assets and
that total liabilities of $214.2 billion. Net worth for the CDFI industry is nearly $33.9 billion. 5
Asset Size of ACR Reporting CDFIs by Institution Type 6
CDFI Institution Number of Sum of Total Share of Total Average of Total Median of Total
Type Institutions Assets ($) Assets (%) Assets ($) Assets ($)
by Type
Bank/Thrift 124 $66,145,839,000 26.8% $533,434,185 $330,005,500
Credit Union 285 $148,824,922,315 60.3% $522,192,710 $142,969,311
Loan Fund 510 $31,727,551,237 12.8% $62,210,885 $12,087,356
Venture Capital
Fund 13 $286,913,298 0.1% $22,070,254 $8,588,508
5 Data from the 2021 reporting round of the Annual Certification and Data Collection Report.
6 The dollar amounts reported above are based on ACR data submitted for the 2021 reporting cycle by all certified CDFIs required to submit a 2021
ACR. CDFIs certified in 2021 or later were not required to submit a 2021 ACR. The data universe consisted of 1,063 2021 ACR records in the CDFI
Fund ACR database as of October 3, 2022. After data cleaning standards were applied, final data analysis was conducted using the 2021 ACR
records of 1,020 certified CDFIs. Eighty-eight 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.
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Total 932 $246,985,225,850 100.0% $265,005,607 $41,822,274
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
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 types of businesses, including small businesses.
Examples of past investments include 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
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.
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Organization
The organization chart below shows how the CDFI Fund is structured to best support the active
programs it administered in FY 2022.
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:
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• two officers of existing CDFIs;
• two officers of insured depository institutions;
• two officers of national consumer or public interest organizations;
• 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 nine private citizens of the Advisory Board select, by majority vote, the Chairperson of the
Advisory Board.
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 obligated over two fiscal years 7.
• Administrative funds, which are used to cover the costs to administer all the CDFI Fund’s
programs, including the NMTC Program and the CDFI Bond Guarantee Program, must be
obligated during the fiscal year for which they are appropriated.
In FY 2022, Congress appropriated the CDFI Fund $295 million through the annual appropriations
process. Congress also provided a supplemental appropriation of an additional $3 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 2022 FY 2021
Appropriations
Amount Percent Amount Percent
Annual Appropriations:
7 The CDFI Equitable Recovery Program received appropriations in FY 2021 through the Consolidated Appropriations Act of 2021 (P. L. 116-260).
These funds have no expiration date. The program round opened in FY 2022 and awards will be awarded in FY 2023.
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- BEA Program $35.0 11.8% $26.0 9.6%
- CDFI Program $194.4 8 65.9% $188.0 69.6%
- Economic Mobility Corps $2.0 0.7% $2.0 0.7%
- Native Initiatives $21.5 7.3% $16.5 6.1%
- Small Dollar Loan Program $8.5 2.9% $8.5 3.2%
- Administrative Cost $33.6 11.4% $29.0 10.7%
Total Annual Appropriations $295.0 100.0% $270.0 100.0%
FY 2022 FY 2021
Appropriations
Amount Percent Amount Percent
Supplemental Appropriations:
- CDFI Rapid Response Program 9 - - $1,250.0 41.7%
- CDFI Equitable Recovery
- - $1,750.0 58.3%
Program
Total Supplemental Appropriations - - $3,000.0 100.0%
Total Amounts Funded $295.0 100.0% $3,270.0 100.0%
Less Amounts Not Obligated10 $231.0 $1,964.5
Total Funding Used $64.0 21.7% 11 $1,305.5 39.9%
Appropriations include fiscal year budget authority, and the amount available each 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 bond guarantees.
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, the Federal National Mortgage Association (Fannie Mae) and the Federal
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 2021, 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.
In FY 2022, the CDFI Fund did not obligate $231 million, which included $172.5 million of the CDFI Program, $35.0 million of the Bank Enterprise
Award Program, $20.1 million of the Native Initiatives, $2.0 million of the Economic Mobility Corps, and $1.4 million of Administrative funding.
11 The percentage of total Annual Appropriations used (excluding Supplemental Appropriations) is 21.7%.
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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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 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 during the annual appropriation process.
Sources of CDFI Fund Funding
(Amounts in Millions)
FY 2022 FY 2021
Budgetary Appropriations $295.0 $3,270.0
Prior Year Amounts De-obligated,
Used to Fund Current Year Obligations $0.8 $0.4
Carryover from Prior Year $1,964.1 $8.5
No-Year Funds $5.2 $2.2
Borrowing Authority Used $103.0 $111.4
Total Sources of Funds $2,368.1 $3,392.5
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PROGRAM DISCUSSION AND ANALYSIS
The Community Development Financial Institutions Fund
The CDFI Fund’s Programs
In FY 2022, the CDFI Fund administered ten 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 Program
• CDFI Bond Guarantee Program
• CDFI Equitable Recovery 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.
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Bank Enterprise Award Program
Established in 1994, the BEA Program recognizes and seeks to expand the important role that
traditional banks and thrifts play in community development.
How It Works
Purpose
The Bank Enterprise Award Program (BEA Program) provides monetary awards to FDIC-insured
banks and thrifts that demonstrate increased investments and support to CDFIs or increased
lending, investing, or service-related activities in the most economically distressed communities.
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. 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 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.
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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
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 26 rounds of the
program and has awarded nearly $572 million.
FY 2022 Activities
In FY 2022, the CDFI Fund completed the FY 2021 round of the BEA Program. The round opened
on October 13, 2021, and awards were announced on April 6, 2022. The demand for FY 2021 BEA
Program awards significantly exceeded the resources available for the round:
• 161 applicants submitted applications requesting more than $288 million in awards.
• 158 applicants received awards totaling $26 million.
• The award recipients were located in 23 states and the District of Columbia.
Of the 158 depository institutions awarded funding, 94 committed to investing approximately
$2.94 million, or 11.3% of total FY 2021 appropriated funds, in Persistent Poverty Counties, which
exceeds the Congressional mandate of 10%. Persistent Poverty Counties, per Congressional
guidance, are those counties that have experienced poverty rates of at least 20% over the past 30
years as measured by the 2011–2015 five-year data series available from the American
Community Survey of the U.S. Census Bureau.
The CDFI Fund plans to accept applications for a joint FY 2022 and FY 2023 BEA Program
application round in spring 2023.
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BEA Program Impact
During the past six rounds of the BEA Program, from FY 2016 through FY 2021, award recipients:
• increased their investments, lending, and technical assistance to Certified CDFIs by $280.8
million;
• increased their lending and direct investments in distressed communities by more than
$3.2 billion; and
• increased the provision of financial services in distressed communities by $257.0 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 (GSEs)—
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 the affordable housing needs of 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 ensures 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 seven rounds of the
program and has awarded grants totaling nearly $1.1 billion.
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 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 the FY 2017 through FY 2021 program rounds.
FY 2022 Activities
In FY 2022, the CDFI Fund completed the seventh round in the program’s history, using the FY
2021 allocation from the GSEs to the CMF.
The CDFI Fund opened the FY 2021 round on September 9, 2021, and announced the awards on
June 22, 2022. The demand for CMF awards significantly exceeded the resources available for the
round:
• 146 applicants requested more than $991.8 million in awards.
• 59 applicants received $336.4 13 million in awards.
The 59 FY 2021 award recipients will serve 47 states, the District of Columbia, and Puerto Rico.
Based on the award recipients’ projections, the FY 2021 will leverage an estimated $12.4 billion in
public and private investment. The award recipients plan to develop more than 41,100 affordable
housing units, which includes more than 38,700 rental units and more than 2,400
homeownership units. Of these:
13 Of the $382.7 million received from the CY 2020 GSE allocation, $ 336.4 million was awarded in FY 2021 and the remaining unobligated funds
roll forward and are available to award in subsequent CMF funding rounds.
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• 97% of all housing units will be developed for Low-Income families (80% of the Area
Median Income or below);
• 88% 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 anticipates opening the FY 2022 round of the CMF in January 2023, with
approximately $333.1 million available to award.
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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 2022 14, to date 15:
• approximately $338.9 million of CMF funding has been committed to projects currently
under development or under construction that are estimated to generate $16.8 billion in
eligible project costs (leverage plus the CMF Award); and
• $285.8 million of CMF funding has been fully disbursed to projects that have been
completed, generating $8.1 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 $326.5 million projected to result in over 52,000
eligible units;
• homeownership unit commitments totaling $7 million projected to result in 181 eligible
units; and
• economic development commitments totaling $5.2 million for 12 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:
• 63% 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);
• 98% of the homeownership units will be affordable for Low-Income persons (80% of the
Area Median Income or below); and
14 FY 2021 Awards were announced on June 22, 2022. The FY 2021 award recipients did not yet begin reporting during FY 2022.
15 CMF Impact Data is current as of August 15, 2022.
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• 76% of units will be located in High Housing Need Areas 16 or Areas of Economic
Distress17. 18
These projects are expected to leverage $16.4 billion, including $11.9 billion in private capital.
As of the end of FY 2021, projects completed by FY 2016 - FY 2020 award recipients include:
• rental housing disbursements totaling approximately $246.6 million to finance or support
37,650 eligible units;
• homeownership disbursements totaling $37.2 million to finance over 5,500 eligible units;
and
• economic development disbursements totaling $2.0 million for five facilities, such as
community-serving businesses and health care and other community facilities.
These projects have leveraged $7.9 billion, including $6.7 billion in private capital.
Award recipients from FY 2016 to FY 2021 reported that:
• 65% 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
• 63% of all units are located in High Housing Need Areas or Areas of Economic Distress.19
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
16 A High Housing Need Area is a census tract that either (a) has Very Low-Income renters paying more than half their income for rent, (b) are high
poverty neighborhoods with high vacancy, or (c) are Underserved Rural Areas as defined in §1807.104.
17 An Area of Economic Distress is a census tract: (a) Where at least 20% of households that are Very Low-Income (50% of AMI or below) spend
more than half of their income on housing; or (b) that are designated Qualified Opportunity Zones under 26 U.S.C 1400Z–1; or (c) that are Low-
Income Housing Tax Credit Qualified Census Tracts; or (d) where greater than 20% of households have incomes below the poverty rate and the
rental vacancy rate is at least 10%; or (e) where greater than 20% of the households have incomes below the poverty rate and the homeownership
vacancy rate is at least 10%; or (f) are Underserved Rural Areas as defined in the CMF Interim Rule (as amended February 8, 2016; 12 CFR part
1807).
18 High Housing Need designation is utilized for FY 2016; and Areas of Economic Distress designation for FY 2017-2020.
19 High Housing Need designation is utilized for FY 2016, and Areas of Economic Distress designation for FY 2017-2020.
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• 20 facilities, such as community-serving businesses and health care and other community
facilities, 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.
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) 20 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 Eligible CDFIs. Each bond issue is currently required to be a minimum
size of $100 million. CDFIs can borrow long-term capital for large-scale community development
projects, including but not limited to the development of small businesses, commercial real
20 The Federal Financing Bank (FFB) is a government corporation under the general supervision and direction of the Secretary of the Treasury. The
Congress created FFB in 1973, at the request of the U.S. Department of the Treasury (Treasury). FFB borrows from Treasury and lends to Federal
agencies and to private entities that have Federal guarantees.
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estate, rental housing units, charter schools, day care or health care centers, owner-occupied
homes, 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
ten rounds of the program and has guaranteed more than $2.1 billion in bonds. CDFIs have up to
five years to deploy committed funds. Through September 30, 2022, participating CDFIs have
deployed approximately $1.4 billion in loans and currently have $1.1 billion in outstanding loan
balances with the FFB.
FY 2022 Activities
The FY 2022 round opened on February 25, 2022, with up to $500 million in bond guarantee
authority available to CDFIs. The application period closed on April 26, 2022. A total of $705
million was requested from the applications received. The CDFI Fund announced the approval of
$355.0 million in bond issuances on September 30, 2022.
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CDFI Bond Guarantee Program Impact
The CDFI Bond Guarantee Program has provided long-term, fixed-rate capital for a wide range of
projects in low-income urban, rural, and Native communities throughout the nation.
CDFI Bond Guarantee Program
Disbursements by Asset Class as of September 30, 2022
Geography
Since Inception Proposed Disbursements (Based on YTD
Asset Class
Disbursements ($millions) ($millions) Disbursements)
AZ, CA, CO, CT, DC, FL, GA,
Charter Schools $426.9 $449.1 HI, IL, MD, MI, MN,NC, NJ,
NM,NV NY, OH, PA
AL, AZ, CA, DC, FL, GA, IL,
KY, LA, MA, MD, MO, MN,
Rental Housing $414.3 $463.3 NC, NJ, NM, NV, NY, OH,
OR, PA, TN, TX, WI, WV,
UT
$346.9 AZ, CA, IL, LA, MA, NJ, NC,
Commercial Real Estate $261.8
NV, NY, OK, OR, PA21
CT, IL MA, MD, NJ, NM, KY,
CDFI to Financing Entity22 $111.7 $134.1
PA, RI
Healthcare Facilities $65.1 $122.2 CA, DC, IL, KY, NC, NY
Not-for-Profit AZ, CA, FL, KY, MI, NM, NJ,
$61.3 $117
Organizations NV, NY, PA, TN
Senior Living and Long
$16.4 $63.1 CA
Term Care
Small Business $42.5 $61.8 AZ, CO, FL,KY, MA, PA
Daycare Centers $12 $34.5 KY, NY
Totals $1,412.0 $1,792.0 30
21 Tribal Communities in NV and OK.
22 Owner Occupied Homes 98.7% and Commercial Real Estate 1.3%.
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CDFI Equitable Recovery Program
The CDFI Equitable Recovery Program (CDFI ERP) is a newly launched program that supports
Certified CDFIs’ lending and investment activities in low- or moderate-income communities
disproportionately impacted by the COVID-19 pandemic. The program also enables CDFIs to build
capacity by acquiring technology, staff, and other tools necessary to plan and execute the
activities under a CDFI ERP award.
How It Works
Purpose
The Consolidated Appropriations Act, 2021 (P.L. 116-260) provided $1.75 billion to the CDFI Fund
to award CDFIs grants to respond to the economic impacts of the COVID-19 pandemic. Awards
provided to CDFIs are to expand lending, grant making, and investment activity in low- or
moderate-income communities and to borrowers, including minorities, that have significant
unmet capital or financial service needs and were disproportionately impacted by the COVID-19
pandemic; and to enable CDFIs to build organizational capacity and acquire technology, staff and
other tools necessary to accomplish these activities. The CDFI Fund will be awarding these funds
through the newly established CDFI ERP.
Award Process
To be eligible to apply for a CDFI ERP award, an organization must be a Certified CDFI with a
history of serving CDFI ERP Eligible Geographies and meet certain financial management criteria.
Organizations must be in compliance with all outstanding CDFI awards, allocations, or bond
guarantee requirements, and meet set benchmarks for sound programmatic/financial safety.
CDFI ERP Eligible Geographies are those areas that meet at least one of the following two criteria:
they are census tracts that have the following three characteristics: (1) severe impact from
COVID-19 pandemic; (2) Low- or Moderate- Income Census Tract(s) 23; and (3) are CDFI
Investment areas; or they are Native areas.
Areas of consideration include all 50 states, the District of Columbia, Puerto Rico, American
Samoa, Guam, Northern Mariana Islands, and the U.S. Virgin Islands.
The CDFI Fund provided an extensive list of guides, two sets of Frequently Asked Questions, and
three application webinars to assist applicants in applying for grants under this program.
FY 2022 Activities
The application round for the FY 2022 CDFI ERP opened on June 23, 2022, and closed on
September 22, 2022. Following a thorough application review process, the CDFI Fund intends to
announce awards in early 2023.
23 Low- or Moderate- Income Census Tracts have a median income of less than 120% Area Median Income.
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CDFI Equitable Recovery Program Impact
The FY 2022 CDFI ERP awards will enable Certified CDFIs to address the economic impacts of the
COVID-19 pandemic on Low- and Moderate-income communities. Organizations that receive
funds through the CDFI ERP are required to deploy their grants within five years and meet
performance and reporting requirements. Because the FY 2022 round of the program application
period closed in late September, no award or impact data is available for this report.
CDFI ERP awards will help address economic impacts of the COVID-19 pandemic such as, but not
limited to job loss, disruptions in health and mental health care, disruptions in child care,
increased housing instability, decreased availability of and increased cost of affordable housing
and home ownership financing, exacerbated inaccessibility to broadband services, increase food
insufficiency, and disruptions in operations for small businesses, small farms, and nonprofit
organizations.
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).
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:
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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 (except Native CDFIs24) 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). 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.
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.
24 Per the Indian Community Economic Enhancement Act of 2020 (P.L. 116-261), Native CDFIs that apply for Core-FA under the CDFI Program are
no longer required to submit Matching Funds.
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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 can 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
grants to serve current target markets in new ways or to enhance the efficiency of their
operations.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
Awards Since Inception
Since the inception of the CDFI Program in 1994, the CDFI Fund has completed 26 rounds of the
program and has awarded FA awards and TA awards totaling nearly $2.9 billion.
In addition, since inception the CDFI Fund has awarded 130 HFFI-FA awards totaling nearly $246.3
million and 63 DF-FA awards totaling over $18.2 million.
FY 2022 Activities
The CDFI Fund opened the FY 2022 award round of the CDFI Program on February 11, 2022. The
FY 2022 application period closed on April 12, 2022. The CDFI Fund announced the FY 2022 TA
awards on September 26, 2022, and expects to announce the FY 2022 FA awards before the end
of the first quarter of CY 2023.
The demand for awards significantly exceeded the resources available for the awards:
• 429 organizations requested $380.9 million in CDFI Program Base-FA awards.
• 242 organizations requested $30.1 million in TA awards; 218 organizations received $27.6
million in TA awards 25.
The demand for PPC-FA, DF-FA, and HFFI-FA awards was:
• 222 organizations requested $65.9 million in PPC-FA awards.
• 19 organizations requested $9.5 million in DF-FA awards (CDFI Program and NACA
Program combined).
• 15 organizations requested $59 million in HFFI-FA awards (CDFI Program and NACA
Program combined).
25 This includes 202 TA awards totaling $25.2 million under the CDFI Program and 16 TA awards totaling $2.4 million under the NACA Program.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
CDFI Program Impact
In FY 2022, CDFI Program award recipients reported originating loans or investments totaling
more than $38.0 billion, based on their portfolio of activities in 2021. This includes, but is not
limited to:
• $12.2 billion for consumer loans;
• $9.8 billion for home improvement and home purchase loans;
• $6.9 billion for business and microenterprise loans; and
• $3.7 billion for residential real estate transactions.
In addition, recipients financed nearly 54,000 affordable housing units.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
The FY 2022 performance results reported in the table below reflect program outcomes and
activities for 2021 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 2022
(Based on Program Activities Reported in 2021)
Lending and Investing Activity Amount
Amount of Total Loans/Investments Originated $38,039,491,227
Number of Total Loans/Investments Originated 999,586
Business and Microenterprise Originations $6,897,677,160
Number of Originations 111,795
Consumer Originations $12,209,581,413
Number of Originations 792,277
Home Improvement and Home Purchase Originations $9,780,829,252
Number of Originations 70,995
Residential Real Estate Originations $3,719,060,052
Number of Originations 7,354
Commercial Real Estate Originations $4,199,452,871
Number of Originations 5,623
All Other Originations $1,232,890,479
Number of Originations 11,542
Affordable Housing Units Financed 53,836
Rental Units 50,574
Owner Units 3,262
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Businesses Financed 101,384
Notes: Consumer loan data for banks and credit unions who are joint CDFI-FA and RRP Award Recipients is included in the table above.
CDFI Program cumulative impact data is reported in the table below for FY 2010 to FY 2022 based
on recipients’ activities in 2009 to 2021.
Cumulative Performance Report of CDFI Program Award Recipients for FYs 2010 to 2022
(Based on Program Activities Reported from 2009 to 2021)
Lending and Investing Activity (includes late reporters not included in FY2021 AFR) Amount
Amount of Total Loans/Investments Originated $170,635,052,731
Number of Total Loans/Investments Originated 15,013,654
Business and Microenterprise Originations $31,884,291,524
Number of Originations 727,614
Consumer Originations $53,771,756,478
Number of Originations 13,806,160
Home Improvement and Home Purchase Originations $41,422,239,753
Number of Originations 355,208
Residential Real Estate Originations $18,615,932,465
Number of Originations 38,911
Commercial Real Estate Originations $19,389,872,591
Number of Originations 27,456
All Other Originations $5,550,959,920
Number of Originations 58,305
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Affordable Housing Units Financed 425,910
Rental Units 390,854
Owner Units 35,056
Businesses Financed 584,873
Notes: Consumer loan data for banks and credit unions who are joint CDFI-FA and RRP Award Recipients is included in the table above.
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 $353.8 million. There were retail investments
totaling close to $275.7 million that developed over 3.8 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 nearly $78.2 million
in projects involving production and distribution, which developed more than 18.3 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 2022
(Based on Program Activities Reported from 2012 to 2021)
Amount of Total Loans/Investments Originated $353,841,423
Number of Total Loans/Investments Originated 654
Number of Projects 457
Number of Award Recipients Reported 43
HFFI Retail Investments
Amount of Retail Loans/Investments $275,666,028
Number of Retail Loans/Investments 366
HFFI Non-Retail Investments
Amount of Non-Retail Loans/Investments $78,175,395
Number of Non-Retail Loans/Investments 288
HFFI Square Footage - Project Level
Square Footage of New Retail Healthy Food Outlets 3,840,521
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Square Footage of New Non-Retail Healthy Food Outlets 18,279,925
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 $1.25 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 awarded these grants to Certified CDFIs
through the CDFI RRP.
The CDFI RRP differed from the CDFI Fund’s other funding programs in two important ways.
First, unlike the CDFI Fund’s other programs, the CDFI RRP consisted 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 was 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 was
$200,000, and the maximum amount was $1.8 million. The legislation authorizing the program
stipulated that at least $25 million of the more than $1.2 billion awarded through the program be
used to benefit Native Communities.
Only organizations that the CDFI Fund had certified as CDFIs were eligible to apply. An applicant
could 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 was 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 2022 Activities
There was no CDFI-RRP Funding round during FY 2022. Currently, all CDFI-RRP Recipients are
executing the requirements pursuant to their Assistance Agreements and are still actively
reporting on their uses of the award as well as their progress toward meeting any applicable
Performance Goals.
Program Impact
In FY 2022, CDFI RRP award recipients reported originating loans or investments totaling more
than $14.8 billion, based on their portfolio of activities in 2021. This includes, but is not limited to:
• $5.5 billion for consumer loans;
• $3.1 billion for home improvement and home purchase loans;
• $2.1 billion for business and microenterprise loans; and
• $1.3 billion for residential real estate transactions.
In addition, recipients financed close to 11,500 affordable housing units.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
The FY 2022 performance results reported in the table below reflect program outcomes and
activities for 2021 and are based on information entered into the CDFI Fund’s performance
reporting system by RRP Program Award Recipients.
Annual Performance Report of RRP Program Award Recipients for FY 2022
(Based on All Activities Reported by RRP Award Recipients from 6/15/2021 to the end of each Award Recipient’s
Fiscal Year in 2021)
Lending and Investing Activity Amount
Amount of Total Loans/Investments Originated $14,832,278,622
Number of Total Loans/Investments Originated 413,604
Business and Microenterprise Originations $2,060,798,110
Number of Originations 20,098
Consumer Originations $5,548,702,119
Number of Originations 353,479
Home Improvement and Home Purchase Originations $3,059,124,796
Number of Originations 24,554
Residential Real Estate Originations $1,310,953,925
Number of Originations 5,044
Commercial Real Estate Originations $1,804,282,533
Number of Originations 3,702
All Other Originations $1,048,417,139
Number of Originations 6,727
Affordable Housing Units Financed 11,438
Rental Units 9,702
Owner Units 1,736
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Businesses Financed 19,654
Notes: For RRP reporting, the CDFI Fund required Award Recipients to report their program activities for Year 0 which began on the date of the
award announcement (June 15, 2021) and ended on the last day of their respective Fiscal Year 2021. As a result, some RRP reporting periods in
Year 0 were 15 days in length while others were closer to six months. Consumer loan data for banks and credit unions who are joint CDFI-FA
and RRP Award Recipients is excluded from the table above.
Economic Mobility Corps
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.
The program launched in FY 2021 and announced its first financial awards in August 2021.
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
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 initially authorized by the Consolidated Appropriations Act, 2020 (P.L.
116-93), which provided $2 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 Certified CDFIs and other
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The content on this page is unaudited. Please see the accompanying auditor’s report.
financial 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 Certified 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 CDFI Fund and AmeriCorps announced the awards for the inaugural round of EMC in August
2021 and awarded more than $2.5 million in grants to three organizations. 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, New York, which was awarded $992,800
per year to support 61 service members; and
• Neighborhood Housing Services of South Florida Inc., Miami, Florida, which was awarded
$171,956 per year to support 10 service members.
FY 2022 Activities
The CDFI Fund and AmeriCorps opened the FY 2022 application round of EMC on September 24,
2021, and closed the round on January 5, 2022.
The CDFI Fund and AmeriCorps hosted a live webinar to provide CDFIs and other community
development organizations with information on EMC and the application process. The webinars
took place on October 26, 2021. A recording of this webinar was posted on AmeriCorps’ website.
No organizations submitted an application for a FY 2022 EMC award. To prevent the loss of FY
2022 program funding, the CDFI Fund consulted with AmeriCorps to identify an alternative
method for deploying these funds, which were provided through the Consolidated
Appropriations Act, 2021 (P.L. 116-260) and were only available through September 30, 2022.
The CDFI Fund utilized FY 2022 EMC awards funding to fund the three inaugural EMC FY 2021
award recipients for a third year (totaling $1,342,118) at the following levels (and accompanying
service members supported by the organization’s continuation award):
• LiftFund Inc.: $119,125 supporting seven service members;
• Local Initiatives Support Corporation: $1,042,440 supporting 61 service members; and
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The content on this page is unaudited. Please see the accompanying auditor’s report.
• Neighborhood Housing Services of South Florida, Inc.:$180,554 supporting 10 service
members.
The CDFI Fund also replaced $556,416 in American Rescue Plan Act (ARP; P.L. 117-2) funds used
to support FY 2021 EMC award recipients, with $556,416 in FY 2022 EMC funds appropriated to
the CDFI Fund in the Consolidated Appropriations Act, 2021. In addition, AmeriCorps utilized
$100,000 of the FY 2022 EMC program funds to cover administrative expenses. This brings the
total disbursement of CDFI Fund resources for the FY 2022 round of EMC to $1,998,534.
Program Impact
The FY 2022 funding round of the Economic Mobility Corps awards will enable the three Certified
CDFIs that received awards to fund 78 AmeriCorps service members who will support the
Certified CDFIs’ efforts to provide continuing financial literacy, financial planning, budgeting,
saving, and other financial counseling activities in underserved areas.
Because the inaugural round of EMC awards was announced in August 2021, the award recipients
have not yet reported about the impact of the awards. 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.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
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 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.
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 19 rounds of the
program and has provided FA and TA awards totaling nearly $221.8 million, which includes PPC-
FA awards totaling more than $8.2 million.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
FY 2022 Activities
The CDFI Fund opened the FY 2022 award round of the NACA Program on February 11, 2022. The
application period closed on April 12, 2022. The CDFI Fund announced the FY 2022 TA awards on
September 26, 2022, and expects to announce the FY 2022 FA awards before the end of the first
quarter of CY 2023.
The demand for awards significantly exceeded the resources available for the awards:
• For the FY 2022 Base-FA awards 29 organizations requested $25.5 million in NACA
Program Base-FA awards.
• For the FY 2022 TA awards 19 organizations requested $2.7 million in NACA Program TA
awards; 16 organizations received more than $2.3 million.
• For the FY 2022 FA supplemental awards, 15 organizations requested $4.2 million in NACA
PPC-FA awards.
NACA Program Impact
Since the NACA Program was launched in 2001, the CDFI Fund has provided nearly $221.8 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 2022, the number of Certified Native CDFIs totaled 64.
The performance results reported by NACA Program award recipients in FY 2022 show that
Native CDFIs originated more than 7,000 loans or investments totaling $211.6 million, based on
their portfolio of activities in 2021. This includes $61.3 million in business and microenterprise
loans, $68.3 million in home improvement and home purchase loans, and $50.2 million in
consumer loans.
The Native Initiatives Program 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 2022.
Cumulative Performance Report of NACA Program Award Recipients for FYs 2010 to 2022
(Based on Program Activities Reported from 2009 to 2021)
Lending and Investing Activity (includes late reporters not included in FY2021 AFR) Amount
Amount of Total Loans/Investments Originated $2,072,849,568
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Number of Total Loans/Investments Originated 62,244
Business and Microenterprise Originations $505,152,818
Number of Originations 4,142
Consumer Originations $217,259,222
Number of Originations 46,063
Home Improvement and Home Purchase Originations $1,004,557,026
Number of Originations 7,006
Residential Real Estate Originations $49,829,921
Number of Originations 231
Commercial Real Estate Originations $33,923,029
Number of Originations 104
All Other Originations $262,127,552
Number of Originations 4,698
Affordable Housing Units Financed 164
Rental Units 139
Owner Units 25
Businesses Financed 3,346
Notes: Consumer loan data for banks and credit unions who are joint NACA-FA and RRP Award Recipients is included in the table above.
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
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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
(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 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 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 billion in tax allocation authority. This includes
$3 billion in Recovery Act Awards and $1 billion of special allocation authority used for the
recovery and redevelopment of the Gulf Opportunity Zone.
FY 2022 Activities
In FY 2022, the CDFI Fund opened the CY 2021 round of the NMTC Program on November 4,
2021, and expects to announce the awards in the first quarter of FY 2023. The demand for NMTC
allocation authority significantly exceeded the tax credits available during the round:
• 199 CDEs submitted applications requesting $14.7 billion in tax credit allocation authority.
• At least $5 billion in tax credit allocation authority is expected to be awarded.
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The content on this page is unaudited. Please see the accompanying auditor’s report.
The CDFI Fund anticipates opening the CY 2022 round of the NMTC Program in November 2022
and announcing CY 2022 allocation awards in fall 2023.
The CDFI Fund also launched its NMTC Native Initiative, which included selecting a contractor to
assist in efforts to increase NMTC investment in Federal Indian Reservations, Off-Reservation
Trust Lands, Hawaiian Home Lands, and Alaska Native Village Statistical Areas, collectively
referred to as NMTC Native Areas.
The contractor will research and analyze NMTC investments in NMTC Native Areas and review
existing community and economic development research related to NMTC Native Areas. This
research will include the administration of a survey to participants in past NMTC investments in
NMTC Native Areas. The research and survey findings will be used to develop a Self-Assessment
Guide, case studies, and training materials for technical workshops. The technical workshops will
be targeted to CDEs that are Native owned or controlled, Native CDFIs, and other tribal entities
that focus on investing in NMTC Native Areas.
NMTC Program Impact
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The content on this page is unaudited. Please see the accompanying auditor’s report.
The CDFI Fund has awarded a total of $66 billion to CDEs through the NMTC Program. As of
September 30, 2022, allocation recipients had reported raising QEIs totaling more than $63.6
billion.
In FY 2022, allocation recipients reported making more than $3.4 billion in loans and investments
in QLICIs, as shown in the table below. In addition, these investments are estimated to have
created 7,882 jobs and funded 18,658 construction-related jobs.
Of these investments, 24.2% of the dollars invested were invested in “real estate Qualified Active
Low Income Community Businesses (QALICBs)” (i.e., businesses that develop or lease real
property for use by others), 75.3% of the dollars were 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 $62.9 billion in cumulative qualified low-income community
investments, which have created 344,877 jobs and more than 512,219 construction jobs.
FY 2022 Annual & Cumulative Performance Report of NMTC Program Allocation Recipients
Annual Performance Cumulative Performance
(Based on Program Activities (Based on Program Activities
Reported in 2021) Reported in 2003 to 2021)
Total Qualified Low-Income Community $3,477,904,043 $62,933,274,056
Investments (QLICI)
Number of QLICI (TOTAL) 1,075 18,761
Real Estate Activity $840,542,040 $27,850,198,405
Number of QLICI (RE) 274 7,400
Non-Real Estate Activity $2,618,749,458 $34,145,282,687
Number of QLICI (NRE) 791 11,081
Loans/Investments Made to Other CDEs $18,612,545 $937,792,964
Number of QLICI (CDE) 10 280
Percent in Distressed Area 79.0% 77.9%
Jobs at Reporting Period End 7,882 344,877
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Projected Construction Jobs 18,658 512,219
Affordable Housing Units Financed 451 17,131
Owner Units 183 6,853
Rental Units 268 10,278
Square Feet of Commercial Real Estate 13,879,031 238,944,896
Office 3,180,998 93,836,931
Retail 1,079,969 67,745,492
Manufacturing 9,618,064 77,362,473
Businesses Financed 576 10,800
Financial Counseling and Other Services
Total Investments 438,252 5,505,447
Number of Businesses Served 21,445 130,3658
The NMTC Program catalyzes investment where investment is needed most. Over 79% of NMTC
investments reported in FY 2022 have been made in highly distressed areas. NMTC investments
are helping these communities with low median incomes and high rates of unemployment
transform into places of opportunity.
Small Dollar Loan Program
The Small Dollar Loan Program (SDL Program) 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 awarded $11.4 million during the FY 2022
funding round. The awarded amount includes $8.5 million that the CDFI Fund received to support
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the SDL Program under the Consolidated Appropriations Act, 2022 (P.L. 117-103) and $2.9 million
that is carryover funding from the FY 2021 appropriation.
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;
• have no prepayment penalty;
• report the loan payments to at least one of the consumer reporting agencies that compile
and maintain files on consumers on a nationwide basis; and
• are underwritten with standards that consider the consumer’s ability to repay.
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 to cover losses on 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;
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• Partnerships between a Certified CDFI and any Federally Insured Depository Institution
with a primary mission to serve targeted Investment Areas; and
• 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
Since the inaugural funding round of the SDL Program in 2021, the CDFI Fund has completed two
funding rounds and awarded more than $22.2 million in grants to 118 organizations.
FY 2022 Activities
The CDFI Fund opened the funding round of the SDL Program on May 16, 2022. The round closed
on July 15, 2022.
Up to $11.4 million in funding was available through the FY 2022 round of the SDL Program. The
CDFI Fund reported that 92 organizations headquartered in 36 states, the District of Columbia,
and Puerto Rico submitted applications requesting $32.1 million in funding—nearly three times
the amount of funding available.
On September 27, 2022, the CDFI Fund announced that it had awarded grants totaling more than
$11.4 million to 66 Certified CDFIs headquartered in 23 states, the District of Columbia, Guam,
and Puerto Rico through the FY 2022 round of the SDL Program. Three types of Certified CDFIs
received awards:
• 34 credit unions received awards totaling $6.6 million
• 22 loan funds received awards totaling $2.8 million; and
• 10 banks or bank holding companies received awards totaling $2.0 million.
These award recipients included thirteen minority depository institutions that received $2.9
million in awards.
Of the 66 SDL Program awards made, 17 awards totaling nearly $3.7 million—or 32.8% 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 2022 Small Dollar Loan Program awards will enable 66 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. FY 2021 and FY
2022 award recipients 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 2022
continued four key administrative initiatives to maximize its performance, efficiency, and
program results:
1. Development of revised CDFI Certification Application and related data collection devices.
2. Ongoing maintenance and enhancement of the Awards Management Information System
(AMIS).
3. Ongoing maintenance and enhancement of the CDFI Program Assessment and Risk
Management Framework (ARM Framework).
4. Enhancement of compliance monitoring and evaluation.
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. To ensure that certification criteria support the growth and reach of CDFIs, 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, and the Fund received over 500 individual comments. After
intense review of the comments, the final version of the CDFI Certification Application will be
published under the OMB 30-day public comment period in the fall of 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 the changes CDFI Fund is
proposing to the CDFI Certification Application. This will ensure that existing CDFIs are held to the
same review criteria as newly certified CDFIs.
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In addition, the CDFI Fund initially 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 to better track their target market activity. Based in part on the comments received
during the public comment period, the CDFI Fund will instead utilize with a few changes the
current Transaction Level Report (TLR) used by CDFI Program and NACA Program FA Recipients to
examine the degree to which all organizations are serving distressed and underserved
populations. The modified TLR will create a more data-driven, quantitative evaluation of Certified
CDFIs and CDFI Certification Applicants’ target market activity, and automate key processes.
Supporting the changes to the certification policies and collection of transaction level data, the
CDFI Fund will publish a list of pre-approved Target Market assessment methodologies that
Applicants and Certified CDFIs may use to demonstrate that they are serving their identified
Target Market(s) (e.g., Investment Area [IA], Low Income Targeted Population [LITP], or Other
Targeted Population [OTP]). Providing pre-approved assessment methodologies will increase
transparency and reduce burden.
Together, these three collection devices—the CDFI Certification Application, ACR, and TLR—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 more complete
picture of the impact and activity of Certified CDFIs. Having a greater sense of the CDFI industry
will help the CDFI Fund to not only build awareness, but also illustrate and evaluate the
comprehensive effects of CDFIs in distressed communities. In addition, the Fund will be able to
better assess and target financing gaps and needs, and attract new sources of capital to the CDFI
industry.
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. This cloud-based, enterprise-wide business platform
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. The CDFI Fund has
also built award recipient compliance and performance reporting 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.
Maintenance and Enhancement of the ARM Framework
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The multi-year contractor Task Order for the development of the ARM tools in AMIS wrapped up
in October 2021. Version 1.0 of the ARM tools is considered complete with various business units
working to integrate the tools into their processes during the remainder of FY22.
The ARM Framework is a suite of six tools the CDFI Fund is using to assess the financial and
programmatic risk of CDFI Program applicants and award recipients. The Framework aims to
enhance data-driven decision-making and to mitigate post-award compliance reporting risks.
ARM tools include:
• The CDFI and NACA Program Application Assessment Tool: Provides the functionality to
assess and evaluate the organizational risk of CDFI and NACA Financial Assistance awards
program applicants’ financial portfolio and management capabilities.
• 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 recipients’ 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 applicants’ 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.
In FY 2023, the CDFI Fund will commence work regarding additional enhancements to the tools,
including external data updates and any changes resulting from the implementation of the new
Certification Application, as well as revised ACR and TLR.
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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. The CDFI Fund also
ensures our award recipients and allocatees are adhering to the terms and conditions outlined in
their agreements.
In FY 2022, 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, CDFI RRP, NACA Program, NMTC Program, BEA
Program, SDL Program, and CMF Program. It also developed the compliance monitoring process
for the previously funded CDFI ERP. Although not all of these developments and enhancements
will be visible to the public, they continue to improve the experience of our Award Recipients and
Allocatees, while allowing the compliance staff to focus more on compliance analysis.
The CDFI Fund also continued to work 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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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 2022 financial statement audit, a summary of the financial
management initiatives of the CDFI Fund during FY 2022, 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 2022 Financial Statement Audit
The FY 2022 audit of the CDFI Fund’s financial statements resulted in an unmodified opinion.
FY 2022 Financial Management Oversight
Improper Payments Elimination and Recovery Improvement Act of 2012 (IPERIA)
Our FY 2022 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 2022, 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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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 2022 FY 2021 Increase / (Decrease)
Total Assets $4,119.2 $4,243.3 ($124.1)
Total Liabilities $1,257.1 $1,318.4 ($61.3)
Total Net Position $2,862.1 $2,924.9 ($62.8)
Total Revenue and Financing
$649.0 $1,823.9 ($1,174.9)
Sources
Total Expenses $645.1 $1,530.4 ($885.3)
Net Income $3.9 $293.5 ($289.6)
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Allocation of Fund Assets September 30, 2022
Assets
The decrease in assets of $124.1 million during the year was primarily attributable to the
following activities: Fund Balance with Treasury (FBwT) increased $92.7 million mainly due to an
increase in the restricted FBwT offset by a decrease in the obligated FBwT; loans receivable
decreased $59.2 million due to prepayments of loans in the CDFI Bond Guarantee Program
(CDFI BGP) offset by new loans issued in FY 2022 in the CDFI BGP and the CDFI FA Program;
Investments-Nonvoting Equity Securities, at Fair Value, decreased by $7.8 million due to net
unrealized losses; Accrued Revenue decreased by $150.2 million due to the accrual of the FY
2022 portion of GSE fees owed to the CDFI Fund (this accrual will be paid in FY 2022 to fund the
Capital Magnet Fund (CMF)).
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Fund Balance with Treasury
The FBwT reflects a $92.7 million increase. The increase is mainly attributable to an increase of
$163.1 million due to a larger amount of the Government Sponsored Enterprise (GSE) fees,
restricted funds, being received in FY 2022, net of funds disbursed compared to the prior year.
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. A decrease
of $89.7 million is due to appropriated funds that have been committed, but not yet disbursed
being less in FY 2022 than FY 2021.
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 2022, net loans decreased by $59.2 million resulting from new loans of $77.1 million
offset by CDFI BGP and direct loan principal repayments from recipients of $136.9 million and
an increase due to the change in Allowance for Doubtful Accounts of $.6 million.
Investments
The CDFI Fund currently holds two types of investments with net balances as follows:
• Non-voting equity securities - $37.1 million
• Limited partnerships - $0.9 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, 2022. Two non-voting
equity security investments had a net downward adjustment for observable price changes
totaling $7.8 million at September 30, 2022.
Accrued Revenue
Accrued revenue reflects a $150.2 million decrease in projected collections of GSE fees due to a
decrease in new business purchases for the GSEs.
Liabilities
The decrease in liabilities of $61.3 million during the year was primarily attributable to a
decrease in debt of $53.8 million and a decrease in awards payable of $7.4 million.
Debt
During FY 2022, the CDFI Fund borrowed from FFB and Treasury $80.1 million to issue new
loans, $16.7 million to fund a downward subsidy re-estimate, and $6.2 million to meet annual
interest payments to Treasury at interest rates ranging from 1.356% to 5.5%, depending on
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maturity dates and/or risk categories. The CDFI Fund’s debt was reduced by repayments of
CDFI BGP principal, upward subsidy reestimates, repayments of Direct Loan debt, and
repayments of prior year cash balances brought forward to Treasury totaling $156.8 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 of $7.4 million is a result of no payables being accrued at
September 30, 2022.
Net Position
Net position decreased during the year by $62.8 million. Net position will change during the
year as a result of the following: 1) the difference between appropriations received (net of
appropriations for subsidy reestimate, appropriations cancelled, and subsidy adjustment) and
appropriations used; and 2) net income. During FY 2022, appropriations received was $292.1
million. Appropriations used was $358.8 million resulting in a decrease in unexpended
appropriations of $66.7 million. Net position was increased by net income of $3.9 million. Net
income of $14.2 million is attributable to GSE fees collected, accrued, and expensed. The CDFI
Fund collected and accrued $248.1 million and expensed $233.9 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. A net loss of $7.9 million is attributable to a net
unrealized loss in non-voting equity securities due to a net downward adjustments for
observable price changes.
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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.
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Expenses
The change in the CDFI Fund’s operating expenses, during FY 2022 consisted of the following:
Comparison of Operating Expenses Excluding
Administrative Expenses Paid by Others
Fiscal Years 2022 and 2021
(Dollar amounts in millions)
FY 2022 FY 2021 Increase/(Decrease)
Award Expenses $559.7 $1,464.4 ($904.7)
Administrative Expenses $32.9 $31.1 $1.8
Bad Debt Expense ($0.6) ($2.5) $1.9
Total Operating Expenses $592.0 $1,493.0 ($901.0)
Award Expenses
Award expenses decreased during the year by $904.7 million due to the following activities:
RRP award expenses decreased $989.7 million and CDFI Program award expenses decreased
$5.7 million; offset by an increase in CMF award expense of $65.1 million and an increase in
BEA award expenses of $25.6 million. The change in award expenses decreased significantly
mainly due to the RRP awards, which was a new program in FY 2021 and the majority of the
award funding was expensed in FY 2021. The CDFI Program award expense decrease was due
to fewer payments being disbursed in FY 2022 than FY 2021. The change in CMF Program
award expenses was due to an increase in the total amount of award funding year over year,
which resulted in more payments being disbursed in FY 2022 than in FY 2021. The BEA
Program award expenses increased because the 2021 funding round was awarded and
disbursed in FY 2022, not in FY 2021.
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Administrative Expenses
Administrative expenses increased by $1.8 million during FY 2022 mainly due to the following
activities: personnel compensation and benefits expense increased $1.9 million, contractual
services with other agencies expense increased $1.4 million; offset by a $2.7 million decrease
in contractual services with external parties expense. Included in the FY 2022 administrative
expenses are expenses related to the Economic Mobility Corps (EMC) resulting in an increase
of $0.7 million as there was no expense activity for EMC in FY 2021.
Bad Debt Expense
Bad debt expense increased by $1.9 million as a result of a reduction to the bad debt
allowance in being less in FY 2022 than 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
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which revenue and financing sources, other than appropriations used, exceeds expenses. For
FY 2022, other expenses totaled $52.0 million, consisting of interest expense for Treasury
borrowings of $40.1 million and an unrealized loss on investments of $11.9 million. Interest
and dividend income totaled $35.6 million.
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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 Audit of the Financial Statements
Opinion
We have audited the financial statements of the Community Development Financial Institutions Fund (CDFI
Fund), which comprise the statements of financial position as of September 30, 2022 and 2021, 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.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of the Community Development Financial Institutions Fund as of September 30, 2022 and 2021, and
the results of its operations and its cash flows for the years then ended in accordance with U.S. generally
accepted accounting principles.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America (GAAS), the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, and Office of Management and Budget (OMB) Bulletin
No. 22-01, Audit Requirements for Federal Financial Statements. Our responsibilities under those standards
and OMB Bulletin No. 22-01 are further described in the Auditors’ Responsibilities for the Audit of the Financial
Statements section of our report. We are required to be independent of the CDFI Fund and to meet our other
ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Other Matter - Interactive Data
Management has elected to reference to information on websites or other forms of interactive data outside the
Agency Financial Report to provide additional information for the users of its financial statements. Such
information is not a required part of the financial statements. The information on these websites or the other
interactive data has not been subjected to any of our auditing procedures, and accordingly we do not express
an opinion or provide any assurance on it.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with U.S. generally accepted accounting principles, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or
events, considered in the aggregate, that raise substantial doubt about the CDFI Fund’s ability to continue as a
going concern for one year after the date that the financial statements are available to be issued.
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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.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our
opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not
a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and OMB
Bulletin No. 22-01 will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence
the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, Government Auditing Standards, and OMB Bulletin No. 22-
01, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit 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 CDFI Fund’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise
substantial doubt about the CDFI Fund’s ability to continue as a going concern for a reasonable period of
time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control related matters that
we identified during the audit.
Other Information
Management is responsible for the other information included in the Agency Financial Report. The other
information comprises the Table of Contents, Message from the Director, Overview, Program Discussion and
Analysis, Administrative Discussion and Analysis, Status of Financial Management, and Appendix: Glossary of
Acronyms but does not include the financial statements and our auditors’ report thereon. Our opinion on the
financial statements does not cover the other information, and we do not express an opinion or any form of
assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the financial statements, or
the other information otherwise appears to be materially misstated. If, based on the work performed, we
conclude that an uncorrected material misstatement of the other information exists, we are required to describe
it in our report.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements as of and for the year ended September 30,
2022, 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
71
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 or significant deficiencies
may exist that were not identified.
Report on 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, 2022 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. 22-01.
Purpose of the Reporting Required by Government Auditing Standards
The purpose of the communication described in the Report on Internal Control Over Financial Reporting and
the Report on Compliance and Other Matters sections 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
November 14, 2022
72
Financial Statements and Notes
73
Community Development Financial Institutions Fund
Statements of Financial Position
As of September 30, 2022 and September 30, 2021
(Dollar amounts in thousands)
2022 2021
Assets
Fund Balance with Treasury (Note 4) $ 2,709,465 $ 2,616,735
Loans Receivable, Net of Allowance for Bad Debt (Note 5) 1,199,963 1,259,228
Investment:
Investments, Secondary Capital Interests - 1,476
Investments, Nonvoting Equity Securities, at Cost 2,800 2,600
Investments, Nonvoting Equity Securities, at Fair Value (Note 6) 34,276 42,140
Investments, Limited Partnership Interests 874 704
Accrued Revenue Receivable (Note 12) 160,300 310,510
Internal-use Software, Net of Accumulated Amortization 11,027 9,476
Other Assets 450 442
Total Assets $ 4,119,155 $ 4,243,311
Liabilities and Net Position
Accounts Payable $ 851 $ 1,175
Awards Payable (Note 7) - 7,366
Accrued Payroll 904 776
Accrued Annual Leave 1,108 1,057
Debt (Note 8) 1,254,249 1,308,034
Total Liabilities $ 1,257,112 $ 1,318,408
Commitments and Contingencies (Note 9)
Cumulative Results of Operations - All Other Funds $ 33,087 $ 42,205
Cumulative Results of Operations - Capital Magnet Fund (Note 12) 727,968 714,967
Total Cumulative Results of Operations 761,055 757,172
Unexpended Appropriations (Note 10) 2,100,988 2,167,731
Total Net Position 2,862,043 2,924,903
Total Liabilities and Net Position $ 4,119,155 $ 4,243,311
The accompanying notes are an integral part of these financial statements.
74
Community Development Financial Institutions Fund
Statements of Operations and Changes in Net Position
For the Years Ended September 30, 2022 and September 30, 2021
(Dollar amounts in thousands)
2022 2021
Revenue and Financing Sources:
Appropriations (Note 10) $ 358,800 $ 1,332,373
Imputed Financing (Note 11) 964 892
Interest, Non-Federal 33,853 32,995
Interest, Federal 1,631 2,444
Dividends 125 70
Government Sponsored Enterprise Fees (Note 12) 248,148 438,358
Other 1,185 1,213
Equity in Gain of Associates, Net 170 130
Unrealized Gain on Investments 4,072 15,395
Total Revenue and Financing Sources 648,948 1,823,870
Expenses:
CDFI Grants $ 198,656 $ 204,364
BEA Grants 25,723 105
CMF Grants 233,908 168,809
RRP Grants 101,416 1,091,091
Administrative Expenses (Note 13) 32,929 31,095
Reduction of Bad Debt Expense (556) (2,469)
Administrative Expenses Paid by Others (Note 11) 964 892
Total Operating Expenses 593,040 1,493,887
Other Expenses
Interest Expense, Federal 40,089 36,537
Unrealized Loss on Investments 11,936 -
Total Expenses 645,065 1,530,424
Net Income $ 3,883 $ 293,446
Cumulative Results of Operations, Beginning of Year $ 757,172 $ 463,726
Net Income 3,883 293,446
Cumulative Results of Operations, End of Year $ 761,055 $ 757,172
The accompanying notes are an integral part of these financial statements.
75
Community Development Financial Institutions Fund
Statements of Cash Flows
For the Years Ended September 30, 2022 and September 30, 2021
(Dollar amounts in thousands)
2022 2021
Cash Flows from Operating Activities:
Net Income $ 3,883 $ 293,446
Adjustments to Reconcile Net Income to Net Cash Provided by/(Used in) Operations:
Equity in Gain of Associates (170) (130)
Amortization Expense 2,872 2,742
Accretion of Discount (24) (24)
Reduction of Bad Debt Expense (556) (2,469)
Unrealized Loss/(Gain) on Investments 7,864 (15,395)
Change in Assets and Liabilities:
Decrease/(Increase)in Accrued Revenue 150,210 (55,610)
(Increase)/Decrease in Other Assets (8) 31
(Decrease)/Increase in Accounts Payable, and Accrued Payroll (196) 460
Decrease in Awards Payable (7,366) (17,624)
Increase/(Decrease) in Accrued Annual Leave 51 (13)
Net Cash Provided by Operating Activities 156,560 205,414
Cash Flows from Investing Activities:
Loans Disbursed $ (77,087) $ (95,282)
Collection of Loan Principal 136,908 43,006
Proceeds from Redemption of Investments 1,500 -
Proceeds from Distribution from Investments - 169
Purchases of New Investments (200) -
Purchases of Internal-use Software (4,423) (3,947)
Recovery of Loans Written Off - 53
Net Cash Provided by/(Used in) Investing Activities 56,698 (56,001)
Cash Flows from Financing Activities:
(Decrease)/Increase in Unexpended Appropriations, Net (Note 10) $ (66,743) $ 1,939,805
Borrowings from Federal Financing Bank 75,075 94,049
Repayments to Federal Financing Bank (133,665) (41,325)
Borrowings from Treasury 27,912 17,309
Repayments to Treasury (23,107) (19,385)
Net Cash (Used in)/Provided by Financing Activities (120,528) 1,990,453
Net Change in Fund Balance with Treasury 92,730 2,139,866
Fund Balance with Treasury, Beginning of Year 2,616,735 476,869
Fund Balance with Treasury, End of Year $ 2,709,465 $ 2,616,735
The accompanying notes are an integral part of these financial statements.
76
D
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes to Financial Statements
September 30, 2022 and 2021
77
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
(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)
• Equitable Recovery Program (ERP)
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
78
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
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 (CAA) (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 ERP 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) ended on September 30, 2022
and 2021, 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.
79
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
(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.
(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 Enterprises (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 awards 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.
The allowance for bad debt 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
80
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
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 2022 and 2021, 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. When 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-
temporary impairment losses of these investments for the FYs ended September 30,
2022 and 2021.
81
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
• 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 Enterprises’ 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.
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,
2022 and 2021 was $2.9 million and $2.7 million, respectively.
82
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
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, a 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, 2022 and 2021 was $1.9 million and $1.6 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 of
up to 4% for FERS 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,
2022 and 2021 was $521 thousand and $462 thousand, respectively.
There were no employees covered under CSRS as of September 30, 2022 and 2021,
respectively.
(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.
83
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
(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 8 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.
(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.
84
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
(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 6 for more information and disclosures relating to the CDFI Fund’s fair value
measurements.
(4) Fund Balance with Treasury
Fund Balance with Treasury (FBwT) as of September 30, 2022 and 2021 consisted of the following
components:
2022 2021
(in thousands)
Available $ 1,988,120 $ 1,972,216
Obligated 148,495 238,241
Restricted 566,411 403,328
Expired 6,439 2,950
$ 2,709,465 $ 2,616,735
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
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.
85
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
(5) Loans Receivable, Net
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, 2022 and 2021, delineated by
delinquency category were as follows:
As of September 30, 2022
Greater than 90 Total Loans
(in thousands) Days Past Due Current Receivable
General Recourse Pre-2012 $ 737 $ 5,648 $ 6,385
General Recourse 2012-Current - 49,707 49,707
Asset-backed - 1,149,112 1,149,112
$ 737 $ 1,204,467 $ 1,205,204
Less Allowance for Bad Debt 5,241
Total $ 1,199,963
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
86
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
Gross loans receivable in nonperforming status was $737 thousand and $820 thousand for the FYs ended
September 30, 2022 and 2021, 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 2022 and 2021 were as follows:
As of September 30, 2022
(Reduction)/
Beginning Addition of Bad
Balance Recoveries Debt Expense Ending Balance
(in thousands)
General Recourse Pre-2012 $ 1,524 $ - $ (370) $ 1,154
General Recourse 2012-Current 4,273 - (186) 4,087
$ 5,797 $ - $ (556) $ 5,241
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
87
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
The allowance for bad debt attributable to loans individually evaluated for impairment
and loans collectively evaluated for impairment as of September 30, 2022 and 2021 were as
follows:
As of September 30, 2022
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 $ 737 $ 5,648 $ 737 $ 417 $ 1,154
General Recourse 2012-Current 812 48,895 430 3,657 4,087
Asset-backed - 1,149,112 - - -
$ 1,549 $ 1,203,655 $ 1,167 $ 4,074 $ 5,241
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
88
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
As of September 30, 2022 and 2021 impaired loans with a related allowance were as follows:
As of September 30, 2022
Unpaid Average Interest
Recorded Principal Related Recorded Income
Investment Balance Allowance Investment Recognized
(in thousands)
General Recourse Pre-2012 $ 737 $ 737 $ 737 $ 989 $ -
General Recourse 2012-Current 812 812 430 812 17
$ 1,549 $ 1,549 $ 1,167 $ 1,801 $ 17
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
There were no impaired loans for which there is not a related allowance as of September 30, 2022 and
2021.
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, 2022 and 2021, the CDFI Fund had no new loans whose terms have
been modified in TDRs.
For the FYs ended September 30, 2022 and 2021, grants in the amount of $4.9 million and $10.8
million, respectively, were disbursed to debtors owing receivables whose terms had been previously
modified in TDRs. There were commitments in the amount of $3.1 million to disburse grants to debtors
owing receivables whose terms have been modified in TDRs as of September 30, 2021. There were no
commitments as of September 30, 2022.
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, 2022 and 2021, in terms of
the attributes of the borrower, the business environment in which the borrower operates or the loan
itself, follows:
89
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
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.
The credit quality indicators for loans receivable as of September 30, 2022 and 2021 were as follows:
As of September 30, 2022
Pass Likely Doubtful Loss Total
(in thousands)
General Recourse Pre-2012 $ 3,216 $ 2,432 $ - $ 737 $ 6,385
General Recourse 2012-Current 24,877 24,018 812 - 49,707
Asset-backed 1,149,112 - - - 1,149,112
$ 1,177,205 $ 26,450 $ 812 $ 737 $ 1,205,204
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
(6) 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
was $6.2 million and $18.1 million as of September 30, 2022 and 2021, respectively. A downward
90
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
adjustment was made for the quoted market price totaling $11.9 million as of September 30, 2022.
An upward adjustment was for the quoted market price totaling $14.1 million as of September 30,
2021.
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 2022 and 2021. The fair value of the investment was $28.1
million and $24.0 million as of September 30, 2022 and 2021, respectively. Upward adjustments
were made for the observable price changes totaling $4.1 million and $1.3 million as of September
30, 2022 and 2021, respectively. The investment is considered a level 2 input in the fair value
hierarchy.
(7) Awards Payable
As of September 30, 2022, there were no 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
(8) Debt
The CDFI Fund’s debt with FFB and Treasury totaled $1,254.2 million and $1,308.0 million as of
September 30, 2022 and 2021, respectively.
During FY 2022, the CDFI Fund borrowed $103.0 million for loans. This included $78.3 million
for CDFI BGP loans, $14.3 million for CDFI BGP downward subsidy reestimate, $1.8 million for
direct loans, $2.4 million for direct loan downward subsidy reestimate, and $6.2 million to meet
annual interest payments due to the Treasury, at interest rates ranging from 1.356% to 5.5%,
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 $156.8 million.
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.
91
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
Interest paid in cash for the FYs ended September 30, 2022 and 2021 was $40.1 million and $36.5
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, 2022:
(in thousands) FY Debt
2023 $ 44,043
2024 46,813
2025 48,743
2026 49,915
2027 50,910
Later years, through 2058 1,013,825
Total $ 1,254,249
(9) Commitments and Contingencies
Award, Purchase and Bond Guarantee Program Commitments
Unfilled award commitments amounted to $249.0 million and $232.3 million as of September 30,
2022 and 2021, 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 of $38 thousand pertaining to the CDFI Program as of September
30, 2021, 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. There were no award commitments pertaining to
the CDFI Program as of September 30, 2022. Award commitments of $7.0 million pertaining to the
RRP as of September 30, 2021, were also excluded from these amounts because they were reflected
as liabilities as these awardees have met the conditions required for payment, but funds have not yet
been disbursed. There were no award commitments pertaining to the RRP as of September 30,
2022.
Award commitments pertaining to the BEA Program of $284 thousand as of September 30, 2021,
represent expenditures incurred by awardees for which the CDFI Fund will compensate the
awardee through a grant award and are excluded from these commitment amounts since they are
reflected as liabilities on the CDFI Fund’s Statements of Financial Position. There were no award
commitments pertaining to the BEA Program as of September 30, 2022.
Purchase commitments of $11.1 million and $8.8 million as of September 30, 2022 and 2021,
respectively, related to the unexpired portion of contracts, and purchase orders relating to goods and
services not yet received.
92
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
A commitment of $3.3 million and $2.0 million as of September 30, 2022 and 2021, respectively,
related to the Economic Mobility Corps (EMC). Funding for the EMC was enacted through the
CAA to be operated in conjunction with the Corporation for National and Community Service
(CNCS). 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.
CDFI BGP unfilled commitments for related direct loan disbursements amounted to $609.2 million
and $386.3 million as of September 30, 2022 and 2021, 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.
(10) Unexpended Appropriations
Unexpended appropriations as of September 30, 2022 and 2021 were as follows:
(in thousands) 2022 2021
Beginning Unexpended Appropriations $ 2,167,731 $ 227,926
Appropriations Received 295,000 3,270,000
Appropriations for Subsidy Reestimate 17,797 16,008
Appropriations Cancelled (820) (701)
Appropriations Expended (358,800) (1,332,373)
Subsidy Adjustment (1) (19,920) (13,129)
Change in Unexpended Appropriations (66,743) 1,939,805
Ending Unexpended Appropriations $ 2,100,988 $ 2,167,731
1
Negative subsidy receipts for CDFI BGP and downward subsidy re-estimates for the CDFI Program
direct loans and CDFI BGP
(11) 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
professional service fees. Imputed financing and the related administrative expenses paid by others
were $964 thousand and $892 thousand for the FYs ended September 30, 2022 and 2021,
respectively.
93
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
(12) Government Sponsored Enterprises’ 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 2021 activities, the GSEs’ transferred $398.4 million to the CDFI
Fund in February 2022 for the CMF Program. The GSEs’ have a FY end of December 31. As a
result, in Q1 of FY 2022, the CDFI Fund accrued revenue of $87.8 million in anticipation of the
fees received in February 2022. An accrual of $160.3 million was made in anticipation of
collections in FY 2023 for fees estimated through September 30, 2022.
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.
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.
(13) Administrative Expenses
Administrative expenses consist of the following for the FYs ended September 30, 2022 and 2021:
(in thousands) 2022 2021
Personnel compensation and benefits $ 15,712 $ 13,797
Travel 6 -
Rent, communication, utilities and miscellaneous charges 1,361 1,234
Contractual services with other agencies 8,085 5,965
Contractual services with non-federal parties 3,925 6,609
Information technology systems maintenance 897 740
Amortization 2,872 2,742
Supplies and printing 71 8
Total $ 32,929 $ 31,095
(14) Related Party Transactions
ASC Topic 850, Related Party Disclosure, defines being an affiliate of an entity as a related party.
Affiliates of the CDFI Fund includes the Treasury who is considered the parent company. Related
94
COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
Notes To Financial Statements
September 30, 2022 and 2021
party transactions include those that occur between subsidiaries of a common parent. As a result,
the CDFI Fund recognizes Interagency Agreements (IAAs) with Treasury subsidiaries as related
party transactions. These related party expenses amounted to $8.6 million and $7.1 million for the
FYs ended September 30, 2022 and 2021, 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 $4.4
million and $3.8 million for FYs 2022 and 2021, respectively. An IAA with the Bureau of the
Fiscal Service for accounting services, e-Travel and Procurement in the amount of $1.5 million and
$1.3 million for FYs 2022 and 2021, respectively. An IAA with Alcohol and Tobacco Tax and
Trade Bureau for IT services in the amount of $2.7 million and $2.0 million for FYs 2022 and
2021, respectively.
(15) Subsequent Events
The CDFI Fund has evaluated subsequent events from the date of statements of financial position
through November 14, 2022, the date at which the financial statements were available to be issued,
and determined there are no other items to disclose.
95
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
ARP – American Rescue Plan Act
ASC – Accounting Standards Codification
B
Base-FA – Base Financial Assistance
BEA Program – Bank Enterprise Award Program
C
CDE – Community Development Entity
CDFI – Community Development Financial Institution
CDFI ERP – CDFI Equitable Recovery Program
CDFI Fund – Community Development Financial Institutions Fund
CDFI Program – Community Development Financial Institutions Program
CDFI Bond Guarantee Program - Community Development Financial Institutions Bond Guarantee
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
96
G
GAAP – Generally Accepted Accounting Principals
GSE – Government Sponsored Enterprise
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
OCFO – Office of the Chief Financial Officer
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
97
TDR – Troubled Debt Restructuring
Title VI – Title VI of the Civil Rights Act
TLR – Transaction Level Report
TSP – Thrift Savings Plan
98
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