75376 Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 

Authority: 5 U.S.C. 301, 303, 7301; 5 

U.S.C. App. (Ethics in Government Act); 5 

U.S.C. App. (Inspector General Act of 1978); 

E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., 

p. 215, as modified by E.O. 12731, 55 FR 

42547, 3 CFR, 1990 Comp., p. 306; 5 CFR 

2635.105; 18 U.S.C. 207, 208. 

■ 2. The heading to Part 1010 is revised 

as set forth above. 

■ 3. Sections 1010.101 through 

1010.104 are designated as Subpart A 

and the heading is added to read as set 

forth below: 

Subpart A—Conduct of Employees 

* * * * * 

§ 1010.101 [Amended] 

■ 4. Section 1010.101 is amended by 

removing the word ‘‘part,’’ and adding 

the word ‘‘subpart’’ in its place. 

■ 5. A new Subpart B is added to Part 

1010 to read as follows: 

Subpart B—Procedures for Exemption 

of Scientific and Technological 

Information Communications From 

Post-Employment Restrictions 

Sec. 

1010.201 Purpose and scope. 

1010.202 Definitions. 

1010.203 Procedures for review and 

approval of requests. 

§ 1010.201 Purpose and scope. 

(a) This subpart sets forth criteria for 

the types of communications on 

scientific or technological matters 

permitted under 18 U.S.C. 207(j)(5) by 

defining the term ‘‘scientific or 

technological information.’’ This subpart 

also establishes the procedures for 

receiving and approving requests from 

former employees of the executive 

branch to make such communications to 

DOE. 

(b) This subpart applies to any former 

employee of the executive branch 

subject to the post-employment conflict 

of interest restrictions in 18 U.S.C. 

207(a), (c), and (d), who wishes to 

communicate with DOE under the 

exemption in 18 U.S.C. 207(j)(5) for the 

purpose of furnishing scientific or 

technological information to DOE 

offices or officials. 

(c) This subpart does not apply to a 

former DOE employee’s testimony as an 

expert in an adversarial proceeding in 

which the United States is a party or has 

a direct and substantial interest. 

§ 1010.202 Definitions. 

For purposes of this subpart: 

(a) Agency designee means an 

individual serving in a position in DOE 

requiring appointment by the President 

of the United States with the advice and 

consent of the Senate. 

(b) Authorized communication means 

any transmission of scientific or 

technological information to any DOE 

office or official that is approved by 

DOE under § 1010.203 of this subpart. 

(c) DOE means the U.S. Department of 

Energy. 

(d) Scientific or technological 

information means: Information of a 

scientific or technological character, 

such as technical or engineering 

information relating to the natural 

sciences. The exception does not extend 

to information associated with a 

nontechnical discipline such as law, 

economics, or political science. 

(e) Incidental references or remarks. 

Provided the former employee’s 

communication primarily conveys 

information of a scientific or 

technological character, the entirety of 

the communication will be deemed 

made solely for the purpose of 

furnishing such information 

notwithstanding an incidental reference 

or remark: 

(1) Unrelated to the matter to which 

the post-employment restriction applies; 

(2) Concerning feasibility, risk, cost, 

speed of implementation, or other 

considerations when necessary to 

appreciate the practical significance of 

the basic scientific or technological 

information provided; or 

(3) Intended to facilitate the 

furnishing of scientific or technological 

information, such as those references or 

remarks necessary to determine the kind 

and form of information required or the 

adequacy of information already 

supplied. 

§ 1010.203 Procedures for review and 

approval of requests. 

(a) Any former employee of the 

executive branch subject to the 

constraints of the post-employment 

restrictions of 18 U.S.C. 207(a), (c), and 

(d) who wishes to communicate 

scientific or technological information 

to DOE must contact the DOE office 

with which the former employee wishes 

to communicate and request 

authorization to make such 

communication. This request must be in 

writing and address, in detail, 

information regarding each of the factors 

set forth in paragraphs (c)(1) through 

(c)(6) and (c)(8) of this section. 

(b) In consultation with the 

Designated Agency Ethics Official 

(DAEO), the agency designee in the 

office with cognizance over the matter 

must advise the former employee in 

writing whether the proposed 

communication is an authorized 

communication. This authority cannot 

be delegated, except to another 

individual serving in a position in DOE 

requiring appointment by the President 

of the United States with the advice and 

consent of the Senate. 

(c) In deciding whether a proposed 

communication is an authorized 

communication, the agency designee 

receiving the request and the DAEO 

must consider the following factors: 

(1) Whether the former employee has 

relevant scientific or technical 

qualifications; 

(2) Whether the former employee has 

qualifications that are otherwise 

unavailable to both the former 

employee’s current employer and DOE; 

(3) The nature of the scientific or 

technological information to be 

conveyed; 

(4) The former employee’s position 

prior to termination; 

(5) The extent of the former 

employee’s involvement in the matter at 

issue during his or her employment, 

including: 

(i) The former employee’s 

involvement in the same particular 

matter involving specific parties; 

(ii) The time elapsed since the former 

employee’s participation in such matter; 

and 

(iii) The offices within the Federal 

department or agency involved in the 

matter both during the former 

employee’s period of employment in the 

executive branch and at the time the 

request is being made; 

(6) The existence of pending or 

anticipated matters before the Federal 

government from which the former 

employee or his or her current employer 

may financially benefit, including 

contract modifications, grant 

applications, and proposals; and 

(7) Whether DOE’s interests would be 

served by allowing the proposed 

communication; and 

(8) Any other relevant information. 

[FR Doc. 2010–30398 Filed 12–2–10; 8:45 am] 

BILLING CODE 6450–01–P 

DEPARTMENT OF THE TREASURY 

Community Development Financial 

Institutions Fund 

12 CFR Part 1807 

RIN 1559–AA00 

Capital Magnet Fund 

AGENCY: Community Development 

Financial Institutions Fund, Department 

of the Treasury. 

ACTION: Interim rule with request for 

public comment. 

SUMMARY: The Department of the 

Treasury is issuing this interim rule 


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Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 75377 

implementing the Capital Magnet Fund 

(CMF), administered by the Community 

Development Financial Institutions 

Fund (CDFI Fund), U.S. Department of 

the Treasury. The mission of the CDFI 

Fund is to increase the capacity of 

financial institutions to provide capital, 

credit and financial services in 

underserved markets. Its long-term 

vision is an America in which all people 

have access to affordable credit, capital 

and financial services. The CMF was 

established through the Housing and 

Economic Recovery Act of 2008, which 

added section 1339 to the Federal 

Housing Enterprises Financial Safety 

and Soundness Act of 1992. 

DATES: Interim rule effective December 

3, 2010. Comment due date: Comments 

on this interim rule must be received in 

the offices of the CDFI Fund on or 

before February 1, 2011. 

ADDRESSES: All comments concerning 

this interim rule should be addressed to 

the Capital Magnet Fund Manager, 

Community Development Financial 

Institutions Fund, Department of the 

Treasury, 601 13th Street, NW., Suite 

200 South, Washington, DC 20005; by email to cdfihelp@cdfi.treas.gov; or by 

facsimile at (202) 622–7754. Comments 

will be made available for public review 

on the CDFI Fund’s Web site at http:// 

www.cdfifund.gov. 

Comments may be also be submitted 

and viewed through the Federal eRulemaking Portal, http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Jeffrey C. Berg, Legal Counsel, 

Community Development Financial 

Institutions Fund, at (202) 622–8662 

(This is not a toll free number). 

Information regarding the CDFI Fund 

and the CMF may be downloaded from 

the CDFI Fund’s Web site at http:// 

www.cdfifund.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Capital Magnet Fund (CMF) was 

established through the Housing and 

Economic Recovery Act of 2008 (the 

Act), Public Law 110–289, section 1131, 

as a trust fund whose appropriation will 

be used to carry out a competitive grant 

program administered by the CDFI 

Fund. Through the CMF, the CDFI Fund 

is authorized to make financial 

assistance grants to certified Community 

Development Financial Institutions 

(CDFIs) and Nonprofit Organizations (if 

one of their principal purposes is the 

Development or management of 

Affordable Housing). CMF grants must 

be used to attract financing for and 

increase investment in: (i) The 

Development, Preservation, 

Rehabilitation, and Purchase of 

Affordable Housing for primarily 

Extremely Low-, Very Low-, and LowIncome Families; and (ii) Economic 

Development Activities or Community 

Service Facilities (such as day care 

centers, workforce development centers, 

and health care clinics) which In 

Conjunction With Affordable Housing 

Activities will implement a Concerted 

Strategy to stabilize or revitalize a LowIncome Area or Underserved Rural 

Area. This interim rule creates the 

requirements and parameters for CMF 

implementation and administration 

including, among others, application 

eligibility, application review, award 

selection, Assistance Agreements, 

eligible uses of award dollars and 

related funds, Awardee reporting, and 

compliance monitoring. 

On March 15, 2010, the CDFI Fund 

published in the Federal Register a 

Notice of Proposed Rulemaking, 75 FR 

12408, seeking responses to specific 

questions regarding CMF design, 

implementation, and administration. 

The CDFI Fund seeks public comment 

on this entire interim rule. All 

capitalized terms are defined in the 

definition section of the interim rule, as 

set forth in 12 CFR 1807.104. 

II. Comments on the Proposed Rule and 

Summary of Changes 

The interim rule contained in this 

document is based on the Notice of 

Proposed Rulemaking (the proposed 

rule) published on March 15, 2010. The 

comment period for the proposed rule 

ended on May 14, 2010. The CDFI Fund 

received a total of 5 written 

submissions. The submissions were 

from three community development 

financial institutions (CDFIs), an 

affordable housing trade association and 

a lender. All comments received by the 

end of the comment period were posted 

on the CDFI Fund’s Web site for public 

view. 

Below are the CDFI Fund’s responses 

to the public comments on the proposed 

rule and answers to the specific five 

italicized questions asked in the 

proposed rule. The following includes a 

discussion of the significant issues, as 

well as clarifying information. 

A. Eligibility 

The eligibility requirements for 

Applicants are set forth in 12 CFR 

1807.200. The CDFI Fund asked 

whether an eligibility requirement that 

33 percent of the Applicant’s resources 

(measured by staff time and/or budget) 

be dedicated to Affordable Housing is 

appropriate (12 CFR 1807.200(a)(2)(iii)). 

If not, what is the appropriate 

percentage of activities, and how should 

this be measured? 

Commentators supported the 33 

percent of resources eligibility 

requirement. Two commentators 

recommended that the CDFI Fund allow 

consortiums to apply as a single 

Applicant, suggesting that a consortium 

consisting of smaller CDFIs could 

collaborate to serve a number of 

adjacent or related markets more 

effectively. One commentator suggested 

that permitting consortiums to apply 

would allow an established nonprofit 

organization, with a track record of 

success, to partner with a new entity in 

order to address a particular and 

immediate affordable housing need. 

Thus, the three year existence 

requirement should apply only to nonconsortium applicants, thus allowing 

new entities to apply, as long as they 

can demonstrate they have raised 

sufficient money to operate for a 

specific amount of time and have 

applied for their 501(c)(3) status. 

Another commentator suggested the 

CDFI Fund divide CMF awards into two 

applicant pools delineated by applicant 

size, similar to the practice under the 

CDFI Program. The commentator 

suggested that national organizations 

typically cannot serve smaller more 

remote markets and that two applicant 

pools would ensure that the CMF 

awards are distributed to urban, 

suburban and rural areas fairly. The 

commentator also suggested reducing 

the maximum award amount to ensure 

the distribution of awards to more areas 

throughout the country. 

The CDFI Fund’s response: The 

eligibility requirement that 33 percent of 

an applicant’s resources must be 

dedicated to Affordable Housing 

remains as set forth in 12 CFR 

1807.200(a)(2)(iii). In response to 

comments advocating for two CMF 

applicant pools, consortium applicants, 

and a variation on the time in existence 

requirement for consortium applicants, 

at this time the CDFI Fund will 

maintain the requirements as stated in 

the proposed rule. As the CMF is a new 

program, the CDFI Fund will evaluate 

the program implementation and 

impacts before making additional 

modifications in these areas. If in the 

future, the CDFI Fund determines that it 

is appropriate to develop more than one 

applicant pool, permit consortium 

applicants or otherwise modify the time 

in existence requirements, the CDFI 

Fund will do so in the Notice of 

Funding Availability (NOFA) for the 

applicable funding round as permitted 

in the interim rule. 


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B. Eligible Uses 

The proposed rule in 12 CFR 1807.302 

sets forth a number of restrictions on 

use of CMF award funds. Are there 

suggested restrictions that will prevent 

the CMF from financing predatory 

lending practices that should be 

included in this section? Is the use 

restriction that no more than 30 percent 

of an Awardee’s CMF award can be 

used for Economic Development 

Activities and Community Service 

Facilities appropriate (12 CFR 

1807.302(d))? If not, what is the 

appropriate percentage? 

One commentator remarked that the 

new industry rules emerging for 

mortgage finance will provide 

additional protections for low-income 

purchasers and thus, suggested that 

there is no need for the addition of antipredatory lending provisions to the 

proposed rule. 

Another commentator suggested that 

the CDFI Fund lower the statutorily 

imposed maximum award percentage 

that an Awardee can receive in any 

given funding round and also remove 

the 30 percent restriction on use of CMF 

awards for Economic Development 

Activities or Community Service 

Facilities. To allow for maximum 

flexibility, a commentator also 

suggested that no cap be placed on the 

amount of a CMF award that can be 

used for Operations. One commentator 

suggested that the CDFI Fund make 

clear that Awardees can utilize an 

Affordable Housing Fund at the 

enterprise level and be able to aggregate 

a CMF award with an existing fund 

maintained by the Awardee. The 

commentator also suggested that the 

definition of Affordable Housing Fund 

mirror that of the FY 2010 NOFA 

published on March 15, 2010, which 

allows the Awardee to use the fund to 

make grants and investments. 

The CDFI Fund’s response: The CDFI 

Fund considers the restrictions on 

eligible uses in 12 CFR 1807.302 of the 

Proposed Rule appropriate and therefore 

these restrictions are maintained in the 

interim rule. As there are other Federal 

programs and mechanisms better suited 

to deal with predatory lending, the 

interim rule will not explicitly address 

this issue. The six eligible uses of CMF 

awards are set forth in 12 CFR 1807.301. 

One of those eligible uses is to capitalize 

an Affordable Housing Fund. As 

suggested by Commentators, the 

definition of Affordable Housing Fund 

in 12 CFR 1807.104(e) is revised in this 

interim rule to include grants and 

investments to be consistent with the 

definition published in the FY 2010 

CMF NOFA. Any previous 

inconsistency between the Proposed 

Rule and the NOFA was inadvertent. 

The statutory purpose of the CMF is 

to attract private capital for and increase 

investment in Affordable Housing 

Activities and related Economic 

Development Activities and Community 

Service Facilities. The CDFI Fund wants 

to ensure that the awards are used 

primarily for those specific purposes. 

Therefore, the CDFI Fund thinks the 5 

percent cap on Operations uses and the 

30 percent cap on use of CMF awards 

for Economic Development Activities or 

Community Service Facilities is in line 

with the spirit of the authorizing statute. 

As this is a new program, the CDFI 

Fund may at a future point determine 

that the Operations use restriction 

should be modified. In such a case, the 

interim rule, as set forth in 12 CFR 

1807.302(b), allows the CDFI Fund to 

establish the restrictions on Operations 

uses in the applicable NOFA. 

Finally, an Awardee is not required to 

create a separate legal entity or 

investment vehicle in which it will 

undertake the eligible activities listed in 

12 CFR 1807.301. However, as set forth 

in 12 CFR 1807.600, the Awardee must 

be able to account for every dollar of its 

CMF award and track its uses. 

C. Affordable Housing Activities, 

Economic Development Activities and 

Community Service Facilities 

This proposed rule currently defines 

Economic Development Activities as 

‘‘the Development, Preservation, 

Rehabilitation, or Purchase of 

Community Service Facilities and/or 

other physical structures in which 

neighborhood-based businesses operate 

which, In Conjunction With Affordable 

Housing Activities, implements a 

Concerted Strategy to stabilize or 

revitalize a Low-Income Area or 

Underserved Rural Area.’’ Is this an 

appropriate definition? Should it be 

expanded to include working capital 

loans to businesses? Should refinancing 

of existing loans be a permissible 

activity? 

One commentator generally agreed 

with the proposed rule’s definition of 

Economic Development Activities and 

supported limiting the use of CMF 

awards for non-housing activities. 

However, the same commentator 

suggested that the CDFI Fund broaden 

the definition of Economic Development 

Activity beyond its relation to defined 

Affordable Housing Activities and 

instead have it apply to housing-related 

activities more generally. The same 

commentator also suggested changing 

the definitions of Development, 

Preservation, Rehabilitation and 

Purchase to align with that which is 

used in the affordable housing industry, 

which would allow for more flexibility. 

This commentator suggested that these 

terms are used interchangeably and are 

not mutually exclusive. The 

commentator recommended adding the 

term ‘‘resident services’’ to the definition 

of Community Service Facility to 

acknowledge the presumed eligibility of 

physical spaces for resident services in 

the use of CMF awards, as well as 

expanding the list of the types of 

community services provided. 

The CDFI Fund’s response: The 

interim rule accepts the commentator’s 

suggestion and revises the definition of 

Economic Development Activity in 12 

CFR 1807.104(t) to apply to real estate 

development activities generally. The 

interim rule revises the definition of 

Preservation in 12 CFR 1807.104(tt) to 

provide for the purchase or refinance of 

single-family or multi-family rental 

mortgages or housing that was not 

previously subject to affordability 

restrictions, with the intent of subjecting 

the housing to the CMF affordability 

qualifications, as set forth in 12 CFR 

1807.400 et seq. The definition of 

Purchase is also revised in 12 CFR 

1807.104(vv) to clarify the authorization 

of mortgage financing of Single-family 

housing. The interim rule also adds the 

definition of Multi-family housing, as 

set forth in 12 CFR 1807.104(nn), and 

Family in 12 CFR 1807.104(x). 

Under the interim rule, Awardees 

may pursue any or all of the strategies 

set forth in 12 CFR 1807.300(a). Thus, 

it is not necessary to revise the 

definitions of Development, 

Preservation, Rehabilitation and 

Purchase to make them interchangeable, 

as the commentator suggested. The 

interim rule, however, makes technical 

and clarifying corrections to those 

definitions, as previously described. It 

also revises the definition of 

Community Services Facility in 12 CFR 

1807.104(o) to expand the types of 

services, as suggested by the 

commentator. 

The interim rule also revises 12 CFR 

1807.501 to require the date by which 

CMF awards must be Committed for use 

and initially disbursed, to the date 

designated in the Awardee’s Assistance 

Agreement. Similarly, 12 CFR 1807.503 

of the interim rule is revised to require 

that CMF-funded projects must be 

completed and placed into service by 

the date designated in the Awardee’s 

Assistance Agreement. The proposed 

rule required CMF funds to be 

Committed for use within two and 

disbursed within three years of the 

effective date of the Assistance 

Agreement. The CDFI Fund anticipates 

that the Assistance Agreement will still 


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Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 75379 

provide an Awardee at least two years 

to commit for use and three years to 

initially disburse its CMF award, and 

five years to complete CMF-funded 

projects. The interim rule incorporates 

these changes to provide the Awardee 

flexibility, should additional time be 

needed to complete environmental 

reviews and to accommodate unique 

circumstances. 

Should physical proximity be 

necessary to meet the requirement that 

Economic Development Activities or 

Community Service Facilities financed 

In Conjunction with Affordable Housing 

Activities implement a Concerted 

Strategy to stabilize or revitalize a LowIncome Area or Underserved Rural 

Area? If physical proximity is necessary, 

what is the best measure of being 

‘‘physically proximate’’ with respect to 

projects undertaken in urban areas, and 

with respect to projects undertaken in 

rural areas? 

One commentator remarked that 

census tract boundaries are sometimes 

inconsistent with neighborhood 

boundaries, which would limit the 

usefulness of census tracts as proxies for 

physical proximity. This commentator 

suggested that ‘‘physically proximate’’ 

should allow for strategies that provide 

access to the services through readily 

available transit options within the 

Awardee’s Service Area. Another 

commentator suggested that ‘‘or located 

within 20 miles’’ be added to the 

definition of In Conjunction With to 

deal with situations in which a property 

is located near a county line but may 

rely on services that are just a few miles 

away. 

The CDFI Fund’s response: 

Geographical proximity is the best 

measure of being ‘‘physically 

proximate.’’ However, the CDFI Fund 

recognizes that census tract boundaries 

can be limiting in certain instances. 

Therefore, the interim rule revises the 

definition of In Conjunction With in 12 

CFR 1807.104(cc) to include a 2 mile 

radius for a Metropolitan Area and a 20 

mile radius for a Non-Metropolitan 

Area. 

D. Affordability Qualifications 

Is the Affordable Housing 

qualification that requires a minimum 

of 20 percent of units in multi-family 

rental housing projects financed with a 

CMF award be occupied by Low-Income, 

Very Low-Income, or Extremely LowIncome Families appropriate (12 CFR 

1807.401)? If not, what is the 

appropriate percentage? 

One commentator agreed with the 

proposed rule’s level of targeting. 

The CDFI Fund’s response: The 

percentage threshold in 12 CFR 

1807.401 remains unchanged. 

As set forth in 12 CFR 1807.400 et 

seq., Affordable Housing is subject to a 

10-year affordability requirement that 

begins at Project Completion. Is this 10- 

year affordability requirement 

appropriate? How should this be 

measured with respect to funds that are 

deployed, returned to the Awardee, and 

reinvested during the life of the 

Assistance Agreement (e.g., in the case 

of CMF awards that are used to establish 

a revolving loan fund)? 

Two commentators expressed 

significant concern with the 10-year 

affordability requirement for 

homeownership. One commentator 

remarked that the 10-year provision 

would impose an onerous 

administrative burden on nonprofit 

program sponsors, as well as the 

homeowner, and suggested that the 

affordability qualification only be 

measured at purchase. That same 

commentator also opposed specific 

underwriting criteria as the affordability 

criteria. A second commentator opposed 

the 10-year affordability requirement 

because it would impose an 

affordability covenant and deter 

otherwise qualified homeowners. It 

would create a situation where the 

homeowner would have to suppress the 

sale price if he or she had to sell before 

the 10-year period ended. Thus, the 

provision serves as a barrier to 

homeownership, cited the commentator. 

The commentator provided an 

alternative to the 10-year affordability 

requirement: To remove the 10-year 

affordability covenant for each 

individual loan and instead require 

Awardees to redeploy the CMF dollars, 

upon resale, to new borrowers that meet 

the affordability requirements. Another 

commentator suggested that the 

proposed rule adopt the affordability 

qualifications of all Federal and state 

affordable housing programs. 

One commentator suggested that the 

front-end and back-end ratios for 

homeownership affordability 

qualification are too inflexible. The 

commentator suggested deleting the 

ratios and provide for the ability to 

negotiate specific terms with an 

Awardee should the CDFI Fund 

discover abusive lending. 

The CDFI Fund’s response: The CDFI 

Fund recognizes the limitation of an 

affordability covenant on 

homeownership. However, the CDFI 

Fund also recognizes the challenges 

from a compliance standpoint in 

accepting the many definitions of 

‘‘affordable housing’’ across all Federal 

and state programs. In an effort to 

balance the two interests, the interim 

rule removes the required affordability 

covenant on homeownership and allows 

Awardees to create their own 

mechanism of recouping and 

redeploying the CMF award in cases 

where the original homeowner sells the 

property to a buyer that does not meet 

the affordability qualifications. Under 

those circumstances, the Awardee must 

ensure that the portion of the CMF 

award spent or designated to finance the 

Affordable Housing Activity is recouped 

from the homeowner or the Awardee’s 

other resources, and redeployed in an 

eligible use for a qualified family for the 

remaining affordability period. The 

interim rule thus places the affordability 

restriction on the dollar amount of the 

CMF award used for the eligible 

activity, instead of the housing itself. 

The interim rule sets forth the 

parameters of resale, recoupment and 

redeployment in 12 CFR 1807.402(a)(5). 

Likewise, the CDFI Fund wants to 

allow for increases in tenant incomes 

while also increasing affordable housing 

opportunities. Therefore, in 12 CFR 

1807.401(g)(3), the interim rule provides 

that in the event a tenant’s income 

increases, the Awardee may replace that 

unit with another qualifying unit for 

purposes of meeting the 10-year 

affordability requirement. This 

provision encourages increases in 

wealth by low-income families, yet 

allows Awardees to fulfill the purpose 

of the CMF without encountering 

noncompliance. 

With regard to the homeownership 

front-end and back-end ratios, the 

interim rule removes those as 

affordability standards and simply uses 

the ‘‘no greater than 95 percent of 

median purchase price’’ as the 

qualification. 

The interim rule also adds the new 

defined term, ‘‘Eligible-Income’’ in 12 

CFR 1807.104(u), to describe families 

whose annual income does not exceed 

120 percent of the area median income, 

as determined by HUD. 

E. Record Retention 

The proposed rule sets forth record 

data collection and record retention 

requirements in 12 CFR 1807.902. What 

documentation should Awardees be 

required to retain to demonstrate 

compliance with (i) the affordability 

qualification requirements in 12 CFR 

1807.400 et seq. and (ii) the leveraging, 

commitment and Project Completion 

requirements in 12 CFR 1807.500 et 

seq.? 

No commentators offered specific 

recommendations regarding the 

documentation Awardees should be 


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75380 Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 

required to retain in order to 

demonstrate compliance. 

The CDFI Fund’s response: The CDFI 

Fund will set forth guidance and 

information on the documentation 

requirements in the Assistance 

Agreements and compliance guidance 

documents to be issued at a future date. 

F. Income Determination and Rent 

Limitations 

Although the CDFI Fund did not ask 

a specific question about the income 

determination and rent limitation 

provisions in the proposed rule, 

comments were submitted regarding 

these issues. One commentator 

remarked that the rent-setting 

mechanisms and income definitions are 

unnecessarily complex and should defer 

to the Department of Housing and Urban 

Development (HUD) program, the U.S. 

Department of Agriculture (USDA) 

program and the Low Income Housing 

Tax Credit (LIHTC) Program, authorized 

under the Tax Reform Act of 1986, I.R.C. 

section 42, rules for rent-setting and 

income determinations. The 

commentator also suggested that the 

rent limitation of no more than 30 

percent of a family’s annual income is 

too restrictive, especially if the housing 

provider does not have access to rental 

assistance subsidies. In addition, the 

developer must be able to demonstrate 

predictable rental proceeds for the 

property, which would be speculative 

under the proposed rule, remarked the 

commentator. As an alternative, the 

commentator suggested that in projects 

where CMF funds will represent 10 

percent or less of the total capital, the 

proposed rule should defer to the 

income targeting and rent-setting 

requirements of other Federal programs, 

thus allowing rents to increase but not 

decrease below a floor, based on the 

initial rents. 

Another commentator suggested in 

lieu of the ‘‘30 percent of the family’s 

annual income’’ rent limitation is to 

adopt the LIHTC standard in which 

rents are restricted based on levels that 

are affordable to a family making 60 

percent of area median income or less. 

The CDFI Fund’s response: The 

proposed rule largely mirrors the 

income determination rules and rent 

limits of the HOME Investment 

Partnership Program (HOME Program), 

authorized under title II of the CranstonGonzalez National Affordable Housing 

Act, as amended, 42 U.S.C. 12701 et 

seq., administered by HUD. Thus, in 12 

CFR 1807.401(a), the interim rule adopts 

the commentator’s suggestion of using 

the HOME Program rent limitations and 

sets the rent limitations as 30 percent of 

the income threshold of EligibleIncome, Low-Income, Very Low-Income 

and Extremely-Low Income Families. 

Similar to the HOME Program, 12 CFR 

1807.401(2)(iii) is added to the interim 

rule to allow an Awardee to determine 

a tenant’s income by using HUD’s 

definition of ‘‘annual income’’ in its 

Section 8 program, as set forth in the 

United States Housing Act of 1937, as 

amended, 42 U.S.C. 1437 et seq. 

G. Rural Definitions 

The CDFI Fund received comments 

on the definition of Underserved Rural 

Area. One commentator suggested that 

the proposed rule revise the definition 

of Underserved Rural Area to include 

rural areas that are eligible for USDA 

housing. The commentator remarked 

that defining only Non-Metropolitan 

Areas as ‘‘rural’’ areas excludes many 

underserved rural areas from 

consideration. In addition, the 

commentator advocated that the CDFI 

Fund use USDA’s definition of ‘‘housing 

stress’’ as one criteria of economic 

distress. 

The CDFI Fund’s response: The CDFI 

Fund has opted to use NonMetropolitan areas as a proxy for rural 

areas because it is an objective 

classification that wholly comprises 

areas that would be deemed ‘‘rural’’ 

under most, if not all other definitions 

of the word ‘‘rural.’’ 

With regard to the use of ‘‘housing 

stress’’ as an additional criteria of 

economic distress, the interim rule in 12 

CFR 1807.800(c)(5) provides for the 

addition of any criteria the CDFI Fund 

deems appropriate. Should the CDFI 

Fund decide to include additional 

criteria of economic distress, it will do 

so in the applicable NOFA. 

III. Rulemaking Analysis 

Executive Order (E.O.) 12866 

It has been determined that this 

interim rule is not a significant 

regulatory action under Executive Order 

12866. Accordingly, a regulatory impact 

assessment is not required. 

Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking is required under the 

Administrative Procedure Act (5 U.S.C 

553), the Regulatory Flexibility Act does 

not apply. 

Paperwork Reduction Act 

The collection of information 

contained in this interim rule has been 

previously reviewed and approved by 

the Office of Management and Budget 

(OMB) in accordance with the 

Paperwork Reduction Act of 1995 and 

assigned OMB Control Number 1559– 

0036. An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a valid control 

number assigned by OMB. This 

document restates the collections of 

information without substantive change. 

Comments concerning suggestions for 

reducing the burden of collections of 

information should be directed to the 

Capital Magnet Fund Manager, 

Community Development Financial 

Institutions Fund, 601 13th Street, NW., 

Suite 200 South, Washington, DC 20005. 

National Environmental Policy Act 

This interim rule has been reviewed 

in accordance with 12 CFR part 1815. 

The CDFI Fund’s Environmental 

Regulations under the National 

Environmental Protection Act of 1969 

(NEPA) require that the CDFI Fund 

adequately consider the cumulative 

impact proposed activities have upon 

the human environment. It is the 

determination of the CDFI Fund that the 

interim rule does not constitute a major 

Federal action significantly affecting the 

quality of the human environment and, 

in accordance with the NEPA and the 

CDFI Fund Environmental Quality 

Regulations, 12 CFR part 1815, neither 

an Environmental Assessment nor an 

Environmental Impact Statement is 

required. 

Administrative Procedure Act 

Because this interim rule relates to 

loans and grants, notice and public 

procedure and a delayed effective date 

are not required pursuant to the 

Administrative Procedure Act, 5 U.S.C. 

553(a)(2). 

Catalogue of Federal Domestic 

Assistance Number 

Capital Magnet Fund—21.011. 

List of Subjects in 12 CFR Part 1807 

Community development, Grant 

programs—housing and community 

development, Reporting and record 

keeping requirements. 

■ For the reasons set forth in the 

preamble, 12 CFR chapter XVIII is 

amended by adding part 1807 to read as 

follows: 

PART 1807—CAPITAL MAGNET FUND 

Subpart A—General Provisions 

Sec. 

1807.100 Purpose. 

1807.101 Summary. 

1807.102 Relationship to other CDFI Fund 

programs. 

1807.103 Awardee not instrumentality. 

1807.104 Definitions. 

1807.105 Waiver authority. 

1807.106 OMB control number. 


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Subpart B—Eligibility 

1807.200 Applicant eligibility. 

Subpart C—Use of Funds/Eligible Activities 

1807.300 Purposes of grants. 

1807.301 Eligible activities. 

1807.302 Restrictions on use of assistance. 

Subpart D—Qualification as Affordable 

Housing 

1807.400 Affordable Housing—General. 

1807.401 Affordable Housing—Rental 

Housing. 

1807.402 Affordable Housing— 

Homeownership. 

Subpart E—Leveraging and Commitment 

Requirement. 

1807.500 Leveraged costs—general. 

1807.501 Commitment for use. 

1807.502 Assistance limits. 

1807.503 Projection completion. 

Subpart F—Tracking Requirements 

1807.600 Tracking funds—general. 

1807.601 Nature of funds. 

Subpart G—Applications for Assistance 

1807.700 Notice of Funds Availability. 

Subpart H—Evaluation and Selection of 

Applications 

1807.800 Evaluation and selection— 

general. 

1807.801 Evaluation of Applications. 

Subpart I—Terms and Conditions of 

Assistance 

1807.900 Assistance Agreement. 

1807.901 Disbursement of funds. 

1807.902 Data collection and reporting. 

1807.903 Compliance with government 

requirements. 

1807.904 Lobbying restrictions. 

1807.905 Criminal provisions. 

1807.906 CDFI Fund deemed not to control. 

1807.907 Limitation on liability. 

1807.908 Fraud, waste and abuse. 

Authority: Housing and Economic 

Recovery Act of 2008, Pub. L. No.110–289, 

section 1131 

Subpart A—General Provisions 

§ 1807.100 Purpose. 

The purpose of the Capital Magnet 

Fund (CMF) is to attract private capital 

for and increase investment in 

Affordable Housing Activities and 

related Economic Development 

Activities and Community Service 

Facilities. 

§ 1807.101 Summary. 

(a) Through the CMF, the CDFI Fund 

will competitively award grants to 

CDFIs and qualified Nonprofit 

Organizations to leverage dollars for: 

(1) The Development, Preservation, 

Rehabilitation or Purchase of Affordable 

Housing primarily for Low-Income 

Families; and 

(2) Financing Economic Development 

Activities or Community Service 

Facilities. 

(b) The CDFI Fund will select 

Awardees to receive financial assistance 

grants through a merit-based, 

competitive application process. 

Financial assistance grants that are 

awarded through the CMF may only be 

used for eligible uses set forth in subpart 

C of this part. Each Awardee will enter 

into an Assistance Agreement which 

will require it to leverage the CMF grant 

amount and abide by other terms and 

conditions pertinent to any assistance 

received under this part. 

§ 1807.102 Relationship to other CDFI 

Fund programs. 

A Certified CDFI will automatically be 

deemed to meet the eligible entity 

requirements, provided that it has been 

in business as an operating entity for a 

period of at least three years prior to the 

application deadline. 

§ 1807.103 Awardee not 

instrumentality. 

No Awardee shall be deemed to be an 

agency, department, or instrumentality 

of the United States. 

§ 1807.104 Definitions. 

For the purpose of this part: 

(a) Act means the Housing and 

Economic Recovery Act of 2008, as 

amended, Public Law 110–289, section 

1131; 

(b) Affiliate means any entity that 

Controls, is Controlled by, or is under 

common Control with, an entity; 

(c) Affordable Housing means rental 

or for-sale single-family or multi-family 

housing that meets the requirements set 

forth in subpart D of this part; 

(d) Affordable Housing Activities 

means the Development, Preservation, 

Rehabilitation, or Purchase of 

Affordable Housing; 

(e) Affordable Housing Fund means a 

loan, grant or investment fund, managed 

by the Awardee, whose capital is used 

to finance Affordable Housing 

Activities; 

(f) Appropriate Federal Banking 

Agency has the same meaning as in 

section 3 of the Federal Deposit 

Insurance Act, 12 U.S.C. 1813(q), and 

includes, with respect to Insured Credit 

Unions, the National Credit Union 

Administration; 

(g) Applicant means any entity 

submitting an application for assistance 

under this part; 

(h) Appropriate State Agency means 

an agency or instrumentality of a State 

that regulates and/or insures the 

member accounts of a State-Insured 

Credit Union; 

(i) Assistance Agreement means a 

formal, written agreement between the 

CDFI Fund and an Awardee which 

specifies the terms and conditions of 

assistance under this part; 

(j) Awardee means an Applicant 

selected by the CDFI Fund to receive 

assistance pursuant to this part; 

(k) Capital Magnet Fund (or CMF) 

means the program authorized by 

section 1131 of the Act, Public Law 

110–289, and implemented under this 

part; 

(l) Certified Community Development 

Financial Institution (or Certified CDFI) 

means an entity that has been 

determined by the CDFI Fund to meet 

the eligibility requirements set forth in 

12 CFR 1805.201; 

(m) Committed means that the 

Awardee is able to demonstrate, in 

written form and substance that is 

acceptable to the CDFI Fund, a 

commitment for use pursuant to 

§ 1807.501; 

(n) Community Development 

Financial Institutions Fund (or CDFI 

Fund) means the Community 

Development Financial Institutions 

Fund, an office of the U.S. Department 

of Treasury, established under the 

Community Development Banking and 

Financial Institutions Act of 1994, as 

amended, 12 U.S.C. 4701 et seq.; 

(o) Community Service Facility means 

the physical structure in which service 

programs for residents or service 

programs for the broader community 

(including, but not limited to, health 

care, childcare, educational programs 

including literacy and after school 

programs, job training, food and 

nutrition services, cultural, and/or 

social services) operate which, In 

Conjunction With Affordable Housing 

Activities, implements a Concerted 

Strategy to stabilize or revitalize a LowIncome Area or Underserved Rural 

Area; 

(p) Concerted Strategy means a formal 

planning document that evidences the 

connection between Affordable Housing 

Activities and Economic Development 

Activities or Community Service 

Facilities. Such documents include, but 

are not limited to, a comprehensive, 

consolidated, or redevelopment plan, or 

some other local or regional planning 

document adopted or approved by the 

jurisdiction; 

(q) Control means: 

(1) Ownership, control, or power to 

vote 25 percent or more of the 

outstanding shares of any class of 

Voting Securities of any company, 

directly or indirectly or acting through 

one or more other persons; 

(2) Control in any manner over the 

election of a majority of the directors, 

trustees, or general partners (or 

individuals exercising similar functions) 

of any company; or 

(3) The power to exercise, directly or 

indirectly, a controlling influence over 


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the management, credit or investment 

decisions, or policies of any company; 

(r) Depository Institution Holding 

Company means a bank holding 

company or a savings and loan holding 

company as defined in section 3 of the 

Federal Deposit Insurance Act, 12 

U.S.C. 1813(w)(1); 

(s) Development means land 

acquisition, demolition of existing 

facilities, and construction of new 

facilities, which may include site 

improvement, utilities development and 

rehabilitation of utilities, necessary 

infrastructure, utility services, 

conversion, and other related activities; 

(t) Economic Development Activity 

means the development, preservation, 

rehabilitation, or purchase of 

Community Service Facilities and/or 

other physical structures in which 

neighborhood-based businesses operate 

which, In Conjunction With Affordable 

Housing Activities, implements a 

Concerted Strategy to stabilize or 

revitalize a Low-Income Area or 

Underserved Rural Area; 

(u) Eligible-Income means: 

(1) In the case of owner-occupied 

housing units, income not in excess of 

120 percent of the area median income; 

and 

(2) In the case of rental housing units, 

income not in excess of 120 percent of 

the area median income, with 

adjustments for smaller and larger 

families, as determined by HUD; 

(v) Eligible Project Costs means 

Leverage Costs plus those costs funded 

directly by a CMF award, exclusive of 

Operations; 

(w) Extremely Low-Income means: 

(1) In the case of owner-occupied 

housing units, income not in excess of 

30 percent of the area median income; 

and 

(2) In the case of rental housing units, 

income not in excess of 30 percent of 

the area median income, with 

adjustments for smaller and larger 

families, as determined by HUD; 

(x) Families means households that 

reside within the boundaries of the 

United Sates (which shall encompass 

any State of the United States, the 

District of Columbia or any territory of 

the United States, Puerto Rico, Guam, 

American Samoa, the Virgin Islands, 

and the Northern Mariana Islands) and 

that meet the criteria set forth in 

§ 1807.104(u), (w), (jj) or (fff); 

(y) HOME Program means the HOME 

Investment Partnership Program set 

forth in the HOME Investment 

Partnerships Act under title II of the 

Cranston-Gonzalez National Affordable 

Housing Act, as amended, 42 U.S.C. 

12701 et seq.; 

(z) Homeownership means ownership 

in fee simple title or a 99-year leasehold 

interest in a one- to four-unit dwelling 

or in a condominium unit, or equivalent 

form of ownership (which shall include 

cooperative housing and mutual 

housing project). For purposes of 

housing located on trust or restricted 

Indian lands, homeownership includes 

leases of 50 years. The ownership 

interest may be subject only to the 

following: 

(1) Restrictions on resale permitted 

under the Assistance Agreement; 

(2) Mortgages, deeds of trust, or other 

liens or instruments securing debt on 

the property; or 

(3) Any other restrictions or 

encumbrances that do not impair the 

good and marketable nature of title to 

the ownership interest; 

(aa) Housing means single- and multifamily residential units, including, but 

not limited to, manufactured housing 

and manufactured housing lots, 

permanent housing for disabled and/or 

homeless persons, transitional housing, 

single-room occupancy housing, and 

group homes. Housing also includes 

elder cottage housing opportunity 

(ECHO), as described in 24 CFR 92.258; 

(bb) HUD means the Department of 

Housing and Urban Development 

established under the Department of 

Housing and Urban Development Act of 

1965, 42 U.S.C. 3532–3537; 

(cc) In Conjunction With means 

physically proximate to Affordable 

Housing and reasonably available to 

residents of Affordable Housing. For a 

Metropolitan Area, In Conjunction With 

means located within the same census 

tract or within 2 miles of the Affordable 

Housing. For a Non-Metropolitan Area, 

In Conjunction With means located 

within the same county, township, or 

village, or within 20 miles of the 

Affordable Housing; 

(dd) Insured CDFI means a Certified 

CDFI that is an Insured Depository 

Institution or an Insured Credit Union; 

(ee) Insured Credit Union means any 

credit union, the member accounts of 

which are insured by the National 

Credit Union Share Insurance Fund by 

the National Credit Union 

Administration pursuant to authority 

granted in 12 U.S.C. 1783 et seq.; 

(ff) Insured Depository Institution 

means any bank or thrift, the deposits of 

which are insured by the Federal 

Deposit Insurance Corporation as 

determined in 12 U.S.C. 1813(c)(2); 

(gg) Leveraged Costs means those 

costs as described in 12 CFR 1807.500; 

(hh) Loan Guarantee means an 

agreement to indemnify the holder of a 

loan all or a portion of the unpaid 

principal balance in case of default by 

the borrower; 

(ii) Loan Loss Reserves means funds 

that the Applicant or Awardee will set 

aside in the form of cash reserves, or 

through accounting-based accrual 

reserves, to cover losses on loans, 

accounts, and notes receivable, or for 

related purposes that the CDFI Fund 

deems appropriate; 

(jj) Low-Income means: 

(1) In the case of owner-occupied 

housing units, income not in excess of 

80 percent of area median income; and 

(2) In the case of rental housing units, 

income not in excess of 80 percent of 

area median income, with adjustments 

for smaller and larger families, as 

determined by HUD; 

(kk) Low-Income Area (LIA) means a 

census tract or block numbering area in 

which the median income does not 

exceed 80 percent of the median income 

for the area in which such census tract 

or block numbering area is located. With 

respect to a census tract or block 

numbering area located within a 

Metropolitan Area, the median family 

income shall be at or below 80 percent 

of the Metropolitan Area median family 

income or the national Metropolitan 

Area median family income, whichever 

is greater. In the case of a census tract 

or block numbering area located outside 

of a Metropolitan Area, the median 

family income shall be at or below 80 

percent of the statewide NonMetropolitan Area median family 

income or the national NonMetropolitan Area median family 

income, whichever is greater; 

(ll) Low Income Housing Tax Credit 

Program or LIHTC Program means the 

program as set forth under Title I of the 

U.S. Housing Act of 1937, as amended, 

42 U.S.C. 1437 et seq.; 

(mm) Metropolitan Area means an 

area designated as such by the Office of 

Management and Budget pursuant to 44 

U.S.C. 3504(e) and 31 U.S.C. 1104(d) 

and Executive Order 10253 (3 CFR, 

1949–1953 Comp., p. 758), as amended; 

(nn) Multi-family housing means 

residential properties consisting of five 

or more dwelling units, such as a 

condominium unit, cooperative unit, 

apartment or townhouse; 

(oo) Non-Metropolitan Area means an 

area set forth in the Assistance 

Agreement; 

(pp) Nonprofit Organization means 

any corporation, trust, association, 

cooperative, or other organization that 

is: 

(1) Designated as a nonprofit or notfor-profit entity under the laws of the 

organization’s State of formation; and 


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(2) Exempt from Federal income 

taxation pursuant to the Internal 

Revenue Code of 1986; 

(qq) Non-Regulated CDFI means any 

entity meeting the eligibility 

requirements described in 12 CFR 

1805.200 which is not a Depository 

Institution Holding Company, Insured 

Depository Institution, or Insured Credit 

Union; 

(rr) Operations means all allowable 

expenses as defined by Office of 

Management and Budget (OMB) 

Circular A–122, ‘‘Cost Principles For 

Non-Profit Organizations,’’ and OMB 

Circular A–87, ‘‘Cost Principles for 

State, Local, and Indian Tribal 

Governments,’’ incurred by the Awardee 

in the administration, operation, and 

implementation of a CMF award; 

(ss) Participating Jurisdiction means a 

jurisdiction designated by HUD, as a 

participating jurisdiction under the 

HOME Program in accordance with the 

requirements of 24 CFR 92.105; 

(tt) Preservation means: 

(1) Activities to refinance, with or 

without Rehabilitation, single-family or 

multi-family rental property mortgages 

that, at the time of refinancing, are 

subject to affordability and use 

restrictions under State or Federal 

affordable housing programs, including 

but not limited to, the HOME Program, 

the LIHTC Program, the Section 8 

Tenant-Based Assistance and the 

Section 8 Rental Voucher programs (24 

CFR part 982), or the Section 515 Rural 

Rental Housing program (7 CFR part 

3560), hereinafter referred to as ‘‘similar 

State or Federal affordable housing 

programs,’’ where such refinancing has 

the effect of extending the term of any 

affordability and use restrictions on the 

properties; 

(2) Activities to refinance and acquire 

single-family or multi-family properties 

that, at the time of refinancing or 

acquisition, were subject to affordability 

and use restrictions under similar State 

or Federal affordable housing programs, 

by the former tenants of such properties, 

where such refinancing has the effect of 

extending the term of any affordability 

and use restrictions on the properties; 

(3) Activities to refinance the 

mortgages of single-family, owneroccupied housing that at the time of 

refinancing are subject to affordability 

and use restrictions under similar State 

or Federal affordable housing programs, 

where such refinancing has the effect of 

extending the term of any affordability 

and use restrictions on the properties; 

(4) Activities to acquire Single-family 

or Multi-family housing, with or 

without rehabilitation, with the 

commitment to subject the properties to 

the affordability qualifications set forth 

in subpart D of this part; or 

(5) Activities to refinance, with or 

without Rehabilitation, single-family or 

multi-family rental property mortgages, 

with the commitment to subject the 

properties to the affordability 

qualifications set forth in subpart D of 

this part; 

(uu) Project Completion means that all 

of the requirements set forth at 

§ 1807.503 for a project supported by a 

CMF award have been met; 

(vv) Purchase means to provide direct 

financing to a homeowner to acquire 

Homeownership through an exchange of 

money; 

(ww) Rehabilitation means any 

repairs and/or capital improvements 

that contribute to the long-term 

preservation, current building code 

compliance, habitability, sustainability, 

or energy efficiency of Affordable 

Housing. 

(xx) Revolving Loan Fund means a 

pool of funds managed by the Applicant 

or Awardee wherein repayments on 

Affordable Housing Activities loans, 

Economic Development Activities loans 

and/or Community Services Facilities 

loans are used to finance additional 

loans; 

(yy) Risk-Sharing Loan means loans 

for Affordable Housing Activities and/or 

Economic Development Activities in 

which the risk of borrower default is 

shared by the Applicant or Awardee 

with other lenders (e.g., participation 

loans); 

(zz) Service Area means the 

geographic area in which the Applicant 

proposes to use CMF funding, and the 

geographic area approved by the CDFI 

Fund in which the Awardee shall use 

CMF funding as set forth in its 

Assistance Agreement; 

(aaa) Single-family housing means a 

one- to four-family residence, 

condominium unit, cooperative unit, 

combination of manufactured housing 

and lot, or manufactured housing lot; 

(bbb) State means the States of the 

United States, the District of Columbia, 

the Commonwealth of Puerto Rico, the 

Commonwealth of the Northern Mariana 

Island, Guam, the Virgin Islands, 

American Samoa, the Trust Territory of 

the Pacific Islands, and any other 

territory of the United States; 

(ccc) State-Insured Credit Union 

means any credit union that is regulated 

by, and/or the member accounts of 

which are insured by, a State agency or 

instrumentality; 

(ddd) Subsidiary means any company 

which is owned or Controlled directly 

or indirectly by another company; 

(eee) Underserved Rural Area means 

a Non-Metropolitan Area that: 

(1) Qualifies as a Low-Income Area; 

(2) Is experiencing housing stress 

evidenced by 30 percent or more of 

resident households with one or more of 

these four housing conditions in the last 

decennial census: 

(i) Lacked complete plumbing, 

(ii) Lacked complete kitchen, 

(iii) Paid 30 percent or more of 

income for owner costs or rent, or 

(iv) Had more than 1 person per room; 

or 

(3) Is remote-rural county consisting 

of a Non-Metropolitan Area that is also 

not adjacent to a Metropolitan Area; 

(fff) Very Low-Income means: 

(1) In the case of owner-occupied 

housing units, income not greater than 

50 percent of the area median income; 

and 

(2) In the case of rental housing units, 

income not greater than 50 percent of 

the area median income, with 

adjustments for smaller and larger 

families, as determined by HUD. 

§ 1807.105 Waiver authority. 

The CDFI Fund may waive any 

requirement of this part that is not 

required by law upon a determination of 

good cause. Each such waiver shall be 

in writing and supported by a statement 

of the facts and the grounds forming the 

basis of the waiver. For a waiver in an 

individual case, the CDFI Fund must 

determine that application of the 

requirement to be waived would 

adversely affect the achievement of the 

purposes of the Act. For waivers of 

general applicability, the CDFI Fund 

will publish notification of granted 

waivers in the Federal Register. 

§ 1807.106 OMB control number. 

The collection of information 

requirements in this part have been 

approved by the Office of Management 

and Budget and assigned OMB control 

number 1559–0036. 

Subpart B—Eligibility 

§ 1807.200 Applicant eligibility. 

(a) General requirements. An 

Applicant will be deemed eligible for a 

CMF award if it is: 

(1) A Certified or certifiable CDFI. An 

entity may meet the requirements 

described in this paragraph (a)(1) if it is: 

(i) A Certified CDFI, as set forth in 12 

CFR 1805.201, that has been in 

existence as a legally formed entity as 

set forth in the Notice of Funds 

Availability (NOFA) for the applicable 

funding round; or 

(ii) A certifiable CDFI that has been in 

existence as a legally formed entity as 

set forth in the NOFA for the applicable 

round and, although not yet certified as 


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a CDFI, has submitted a complete CDFI 

certification application as of the date 

set forth in the applicable NOFA; or 

(2) A Nonprofit Organization having 

as one of its principal purposes the 

development or management of 

affordable housing. An entity may meet 

the requirements described in this 

paragraph (a)(2) if it: 

(i) Has been in existence as a legally 

formed entity as set forth in the 

applicable NOFA; 

(ii) Demonstrates, through articles of 

incorporation, by-laws, or other boardapproved documents, that the 

development or management of 

affordable housing are among its 

principal purposes; and 

(iii) Can demonstrate that at least onethird of the Applicant’s resources (either 

as a portion of total staffing or as a 

portion of total assets) are dedicated to 

the development or management of 

affordable housing. 

(b) Eligibility verification. An 

Applicant shall demonstrate that it 

meets the eligibility requirements 

described in § 1807.200(a)(2) of this 

section by providing information 

described in the application, NOFA, 

and/or supplemental information, as 

may be requested by the CDFI Fund. For 

an Applicant seeking eligibility under 

§ 1807.200(a)(1), the CDFI Fund will 

verify that the Applicant is a Certified 

CDFI during the application eligibility 

review. For an Applicant seeking 

eligibility under § 1807.200(a)(2), the 

CDFI Fund, in its sole discretion, shall 

determine whether the Applicant has 

satisfied said requirements. 

Subpart C—Use of Funds/Eligible 

Activities 

§ 1807.300 Purposes of grants. 

The CDFI Fund may provide financial 

assistance grants to organizations 

described under subpart B of this part 

for the purpose of attracting private 

capital for and increase investment in: 

(a) The Development, Preservation, 

Rehabilitation, or Purchase of 

Affordable Housing for primarily 

Extremely Low-Income, Very LowIncome, and Low-Income families; and 

(b) Economic Development Activities 

or Community Services Facilities. With 

respect to an Economic Development 

Activity or Community Service Facility 

funded with a CMF grant, the 

Affordable Housing that it is In 

Conjunction With may be financed by 

sources other than the CMF grant. 

§ 1807.301 Eligible activities. 

Grants awarded under this part shall 

be used by an Awardee to support 

Affordable Housing Activities, 

Economic Development Activities or 

Community Service Facilities, including 

the following eligible uses: 

(a) To provide Loan Loss Reserves; 

(b) To capitalize a Revolving Loan 

Fund; 

(c) To capitalize an Affordable 

Housing Fund; 

(d) To capitalize a fund to support 

Economic Development Activities or 

Community Service Facilities; 

(e) For Risk-Sharing Loans; 

(f) For Loan Guarantees; and 

(g) For the Awardee’s Operations. 

§ 1807.302 Restrictions on use of 

assistance. 

(a) An Awardee’s activities under 

§ 1807.301 shall not include the use of 

CMF for the following: 

(1) Political activities; 

(2) Advocacy; 

(3) Lobbying, whether directly or 

through other parties; 

(4) Counseling services (including 

homebuyer or financial counseling); 

(5) Travel expenses; 

(6) Preparing or providing advice on 

tax returns; 

(7) Emergency shelters (including 

shelters for disaster victims); 

(8) Nursing homes; 

(9) Convalescent homes; 

(10) Residential treatment facilities; 

(11) Correctional facilities; or 

(12) Student dormitories. 

(b) An Awardee may use up to a 

percentage of CMF award for Operations 

as specified in the applicable NOFA. 

(c) An Awardee shall not use CMF 

award to support projects that: 

(1) Consist of the operation of any 

private or commercial golf course, 

country club, massage parlor, hot tub 

facility, suntan facility, racetrack or 

other facility used for gambling, or any 

store the principal business of which is 

the sale of alcoholic beverages for 

consumption off premises; 

(2) Consist of farming (within the 

meaning of I.R.C. section 2032A(e)(5)(A) 

or (B)) if, as of the close of the taxable 

year of the taxpayer conducting such 

trade or business, the sum of the 

aggregate unadjusted bases (or, if 

greater, the fair market value) of the 

assets owned by the taxpayer that are 

used in such a trade or business, and the 

aggregate value of the assets leased by 

the taxpayer that are used in such a 

trade or business, exceeds $500,000. 

(d) In any given funding round, no 

more than 30 percent of an Awardee’s 

CMF award may be used for purposes 

described in § 1807.300(b). 

Subpart D—Qualification as Affordable 

Housing 

§ 1807.400 Affordable housing—general. 

Each Awardee that uses CMF funding 

to support Affordable Housing 

Activities shall ensure that 100 percent 

of Eligible Project Costs are attributable 

to housing units that meet the 

affordability qualifications set forth 

below for Eligible-Income Families. In 

addition, greater than 50 percent of the 

Eligible Project Costs must be 

attributable to housing units that meet 

the affordability qualifications set forth 

below for either Low-Income, Very LowIncome, or Extremely Low-Income 

Families. 

§ 1807.401 Affordable housing—rental 

housing. 

To qualify as Affordable Housing, a 

rental Multi-family housing project 

financed with a CMF award must have 

at least 20 percent of the housing units 

occupied by Low-Income, Very LowIncome, or Extremely Low-Income 

Families and must comply with the rent 

limits set forth herein. 

(a) Rent limitation. The maximum 

rent is a rent that does not exceed: 

(1) For an Eligible-Income Family, 30 

percent of the annual income of a family 

whose annual income equals 120 

percent of the area median income, with 

adjustments for smaller and larger 

families, as determined by HUD; 

(2) For a Low-Income Family, 30 

percent of the annual income of a family 

whose annual income equals 80 percent 

of the area median income, with 

adjustments for smaller and larger 

families, as determined by HUD; 

(3) For a Very Low-Income Family, 30 

percent of the annual income of a family 

whose annual income equals 50 percent 

of the area median income, with 

adjustments for smaller and larger 

families, as determined by HUD; or 

(4) For an Extremely Low-Income 

Family, 30 percent of the annual income 

of a family whose annual income equals 

30 percent of the area median income, 

with adjustments for smaller and larger 

families, as determined by HUD. 

(b) Nondiscrimination against rental 

assistance subsidy holders. The 

Awardee shall require that the owner of 

a rental unit cannot refuse to lease the 

unit to a Section 8 Program certificate or 

voucher holder (24 CFR Part 982, 

Section 8 Tenant-Based Assistance: 

Unified Rule for Tenant-Based 

Assistance under the Section 8 Rental 

Certificate Program and the Section 8 

Rental Voucher Program) or to the 

holder of a comparable document 

evidencing participation in a HOME 

tenant-based rental assistance program 


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because of the status of the prospective 

tenant as a holder of such certificate, 

voucher, or comparable HOME tenantbased assistance document. 

(c) Initial rent schedule and utility 

allowances. The Awardee shall ensure 

that the housing adheres to the 

applicable Participating Jurisdiction’s 

maximum monthly allowances for 

utilities and services (excluding 

telephone). If the Participating 

Jurisdiction’s allowances have not been 

determined or are otherwise 

unavailable, the Awardee shall rely 

upon the utility and services allowances 

established by the applicable city, 

county or State public housing 

authority. 

(d) Periods of Affordability. Housing 

under § 1807.401 must meet the 

affordability requirements for not less 

than 10 years, beginning after Project 

Completion and at initial occupancy. 

The affordability requirements apply 

without regard to the term of any loan 

or mortgage or the transfer of ownership 

and must be imposed by deed 

restrictions, covenants running with the 

land, or other recordable mechanisms, 

except that the affordability restrictions 

may terminate upon foreclosure or 

transfer in lieu of foreclosure. Other 

recordable mechanisms must be 

approved in writing and in advance by 

the CDFI Fund. The affordability 

restrictions shall be revived according to 

the original terms if, during the original 

affordability period, the owner of record 

before the foreclosure, or deed in lieu of 

foreclosure, or any entity that includes 

the former owner or those with whom 

the former owner has or had family or 

business ties, obtains an ownership 

interest in the project or property. 

(e) Subsequent rents during the 

affordability period. Any increase in 

rent for a CMF-funded unit requires that 

tenants of those units be given at least 

30 days prior written notice before the 

implementation of the rent increase. 

(f) Tenant income determination. 

(1) Each year during the period of 

affordability the tenant’s income shall 

be re-examined; tenant income 

examination is the responsibility of the 

Awardee. Annual income shall include 

income from all household members. 

(2) One of the following three 

definitions of ‘‘annual income’’ must be 

used to determine whether a family is 

income eligible: 

(i) Annual income as reported under 

the Census long-form for the most recent 

available decennial Census. This 

definition includes: 

(A) Wages, salaries, tips, 

commissions, etc.; 

(B) Self-employment income from 

owned non-farm business, including 

proprietorships and partnerships; 

(C) Farm self-employment income; 

(D) Interest, dividends, net rental 

income, or income from estates or trusts; 

(E) Social Security or railroad 

retirement; 

(F) Supplemental Security Income, 

Aid to Families with Dependent 

Children, or other public assistance or 

public welfare programs; 

(G) Retirement, survivor, or disability 

pensions; 

(H) Any other sources of income 

received regularly, including Veterans’ 

(VA) payments, unemployment 

compensation, and alimony; and 

(I) Any other sources of income the 

CDFI Fund may deem appropriate; 

(ii) Adjusted gross income as defined 

for purposes of reporting under Internal 

Revenue Service (IRS) Form 1040 series 

for individual Federal annual income 

tax purposes; or 

(iii) ‘‘Annual Income’’ as defined at 24 

CFR 5.609 (except that when 

determining the income of a homeowner 

for an owner-occupied rehabilitation 

project, the value of the homeowner’s 

principal residence may be excluded 

from the calculation of net family 

assets). 

(3) Although any of the above three 

definitions of ‘‘annual income’’ are 

permitted, in order to calculate adjusted 

income, exclusions from income set 

forth at 24 CFR 5.611 shall be applied. 

(4) The CDFI Fund reserves the right 

to deem certain government programs, 

under which a Low-Income family is a 

recipient, as income eligible for 

purposes of meeting the tenant income 

requirements under this subsection. 

(g) Over-income tenants. (1) CMFfunded units continue to qualify as 

Affordable Housing despite a temporary 

noncompliance caused by increases in 

the incomes of existing tenants if 

actions satisfactory to the CDFI Fund are 

being taken to ensure that all vacancies 

are filled in accordance with this 

section until the noncompliance is 

corrected. 

(2) Tenants whose incomes no longer 

qualify must pay rent no greater than 

the lesser of the amount payable by the 

tenant under State or local law or 30 

percent of the family’s annual income, 

except that tenants of units that have 

been allocated low-income housing tax 

credits by a housing credit agency 

pursuant to section 42 of the Internal 

Revenue Code of 1986, I.R.C. section 42, 

must pay rent governed by section 42. 

Tenants who no longer qualify as 

Eligible-Income are not required to pay 

as rent an amount that exceeds the 

market rent for comparable, unassisted 

units in the neighborhood. 

(3) If the income of a tenant of a CMFfunded unit no longer qualifies, the 

Awardee may designate another unit, in 

the CMF-funded project, as a 

replacement unit that meets the 

affordability qualifications for EligibleIncome, Low-Income, Very Low-Income, 

or Extremely Low-Income Families and 

as set forth in the Awardee’s Assistance 

Agreement. If there is not an available 

replacement unit, the Awardee must fill 

the first available vacancy with a tenant 

that meets the affordability 

qualifications for Eligible-Income, LowIncome, Very Low-Income, or Extremely 

Low-Income Families as necessary to 

maintain compliance with the CMF 

requirements and the Assistance 

Agreement. 

§ 1807.402 Affordable housing— 

homeownership. 

(a) Acquisition with or without 

rehabilitation. Housing that is for 

Homeownership purchase must meet 

the affordability requirements of this 

subsection. 

(1) The housing must be Single-family 

housing. 

(2) The housing price does not exceed 

95 percent of the median purchase price 

for the area as used in the HOME 

Program and as determined by the 

applicable Participating Jurisdiction. 

(3) The housing must be purchased by 

a qualifying family as set forth in 

§ 1807.400. The housing must be the 

principal residence of the family 

throughout the period described in 

paragraph (a)(4) of this section. 

(4) Periods of Affordability. Housing 

under this subsection must meet the 

affordability requirements for at least 10 

years at the time of purchase by the 

homeowner. 

(5) Resale. To ensure that CMF awards 

are being used for qualifying families for 

the entire 10-year affordability period, 

recoupment and redeployment or resale 

strategies must be imposed by the 

Awardee. A recoupment strategy must 

ensure that, in the event the qualifying 

homeowner sells the housing before the 

end of the 10-year affordability period 

and the new homeowner does not meet 

the affordability qualifications set forth 

in § 1807.400, the portion of the CMF 

award used to finance the Affordable 

Housing Activity is recouped and 

redeployed to a qualifying family for 

affordable housing homeownership in 

the manner set forth in § 1807.402, 

except that the housing must meet the 

affordability requirements only for the 

remaining affordability period. The 

Awardee may design and implement its 

own recoupment strategy. Deed 


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restrictions, covenants running with the 

land, or other similar mechanisms may 

be used as the mechanism to impose the 

resale strategy. The Awardee shall 

report to the CDFI Fund the event of 

resale, recoupment and redeployment of 

the CMF award in the manner described 

in the Assistance Agreement. The 

affordability restrictions may terminate 

upon occurrence of any of the following 

termination events: Foreclosure, transfer 

in lieu of foreclosure or assignment of 

an FHA-insured mortgage to HUD. The 

Awardee may use purchase options, 

rights of first refusal or other preemptive 

rights to purchase the housing before 

foreclosure to preserve affordability. 

The affordability restrictions shall be 

revived according to the original terms 

if, during the original affordability 

period, the owner of record before the 

termination event, obtains an ownership 

interest in the housing. 

(b) Rehabilitation not involving 

acquisition. Housing that is currently 

owned by a qualifying family, as set 

forth in § 1807.400, qualifies as 

Affordable Housing if it meets the 

requirements of this subsection. 

(1) The estimated value of the 

housing, after Rehabilitation, does not 

exceed 95 percent of the median 

purchase price for the area, as used in 

the HOME Program and as determined 

by the applicable Participating 

Jurisdiction; or 

(2) The housing is the principal 

residence of a qualifying family as set 

forth in § 1807.400, at the time that CMF 

funding is Committed to the housing. 

(3) Housing under this subsection 

must meet the affordability 

requirements for at least 10 years after 

Rehabilitation is completed or meet the 

resale provisions of § 1807.402(a)(5). 

(c) Ownership interest. The ownership 

in the housing assisted under this 

section must meet the definition of 

‘‘Homeownership’’ as defined in 

§ 1807.104(z). 

(d) New construction without 

acquisition. Newly constructed housing 

that is built on property currently 

owned by a family which will occupy 

the housing upon completion, qualifies 

as Affordable Housing if it meets the 

requirements under paragraph (a) of this 

section. 

(e) Converting rental units to 

Homeownership units for existing 

tenants. CMF-funded rental units may 

be converted to Homeownership units 

by selling, donating, or otherwise 

conveying the units to the existing 

tenants to enable the tenants to become 

homeowners in accordance with the 

requirements of § 1807.402. The 

Homeownership units are subject to a 

minimum period of affordability equal 

to the remaining affordability period. 

Subpart E—Leveraging and 

Commitment Requirement 

§ 1807.500 Leveraged costs—general. 

(a) Each CMF grant is expected to 

result in Eligible Project Costs that total 

at least 10 times the grant amount. Such 

costs may be for activities that include 

Affordable Housing Activities, 

Economic Development Activities, or 

Community Service Facilities. Thus, an 

Awardee shall demonstrate that it 

leveraged, over its CMF funded 

portfolio, its CMF award at least 10 

times the CMF grant amount or some 

other standard established by the CDFI 

Fund in the Awardee’s Assistance 

Agreement. Leveraged Costs are costs 

that exceed the dollar amount of the 

Awardee’s CMF contribution to each 

CMF-funded activity. However, the 

applicable NOFA may set forth a 

required percentage of Leveraged Costs 

that must be attributable to nongovernmental sources. An Awardee may 

report to the CDFI Fund all Leveraged 

Costs, with the following limitations: 

(1) No costs attributable to Operations 

may be reported as Leveraged Costs. 

(2) No costs attributable to prohibited 

uses as identified in § 1807.302(a) and 

(c) may be reported as Leveraged Costs. 

(3) All costs attributable to Affordable 

Housing Activities reported as 

Leveraged Costs must be for housing 

units that qualify as Affordable Housing 

under § 1807.401 or § 1807.402 for 

Eligible-Income Families. 

(b) Awardees shall self-report 

leveraging information through forms or 

electronic systems developed by the 

CDFI Fund, subject to audit 

requirements set forth herein. 

Consequently, Awardees shall maintain 

appropriate documentation, such as 

audited financial statements, wire 

transfers documents, pro-formas, and 

other relevant records, to support its 

reports. 

§ 1807.501 Commitment for use. 

(a) CMF awards shall be Committed 

for use by the date designated in the 

Awardee’s Assistance Agreement. An 

Awardee shall demonstrate that its CMF 

award is Committed by having executed 

a written, legally binding agreement 

under which CMF assistance will be 

provided to the developer or project 

sponsor for an identifiable project under 

which: 

(1) Construction can reasonably be 

expected to start within 12 months of 

the agreement date; or 

(2) Property title will be transferred 

within six months of the agreement 

date. 

(b) An Awardee shall make an initial 

disbursement of its CMF award for 

Affordable Housing Activities, 

Economic Development Activities or 

Community Service Facilities by the 

date designated in its Assistance 

Agreement. 

§ 1807.502 Assistance limits. 

An eligible Applicant and its 

Subsidiaries and Affiliates may not be 

awarded more than 15 percent of the 

aggregate funds available for CMF grants 

during any funding year. 

§ 1807.503 Project completion. 

Once a CMF-funded project has been 

completed, it must be placed into 

service by the date designated in the 

Awardee’s Assistance Agreement. 

Project Completion occurs, as 

determined by the CDFI Fund, when: 

(a) All necessary title transfer 

requirements and construction work 

have been performed; 

(b) The project complies with the 

requirements of this part, including the 

following property standards (these 

property standards must be complied 

with at the time of Project Completion 

and maintained for a period of at least 

10 years thereafter): 

(1) Housing that is constructed or 

rehabilitated with CMF funding must 

meet all applicable local codes, 

rehabilitation standards, ordinances, 

and zoning ordinances at the time of 

project completion. In the absence of a 

local code for new construction or 

rehabilitation, such housing must meet, 

as applicable: One of three model codes 

(Uniform Building Code (ICBO), 

National Building Code (BOCA), 

Standard (Southern) Building Code 

(SBCCI)); or the Council of American 

Building Officials (CABO) one or two 

family code; or the Minimum Property 

Standards (MPS) in 24 CFR 200.925 or 

200.926. Newly constructed housing 

must meet the current edition of the 

Model Energy Code published by the 

Council of American Building Officials. 

(2) The housing must meet the 

accessibility requirements at 24 CFR 

part 8, which implements section 504 of 

the Rehabilitation Act of 1973 (29 U.S.C. 

794) and covered multifamily dwellings, 

as defined at 24 CFR 100.201, must also 

meet the design and construction 

requirements at 24 CFR 100.205, which 

implements the Fair Housing Act (42 

U.S.C. 3601–3619). 

(3) Construction of all manufactured 

housing must meet the Manufactured 

Home Construction and Safety 

Standards established in 24 CFR part 

3280. These standards pre-empt State 

and local codes covering the same 

aspects of performance for such 


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housing. The installation of all 

manufactured housing units must 

comply with applicable State and local 

laws or codes. In the absence of such 

laws or codes, the installation must 

comply with the manufacturer’s written 

instructions for installation of 

manufactured housing units. 

Manufactured housing that is 

rehabilitated using CMF funds must 

meet the requirements set out in 

paragraph (b)(1) of this section; and 

(c) The final drawdown has been 

disbursed for the project. 

Subpart F—Tracking Requirements 

§ 1807.600 Tracking funds—general. 

An Awardee receiving a CMF award 

shall develop and maintain a system to 

ensure that its CMF award is used in 

accordance with this part, the Act, its 

Assistance Agreement, and any 

requirements or conditions under which 

such amounts were awarded. Thus, an 

Awardee may create a separate account 

or accounting code for CMF activities. 

§ 1807.601 Nature of funds. 

A CMF award shall be considered 

Federal financial assistance in regards to 

applying Federal civil rights laws. 

Subpart G—Applications for 

Assistance 

§ 1807.700 Notice of funds availability. 

Each Applicant shall submit an 

application for funding under this part 

in accordance with the regulations in 

this subpart. The applicable NOFA will 

advise potential Applicants on how to 

obtain and complete an application and 

will establish deadlines and other 

requirements. The NOFA will specify 

any limitations, special rules, 

procedures, and restrictions for a 

particular funding round. After receipt 

of an application, the CDFI Fund may 

request clarifying or technical 

information on the materials submitted 

as part of such application. 

Subpart H—Evaluation and Selection 

of Applications 

§ 1807.800 Evaluation and selection— 

general. 

Applicants will be evaluated and 

selected, at the sole discretion of the 

CDFI Fund, to receive assistance based 

on a review process that may include an 

interview(s) and/or site visit(s) intended 

to: 

(a) Ensure that Applicants are 

evaluated on a merit basis and in a fair 

and consistent manner; 

(b) Ensure that each Awardee can 

successfully meet its leveraging goals 

and achieve Affordable Housing 

Activity, Community Service Facility 

and/or Economic Development Activity 

impacts; 

(c) Ensure that Awardees represent a 

geographically diverse group of 

Applicants serving Metropolitan Areas 

and Underserved Rural Areas across the 

United States that meet criteria of 

economic distress, which may include: 

(1) The percentage of Low-Income 

Families or the extent of poverty; 

(2) The rate of unemployment or 

underemployment; 

(3) The extent of blight and 

disinvestment; 

(4) Economic Development Activities 

or Community Service Facilities that 

target Extremely Low-Income, Very 

Low-Income, and Low-Income families 

within the Awardee’s Service Area; or 

(5) Any other criteria the CDFI Fund 

shall set forth in the applicable NOFA; 

and 

(d) Take into consideration other 

factors as described in the applicable 

NOFA. 

§ 1807.801 Evaluation of applications. 

(a) Eligibility and completeness. An 

Applicant will not be eligible to receive 

a CMF award if it fails to meet the 

eligibility requirements described in 

Part 1807.200 and in the applicable 

NOFA, or if the Applicant has not 

submitted complete application 

materials. For the purposes of this 

paragraph (a), the CDFI Fund reserves 

the right to request additional 

information from the Applicant, if the 

CDFI Fund deems it appropriate. 

(b) Substantive review. In evaluating 

and selecting applications to receive 

assistance, the CDFI Fund will evaluate 

the Applicant’s likelihood of success in 

meeting the factors set forth in the 

applicable NOFA, including but not 

limited to: 

(1) The Applicant’s ability to use CMF 

funding to generate additional 

investments; 

(2) The need for affordable housing in 

the Applicant’s market; and 

(3) The ability of the Applicant to 

obligate amounts and undertake 

activities in a timely manner. In the case 

of an Applicant that has previously 

received assistance under any CDFI 

Fund program, the CDFI Fund will also 

consider the Applicant’s level of success 

in meeting its performance goals, 

reporting requirements, and other 

requirements contained in the 

previously negotiated and executed 

assistance, allocation or award 

agreement(s) with the CDFI Fund, any 

undisbursed balance of assistance, and 

compliance with applicable Federal 

laws. The CDFI Fund may consider any 

other factors, as it deems appropriate, in 

reviewing an application, as set forth in 

the applicable NOFA. 

(c) Consultation with appropriate 

regulatory agencies. In the case of an 

Applicant that is a federally-regulated 

financial institution, the CDFI Fund 

may consult with the Appropriate 

Federal Banking Agency or Appropriate 

State Agency prior to making a final 

award decision and prior to entering 

into an Assistance Agreement. 

(d) Awardee selection. The CDFI Fund 

will select CMF Awardees based on the 

criteria described in paragraph (b) of 

this section and any other criteria set 

forth in this part or the applicable 

NOFA. 

Subpart I —Terms and Conditions of 

Assistance 

§ 1807.900 Assistance agreement. 

(a) Each Applicant that is selected to 

receive a CMF award must enter into an 

Assistance Agreement with the CDFI 

Fund. The Assistance Agreement will 

set forth certain required terms and 

conditions of the Assistance Agreement 

which may include, but are not limited 

to, the following: 

(1) The amount of the award; 

(2) The approved uses of the award; 

(3) The approved Service Area in 

which the award may be used; 

(4) The time period by which the 

award proceeds must be Committed; 

(5) The required documentation to 

evidence Project Completion; and 

(6) Performance goals that have been 

established by the CDFI Fund based 

upon the Awardee’s application. 

(b) The Assistance Agreement shall 

provide that in the event of fraud, 

mismanagement, noncompliance with 

the Act or the CDFI Fund’s regulations; 

or noncompliance with the terms and 

conditions of the Assistance Agreement 

on the part of the Awardee; the CDFI 

Fund, in its discretion, may: 

(1) Require changes in the 

performance goals set forth in the 

Assistance Agreement; 

(2) Revoke approval of the Awardee’s 

Application; 

(3) Reduce or terminate the Awardee’s 

assistance; 

(4) Require repayment of any 

assistance that has been distributed to 

the Awardee; 

(5) Bar the Awardee from reapplying 

for any assistance from the CDFI Fund; 

or 

(6) Take such other actions as the 

CDFI Fund deems appropriate or as set 

forth in the Assistance Agreement. 

(c) Prior to imposing any sanctions 

pursuant to this section or an Assistance 

Agreement, the CDFI Fund shall, to the 

maximum extent practicable, provide 


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the Awardee with written notice of the 

proposed sanction and an opportunity 

to comment. Nothing in this section, 

however, shall provide an Awardee the 

right to any formal or informal hearing 

or comparable proceeding not otherwise 

required by law. 

§ 1807.901 Disbursement of funds. 

Assistance provided pursuant to this 

part may be provided in a lump sum or 

in some other manner, as determined 

appropriate by the CDFI Fund. The 

CDFI Fund shall not provide any 

assistance under this part until an 

Awardee has satisfied all conditions set 

forth in the applicable NOFA and 

Assistance Agreement. 

§ 1807.902 Data collection and reporting. 

(a) Data—General. An Awardee shall 

maintain such records as may be 

prescribed by the CDFI Fund that are 

necessary to: 

(1) Disclose the manner in which 

CMF funding is used, including 

providing documentation to 

demonstrate Project Completion; 

(2) Demonstrate compliance with the 

requirements of this part and the 

Assistance Agreement; and 

(3) Evaluate the impact of CMF 

funding. 

(b) Customer profiles. An Awardee 

shall compile such data on the gender, 

race, ethnicity, national origin, or other 

information on individuals that utilize 

its products and services as the CDFI 

Fund shall prescribe in an Assistance 

Agreement. Such data will be used to 

determine whether residents of the 

Awardee’s Service Area are adequately 

served and to evaluate the impact of 

CMF funding. 

(c) Access to records. An Awardee 

must submit such financial and activity 

reports, records, statements, and 

documents at such times, in such forms, 

and accompanied by such reporting 

data, as required by the CDFI Fund or 

the U.S. Department of Treasury to 

ensure compliance with the 

requirements of this part and to evaluate 

the impact of CMF funding. The United 

States Government, including the U.S. 

Department of Treasury, the 

Comptroller General, and their duly 

authorized representatives, shall have 

full and free access to the Awardee’s 

offices and facilities and all books, 

documents, records, and financial 

statements relating to use of Federal 

funds and may copy such documents as 

they deem appropriate and audit or 

provide for an audit at least annually. 

The CDFI Fund, if it deems appropriate, 

may prescribe access to record 

requirements for entities that are 

borrowers of, or that receive 

investments from, an Awardee. 

(d) Retention of records. An Awardee 

shall comply with all record retention 

requirements as set forth in OMB 

Circular A–110 (as applicable). 

(e) Data collection and reporting. 

(1) Financial Reporting: (i) All NonProfit Awardees (excluding Insured 

CDFIs and State-Insured Credit Unions) 

must submit to the CDFI Fund financial 

statements that have been reviewed by 

an independent certified public 

accountant in accordance with 

Statements on Standards for Accounting 

and Review Services, issued by the 

American Institute of Certified Public 

Accountants by a time set forth in the 

applicable Notice of Funding 

Availability or Assistance Agreement 

(audited financial statements can be 

provided by the due date in lieu of 

reviewed statements, if available). NonProfit Awardees (excluding Insured 

CDFIs and State-Insured Credit Unions) 

that are required to have their financial 

statements audited pursuant to OMB 

Circular A–133 Audits of States, Local 

Governments and Non-Profit 

Organizations, must also submit their 

A–133 audited financial statements by a 

time set forth in the applicable NOFA or 

Assistance Agreement. Non-Profit 

Awardees (excluding Insured CDFIs and 

State-Insured Credit Unions) that are not 

required to have financial statements 

audited pursuant to OMB Circular A– 

133, Audits of States, Local 

Governments and Non-Profit 

Organizations, must submit to the CDFI 

Fund a statement signed by the 

Awardee’s authorized representative or 

certified public accountant, asserting 

that the Awardee is not required to have 

a single audit pursuant OMB Circular 

A–133. 

(ii) For-profit Awardees (excluding 

Insured CDFIs and State-Insured Credit 

Unions) must submit to the CDFI Fund 

financial statements audited in 

conformity with generally accepted 

auditing standards as promulgated by 

the American Institute of Certified 

Public by a time set forth in the 

applicable NOFA or Assistance 

Agreement. 

(iii) Insured CDFIs are not required to 

submit financial statements to the CDFI 

Fund. The CDFI Fund will obtain the 

necessary information from publicly 

available sources. State-Insured Credit 

Unions must submit to the CDFI Fund 

copies of the financial statements that 

they submit to the Appropriate State 

Agency. 

(2) Performance Goal Reporting: 

Performance goals and measures that are 

specific to the Awardee’s application for 

funding shall be met as set forth in its 

Assistance Agreement. Awardees shall 

submit data and information to the CDFI 

Fund regarding achievement of these 

Performance Goals as described in the 

Assistance Agreement. 

(f) Availability of referenced 

publications. The publications 

referenced in this section are available 

as follows: 

(1) OMB Circulars may be obtained 

from the Office of Administration, 

Publications Office, 725 17th Street, 

NW., Room 2200, New Executive Office 

Building, Washington, DC 20503 or on 

the Internet (http:// 

www.whitehouse.gov/omb/ 

grants_circulars/); and 

(2) General Accounting Office 

materials may be obtained from GAO 

Distribution, 700 4th Street, NW., Suite 

1100, Washington, DC 20548. 

§ 1807.903 Compliance with government 

requirements. 

In carrying out its responsibilities 

pursuant to an Assistance Agreement, 

the Awardee shall comply with all 

applicable Federal, State, and local 

laws, regulations, and ordinances, OMB 

Circulars, and Executive Orders. 

§ 1807.904 Lobbying restrictions. 

No assistance made available under 

this part may be expended by an 

Awardee to pay any person to influence 

or attempt to influence any agency, 

elected official, officer or employee of a 

State or local government in connection 

with the making, award, extension, 

continuation, renewal, amendment, or 

modification of any State or local 

government contract, grant, loan or 

cooperative agreement as such terms are 

defined in 31 U.S.C. 1352. 

§ 1807.905 Criminal provisions. 

The criminal provisions of 18 U.S.C. 

657 regarding embezzlement or 

misappropriation of funds is applicable 

to all Awardees and insiders. 

§ 1807.906 CDFI Fund deemed not to 

control. 

The CDFI Fund shall not be deemed 

to control an Awardee by reason of any 

assistance provided under the Act for 

the purpose of any applicable law. 

§ 1807.907 Limitation on liability. 

The liability of the CDFI Fund and the 

United States Government arising out of 

any assistance to an Awardee in 

accordance with this part shall be 

limited to the amount of the investment 

in the Awardee. The CDFI Fund shall be 

exempt from any assessments and other 

liabilities that may be imposed on 

controlling or principal shareholders by 

any Federal law or the law of any State. 


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Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Rules and Regulations 75389 

Nothing in this section shall affect the 

application of any Federal tax law. 

§ 1807.908 Fraud, waste and abuse. 

Any person who becomes aware of 

the existence or apparent existence of 

fraud, waste or abuse of assistance 

provided under this part should report 

such incidences to the Office of 

Inspector General of the U.S. 

Department of the Treasury. 

Dated: November 24, 2010. 

Donna J. Gambrell, 

Director, Community Development Financial 

Institutions Fund. 

[FR Doc. 2010–30303 Filed 12–2–10; 8:45 am] 

BILLING CODE 4810–70–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 180 

[EPA–HQ–OPP–2008–0732; FRL–8854–6] 

Metrafenone; Pesticide Tolerances 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: This regulation establishes 

tolerances for residues of metrafenone 

(3-bromo-6-methoxy-2- 

methylphenyl)(2,3,4-trimethoxy-6- 

methylphenyl)methanone in or on 

grapes. BASF Corporation requested 

these tolerances under the Federal Food, 

Drug, and Cosmetic Act (FFDCA). 

DATES: This regulation is effective 

December 3, 2010. Objections and 

requests for hearings must be received 

on or before February 1, 2011, and must 

be filed in accordance with the 

instructions provided in 40 CFR part 

178 (see also Unit I.C. of the 

SUPPLEMENTARY INFORMATION). 

ADDRESSES: EPA has established a 

docket for this action under docket 

identification (ID) number EPA–HQ– 

OPP–2008–0732. All documents in the 

docket are listed in the docket index 

available at http://www.regulations.gov. 

Although listed in the index, some 

information is not publicly available, 

e.g., Confidential Business Information 

(CBI) or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, is not placed on 

the Internet and will be publicly 

available only in hard copy form. 

Publicly available docket materials are 

available in the electronic docket at 

http://www.regulations.gov, or, if only 

available in hard copy, at the OPP 

Regulatory Public Docket in Rm. 

S–4400, One Potomac Yard (South 

Bldg.), 2777 S. Crystal Dr., Arlington, 

VA. The Docket Facility is open from 

8:30 a.m. to 4 p.m., Monday through 

Friday, excluding legal holidays. The 

Docket Facility telephone number is 

(703) 305–5805. 

FOR FURTHER INFORMATION CONTACT: 

Tawanda Maignan, Registration 

Division (7505P), Office of Pesticide 

Programs, Environmental Protection 

Agency, 1200 Pennsylvania Ave., NW., 

Washington, DC 20460–0001; telephone 

number: (703) 308–8050; e-mail 

address: maignan.tawanda@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. General Information 

A. Does this action apply to me? 

You may be potentially affected by 

this action if you are an agricultural 

producer, food manufacturer, or 

pesticide manufacturer. Potentially 

affected entities may include, but are 

not limited to those engaged in the 

following activities: 

• Crop production (NAICS code 111). 

• Animal production (NAICS code 

112). 

• Food manufacturing (NAICS code 

311). 

• Pesticide manufacturing (NAICS 

code 32532). 

This listing is not intended to be 

exhaustive, but rather to provide a guide 

for readers regarding entities likely to be 

affected by this action. Other types of 

entities not listed in this unit could also 

be affected. The North American 

Industrial Classification System 

(NAICS) codes have been provided to 

assist you and others in determining 

whether this action might apply to 

certain entities. If you have any 

questions regarding the applicability of 

this action to a particular entity, consult 

the person listed under FOR FURTHER

INFORMATION CONTACT. 

B. How can I get electronic access to 

other related information? 

You may access a frequently updated 

electronic version of EPA’s tolerance 

regulations at 40 CFR part 180 through 

the Government Printing Office’s e-CFR 

site at http://www.gpoaccess.gov/ecfr. 

To access the harmonized test 

guidelines referenced in this document 

electronically, please go http:// 

www.epa.gov/ocspp and select ‘‘Test 

Methods and Guidelines.’’ 

C. How can I file an objection or hearing 

request? 

Under FFDCA section 408(g), 21 

U.S.C. 346a, any person may file an 

objection to any aspect of this regulation 

and may also request a hearing on those 

objections. You must file your objection 

or request a hearing on this regulation 

in accordance with the instructions 

provided in 40 CFR part 178. To ensure 

proper receipt by EPA, you must 

identify docket ID number EPA–HQ– 

OPP–2008–0732 in the subject line on 

the first page of your submission. All 

objections and requests for a hearing 

must be in writing, and must be 

received by the Hearing Clerk on or 

before February 1, 2011. Addresses for 

mail and hand delivery of objections 

and hearing requests are provided in 40 

CFR 178.25(b). 

In addition to filing an objection or 

hearing request with the Hearing Clerk 

as described in 40 CFR part 178, please 

submit a copy of the filing that does not 

contain any CBI for inclusion in the 

public docket. Information not marked 

confidential pursuant to 40 CFR part 2 

may be disclosed publicly by EPA 

without prior notice. Submit a copy of 

your non-CBI objection or hearing 

request, identified by docket ID number 

EPA–HQ–OPP–2008–0732, by one of 

the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the on-line 

instructions for submitting comments. 

• Mail: Office of Pesticide Programs 

(OPP) Regulatory Public Docket (7502P), 

Environmental Protection Agency, 1200 

Pennsylvania Ave., NW., Washington, 

DC 20460–0001. 

• Delivery: OPP Regulatory Public 

Docket (7502P), Environmental 

Protection Agency, Rm. S–4400, One 

Potomac Yard (South Bldg.), 2777 S. 

Crystal Dr., Arlington, VA. Deliveries 

are only accepted during the Docket 

Facility’s normal hours of operation 

(8:30 a.m. to 4 p.m., Monday through 

Friday, excluding legal holidays). 

Special arrangements should be made 

for deliveries of boxed information. The 

Docket Facility telephone number is 

(703) 305–5805. 

II. Summary of Petitioned-For 

Tolerance 

In the Federal Register of October 7, 

2009 (74 FR 51599) (FRL–8792–7), EPA 

issued a notice pursuant to section 

408(d)(3) of FFDCA, 21 U.S.C. 

346a(d)(3), announcing the filing of a 

pesticide petition (PP 8F7371) by BASF 

Corporation, 26 Davis Drive, P.O. Box 

13528, Research Triangle Park, NC 

27709. The petition requested that 40 

CFR 180.624 be amended by 

establishing tolerances for residues of 

the fungicide metrafenone, (3-bromo-6- 

methoxy-2-methylphenyl)(2,3,4- 

trimethoxy-6-methylphenyl) 

methanone, in or on table and wine 

grapes at 4.5 parts per million (ppm), 

juice grapes at 0.45 ppm, and raisin 

grapes at 17 ppm. That notice 


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