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Community Development Financial Institutions Fund

Program Summary by Budget Activity

Dollars in Thousands

FY 2014 FY 2015 FY 2016 FY 2015 to FY 2016

Budget Activity Enacted Enacted Request $ Change % Change

Community Development Financial Institutions Program 146,364 152,400 157,593 5,193 3.41%

Bank Enterprise Award Program 18,000 18,000 0 (18,000) -100.00%

Native American CDFI Assistance Program 15,000 15,000 16,000 1,000 6.67%

Administration 24,636 23,100 24,930 1,830 7.92%

Healthy Food Financing Initiative 22,000 22,000 35,000 13,000 59.09%

Subtotal, Community Development Financial Institutions 

Fund $226,000 $230,500 $233,523 $3,023 1.31%

Offsetting Collection - Reimbursables 206 0 0 0 0.00%

User Fees 0 249 986 737 295.98%

Recovery from Prior Years 4,200 5,200 5200 0 0.00%

Unobligated Balances from Prior Year 24,817 10,856 5,500 (5,356) -49.34%

Total Program Operating Level $255,223 $246,805 $245,209 ($1,596) -0.65%

Direct FTE 76 79 87 8 10.13%

Total FTE 76 79 87 8 10.13%

Summary

The FY 2016 Budget requests an appropriation 

of $233,523,000 for the Community 

Development Financial Institutions Fund 

(CDFI Fund) to support its mission of 

promoting economic opportunity and 

community development.

The CDFI Fund expands the availability of 

credit, investment capital, and financial 

services in distressed urban and rural 

communities and for underserved populations. 

The CDFI Fund carries out the Community 

Development Banking and Financial 

Institutions Act of 1994, as well as certain 

programmatic provisions of the Community 

Renewal Tax Relief Act of 2000, the Housing 

and Economic Recovery Act of 2008, and the 

Small Business Jobs Act of 2010. 

The CDFI Fund supports the creation and 

expansion of diverse Community 

Development Financial Institutions (CDFIs), 

which provide loans, investments, business 

counseling, basic banking services, and 

financial literacy training to underserved 

communities. Working primarily through 

CDFIs, the CDFI Fund facilitates business 

development, commercial real estate, housing 

development and home ownership. The CDFI 

Fund’s activities leverage billions of private 

sector investment dollars from banks, 

foundations, and other funding sources on a 

cumulative basis.

The FY 2016 Budget proposes funding for the 

CDFI Program and Native American CDFI 

Assistance (NACA) Program, as well as the 

Healthy Food Financing Initiative (HFFI). In 

addition to funding the administration of these 

programs, the CDFI Fund request also 

includes funding to administer the New 

Markets Tax Credit (NMTC) Program, the 

CDFI Bond Guarantee Program, and the 

Capital Magnet Fund (CMF). The CDFI Bond 

Guarantee Program supports CDFI long-term 

lending in underserved areas by providing a 

source of long-term capital. 
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CDFI FY 2016 Budget Highlights

Dollars in Thousands

Community Development Financial 

Institutions Fund FTE Amount

FY 2015 Enacted 79 $230,500 

Changes to Base:

Maintaining Current Levels (MCLs): - $437 

Pay-Raise - $100 

Pay Annualization - $26 

FERS Contribution Increase - $38 

Non-Pay - $273 

Non-Recurring Costs: - ($523)

Reasearch and Evaluation - ($523)

Efficiency Savings: - ($84)

Travel Savings - ($84)

Subtotal FY 2016 Changes to Base - ($170)

Total FY 2016 Base 79 $230,330 

Program Changes:

Program Increases: - $21,193 

Community Development Financial 

Institutions Program - $5,193 

Native American CDFI Assistance 

Program - $1,000 

Healthy Food Financing Initiative $13,000 

Administration - Capital Magnet 

Fund 8 $2,000 

Program Decreases: - ($18,000)

Bank Enterprise Award Program - ($18,000)

Total FY 2016 Request 87 $233,523 

FY 2016 Budget Adjustments

Maintaining Current Levels (MCLs) 

Pay-Raise +$100,000 / +0 FTE

Funds are requested for the proposed January 

2016 pay-raise.

Pay Annualization +$26,000 / +0 FTE

Funds are requested for annualization of 

January 2015 pay-raise.

FERS Contribution Increase +$38,000 / 

+0 FTE

Funds are requested for increases in agency

contributions to the Federal Employee

Retirement System based on updated actuarial 

estimates.

Non-Pay +$273,000 / +0 FTE

Funds are requested for inflation adjustments 

in non-labor costs such as travel, contracts, 

rent, supplies, and equipment.

Non-Recurring Cost

Administration – Research and Evaluation 

(Data Collection) -$523,000 / +0 FTE

The CDFI Fund will non-recur a portion of 

research and evaluation funding.

Efficiency Savings

Administration -$84,000 / +0 FTE

The CDFI Fund will reduce travel costs 

through the use of fewer travelers, video 

conference calling, and hosting of award 

announcements locally.

Program Increases

CDFI Program +$5,193,000 / +0 FTE

The CDFI Fund will increase the amount and 

number of financial assistance (FA) and 

technical assistance (TA) awards. An increase 

of $5.19 million to the CDFI Program will 

result in 5 to 6 additional FA awards, allowing 

an increase in the number of business and 

microenterprise loans, home improvement and 

purchase loans, residential real estate 

transactions, and other consumer loans and 

products offered by CDFI awardees.

Native American CDFI Assistance Program 

+$1,000,000 / +0 FTE

The CDFI Fund will increase the NACA 

Program by $1 million in order to increase 

participation by Native communities by 

improving technical assistance and capacity 

building for Native CDFIs.

Healthy Food Financing Initiative 

+$13,000,000 / +0 FTE

The CDFI Fund will increase the amount and 

number of FA awards for the Healthy Foods 

Financing Initiative. An increase of $13 

million will result in 6 to 7 more awards to 

expand the offering of affordable financing for 
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healthy food retail options in distressed 

communities.

Administration - Capital Magnet Fund

+$2,000,000 / +8 FTE

The CDFI Fund proposes to increase its

administrative budget by $2 million to 

administer the CMF. The CDFI Fund 

estimates this will support approximately $60 

million in award funding. Awards made 

through the CMF will be funded by annual 

transfers from Fannie Mae and Freddie Mac.

Program Decreases

Bank Enterprise Award Program

-$18,000,000 / +0 FTE

The President’s Budget proposes not to fund 

the BEA program in FY 2016. 

Explanation of Budget Activities

Community Development Financial 

Institutions Program ($157,593,000 from 

direct appropriations)

The CDFI Program uses federal resources to 

invest in and build the capacity of CDFIs to 

serve low-income and underserved individuals 

and communities lacking adequate access to 

affordable financial products and services. 

The CDFI Program provides monetary awards 

for financial assistance to further economic 

development (job creation, business financing, 

and commercial real estate development); 

affordable housing (housing development and 

homeownership); and community 

development financial services (provision of 

basic banking services to underserved 

communities and financial literacy training). 

The CDFI Program also provides technical 

assistance awards to help CDFIs build their 

capacity to serve their target markets through 

the acquisition of consulting services, 

technology purchases, and training.

New Markets Tax Credit Program ($0 from 

direct appropriations)

The NMTC Program attracts private sector 

capital into low-income communities. 

Community Development Entities (CDEs) 

apply to the CDFI Fund for allocations of tax 

credit authority in annual competitive rounds. 

Taxable investors receive NMTCs in exchange 

for making equity investments in these CDEs, 

which in turn invest equity or debt into 

qualified businesses. In addition to awarding 

tax credits, the CDFI Fund monitors CDE 

compliance through the terms of their 

allocation agreements. 

The FY 2016 President’s Budget proposes to 

permanently extend the NMTC, allowing up to 

$5 billion in qualifying investment in each 

year beginning in 2015. The proposal would 

also permit the NMTC to offset the Alternative 

Minimum Tax (AMT) liability.

Native American CDFI Assistance Program 

($16,000,000 from direct appropriations)

The Native Initiatives include two 

components: (i) the NACA Program through 

which financial assistance and technical

assistance awards are provided to build the 

capacity of new or existing Native CDFIs 

serving Native Communities; and (ii) 

complementary capacity-building initiatives 

that foster the development of Native CDFIs 

through training and technical assistance, 

strengthen their operational capacity, and 

guide them in the creation of important 

financial education and asset-building 

programs for their communities.

Healthy Food Financing Initiative 

($35,000,000 from direct appropriations)

Through the Administration’s Healthy Food 

Financing Initiative, the CDFI Fund will build 

on program achievements in FYs 2011 - 2015

by continuing to support and finance healthy 

food alternatives in low-income communities.

To date, all 12 of the first-round HFFI 
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awardees and 11 of the 12 second-round 

awardees have reported on three years of HFFI 

investments. In total, 99 loans/investments 

were made to 114 projects totaling 

$43,589,977 in HFFI eligible activities. A total 

of 64 retail outlets were funded resulting in 

899,021 square feet of new retail space 

developed for projects ranging from small 

green grocers to large supermarkets, all

serving low-income, low-access census tracts. 

Another 50 non-retail projects developed 

1,122,816 square feet of space for eligible 

healthy food activities such as farming and

development of distribution centers. 

Bond Guarantee Program ($0 from direct 

appropriations)

The Small Business Jobs Act of 2010 (Public 

Law 111-240) created the CDFI Bond 

Guarantee Program. Bonds issued under the 

program support CDFI lending activity in 

underserved communities by providing a 

source of long-term capital. Qualified Issuers 

(CDFIs or their designees) issue bonds that are 

guaranteed by the Secretary of the Treasury 

and use the bond proceeds to make loans to 

Eligible CDFIs for eligible community and 

economic development purposes. These 

purposes include community and economic 

development financing for affordable multifamily rental housing, small businesses, 

healthcare facilities, charter schools, and 

commercial real estate in low-income or 

underserved rural areas. For the FY 2013 

round of the program, the CDFI Fund received 

8 guarantee applications that represented $825 

million in bond guarantees. The Department of 

Treasury provided guarantees totaling $325 

million. In FY 2014, the CDFI Fund received 

three guarantee applications that represented a 

total of $415 million in guarantees and the 

Department of Treasury provided guarantees 

of $200 million.

Capital Magnet Fund ($0 from direct 

appropriations)

The Housing and Economic Recovery Act of 

2008 authorized CMF to be administered by 

the CDFI Fund. The purpose of CMF is to 

make awards to CDFIs and qualified nonprofit 

housing providers that would be leveraged to 

attract other financing sources for affordable 

housing. By statute, recipients must leverage

CMF dollars by a factor of at least 10:1]

Administration ($24,930,000 from direct 

appropriations)

Administration encompasses the CDFI Fund’s 

operational support and management activities 

for each of the monetary award, bond 

guarantee, and tax credit programs that it 

administers. This includes finalizing the terms 

of assistance agreements with awardees, 

making disbursements, and monitoring 

awardee compliance with the terms of their 

multi-year assistance and allocation 

agreements. In addition, resources will be 

utilized for a business application 

enhancement upgrade and external program 

research evaluations. Administration funds 

will also support the non-monetary award 

programs and activities (the NMTC Program, 

CDFI and CDE certification, and 

recertification) and the administration of the 

CDFI Bond Guarantee Program and the 

Capital Magnet Fund.

Legislative Proposals

Treasury requests extension of the CDFI

Bond Guarantee Program through FY 2017 

and proposes reforms to the program to 

increase participation and ensure credit-worthy 

CDFIs have access to this important source of 

capital, while continuing to maintain strong 

protections against credit risk. Treasury 

proposes the following legislative changes to 

the CDFI Bond Guarantee Program: (i) to 

extend the program through FY 2017; (ii) to 

reduce the minimum bond issue size from 

$100 million to $25 million; (iii) to permit the 
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Secretary to adjust the risk-share pool payment 

requirement, based on the borrower’s credit 

quality, from zero to four percent; (iv) to 

collect a mandatory one percent fee from all 

borrowers; and (v) to revise the relending 

account language to correct a technical 

drafting error.

CDFI Performance by Budget Activity

Budget Activity Performance Measure FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Target Target

Community Development 

Financial Institutions Program

CDFI - Percent of Loans & 

Investments Originated in 

Distressed communities and to 

underserved populations by 

amount of loans (Annual) %

84.9% 77.1% 70.8% 60.0% 60.0%

Administration ALL - Award Cycle Time 

(months)

6.5 6.8 7.1 7.0 7.0

Administration ALL – Affordable Housing (units) 27,433 26,391 32,621 36,000 29,000

New Markets Tax Credit 

Program

Community Development 

Entities' Annual Qualified Equity 

Investments In Low-Income 

Communities ($ billions)

$4.7 $5.5 $4.0 $3.5 $3.5

Key: DISC - Discontinued and B – Baseline

Description of Performance

In the FY 2014 funding round of the CDFI 

Program, the CDFI Fund received applications 

from 411 organizations, requesting over $500 

million in financial and technical assistance 

awards and for the Healthy Food Financing 

Initiative (HFFI). The CDFI Fund awarded 

more than $195 million in grants to 197 

CDFIs, including $22.4 million for HFFI. 

This activity shows the continued strong 

growth in demand for CDFI Fund Programs.

As detailed in the CDFI Fund Performance by 

Budget Activity Table, in FY 2014, CDFI 

Program awardees reported that over 70 

percent of loans were originated in distressed 

communities and to underserved populations. 

By regulation, CDFIs must originate 60 

percent or more of their loans and investments 

in eligible distressed census tracts or to 

underserved populations. The threshold is set 

at 60 percent in recognition that CDFIs need to 

balance safety and soundness by maintaining a 

diversified portfolio. Loans in highly 

distressed areas tend to be higher risk as well 

as inefficient to originate and manage. The 

trend for FY 2012-2014 indicates that CDFI 

awardees have been successful in meeting 

their mission of serving distressed 

communities and underserved populations 

while maintaining sound investment portfolio 

performance. The three year trend line shows a 

drop from 85 percent to 71 percent, however 

from year to year it is typical for this number 

to fluctuate. The 10 year average from FY 

2003-2012 was 74%, which is comparable to 

the three year average of 77% for FY 2012-

2014.

In FY 2014, the CDFI Fund completed its 

application-award cycle for all program 

awards in 7.1 months. The application-award 

target was missed slightly because of a change 

in congressionally mandated matching funds 

requirements. In the FY 2014 appropriation 

Congress required supplemental notification of 

applicants and additional reviews of the 

applicant’s matching documentation. The 

target remains 7 months for FYs 2015 and 

2016.
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In FY 2014, the CDFI Fund reported 

supporting the creation or preservation of

32,621 units of affordable housing for its Allaffordable housing measure. This includes 

housing outcomes from the CDFI, NMTC and 

CMF programs. The target was exceeded due 

to higher than projected results achieved by 

CMF awardees. The targets for FY 2015 and 

2016 do not factor in results from future 

rounds of funding for CMF. The outcomes of 

the FY 2016 CMF awards will not be reported 

until FY 2017.

In FY 2014, NMTC allocatees reported 

making annual qualified investments of nearly 

$4 billion in low-income communities, falling 

below the stretch target of $5 billion. The goal 

was established based on expectations about 

investments made from available tax authority 

balances. The FY 2015 and FY 2016 targets 

were decreased to $3.5 billion to reflect the 

actual annual tax credit authority enacted by 

Congress in recent years.