Community Development Financial Institutions Fund

Program Summary by Budget Activity

Dollars in Thousands

 FY 2015 FY 2016 FY 2017 FY 2016 to FY 2017

Budget Activity Enacted Enacted Request $ Change % Change

Community Development Financial Institutions Program $152,400 $153,423 $153,423 $0 0.00%

Bank Enterprise Award Program $18,000 $19,000 $19,000 $0 0.00%

Native American CDFI Assistance Program $15,000 $15,500 $15,500 $0 0.00%

Administration $23,100 $23,600 $26,000 $2,400 10.17%

Healthy Food Financing Initiative $22,000 $22,000 $22,000 $0 0.00%

Small Dollar Loan Program $0 $0 $10,000 $10,000 N/A

Subtotal, Community Development Financial 

Institutions Fund $230,500 $233,523 $245,923 $12,400 5.31%

User Fees $1,040 $1,059 $1,269 $210 19.83%

Recovery from Prior Years $3,924 $5,200 $5,200 $0 0.00%

Unobligated Balances from Prior Years $10,856 $5,500 $5,500 $0 0.00%

Total Program Operating Level $246,320 $245,282 $257,892 $12,610 1.79%

Direct FTE 79 79 87 8 10.13%

Reimbursable FTE 0 0 0 0 N/A

Total FTE 79 79 87 8 10.13%

Summary

The FY 2017 Budget requests an appropriation 

of $245,923,000 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 (HERA), 

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 2017 Budget proposes funding for the 

CDFI Program and Native American CDFI 

Assistance (NACA) Program, the Bank 

Enterprise Award Program, the Small Dollar 

Loan Program, and the Healthy Food 

Financing Initiative (HFFI). The CDFI Fund’s

request also includes funding for the 

administration, operational support, and 

management associated with these programs 

and the New Markets Tax Credit (NMTC) 
Program, the CDFI Bond Guarantee Program, 

and the Capital Magnet Fund (CMF).

CDFI FY 2017 Budget Highlights

Dollars in Thousands

Community Development Financial 

Institutions Fund

 

FTE Amount

FY 2016 Enacted 79 $233,523

Changes to Base:

Maintaining Current Levels (MCLs): - $412

Pay-Raise - $100

Pay Annualization - $33

Non-Pay - $279

Non-Recurring Costs: - ($337)

Research and Evaluation (Data 

Collection) - ($337)

Subtotal Changes to Base - $75

Total FY 2017 Base 79 $233,598

Program Changes:

Program Increases: - $12,325

Administration 8 $2,325

Small Dollar Loan Program - $10,000

Total FY 2017 Request 87 $245,923

FY 2017 Budget Adjustments

Maintaining Current Levels (MCLs) 

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

Funds are requested for the proposed January 

2017 pay-raise.

Pay Annualization +$33,000 / +0 FTE

Funds are requested for annualization of 

January 2016 pay-raise.

Non-Pay +$279,000 / +0 FTE

Funds are requested for inflation adjustments 

in non-labor costs such as travel, contracts, 

rent, supplies, and equipment.

Non-Recurring Costs

Administration – Research and Evaluation 

(Data Collection) -$337,000 / +0 FTE

The CDFI Fund will non-recur a portion of 

research and evaluation funding. This 

reduction will not impact on-going research 

and evaluation.

Program Increases

Administration +$2,325,000 / +8 FTE

This increase will allow the CDFI Fund to 

allocate an estimated $74 million in awards 

under the CMF in FY 2017 and to develop the 

Community Development Impact Measuring 

Estimator (CDIME) modeling tool. Awards 

made through the CMF program will be 

funded by annual transfers from Fannie Mae 

and Freddie Mac pursuant to HERA.

Small Dollar Loan Program +$10,000,000 / 

+0 FTE

The CDFI Fund requests $10 million for the

Small Dollar Loan Program to provide CDFIs 

with Financial Assistance grants to establish 

loan loss reserve funds and Technical 

Assistance grants for capacity building. These 

awards will encourage CDFIs to address the 

issue of predatory lending in their 

communities and provide an alternative to 

payday lenders.

Explanation of Budget Activities

Community Development Financial 

Institutions Program ($153,423,000 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 

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.

Additionally, CDFI Program provides 

capacity-building initiatives that foster the
development of CDFIs through training and 

technical assistance.

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 credit allocation authority, the CDFI Fund 

monitors CDE compliance through the terms 

of their allocation agreements. 

On December 18, 2015, Congress extended the 

authorization of the NMTC Program for $3.5 

billion per year in qualifying investments, and 

permitted the NMTC to offset the Alternative 

Minimum Tax (AMT) liability.

Bank Enterprise Award Program 

($19,000,000 from direct appropriations)

Through the BEA Program, the CDFI Fund 

encourages insured depository institutions to 

increase investments and services in distressed 

communities and to provide financial 

assistance to CDFIs. Organizations that 

receive BEA Program awards are required to 

reinvest those funds back into distressed 

communities.

Native American CDFI Assistance Program 

($15,500,000 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 

($22,000,000 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.

CDFI 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. 

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 ($26,000,000 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 CMF.

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 

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 2013 FY 2014 FY 2015 FY 2016 FY2017

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) %

77.1% 70.8% 80.1% 60.0% 60.0%

Administration ALL - Award Cycle Time 

(months) 6.8 7.1 8.3 7.0 7.0

Administration ALL – Affordable Housing 

(units) 26,391 32,621 27,004 29,000 29,000

New Markets Tax Credit 

Program

Community Development 

Entities' Annual Qualified Equity 

Investments In Low-Income 

Communities ($ billions)

$5.5 $4.0 $3.0 $3.5 $3.5

New Markets Tax Credit 

Program

NMTC-Percentage of Loans and 

Investments that went into 

Severely Distressed 

Communities (percentage)

78.50% 73.80% 75.20% 72.00% 72.00%

Key: DISC – Discontinued

Description of Performance

In the FY 2015 funding round of the CDFI 

Program, the CDFI Fund received applications 

from 356 organizations, requesting over $435

million in financial and technical assistance 

awards. In addition, 33 qualified organizations 

applied for the Healthy Food Financing 

Initiative (HFFI) requesting $101 million. In 

September 2015, the CDFI Fund awarded 

more than $160 million in grants to 152
CDFIs. Additionally 11 organizations were 

awarded $22 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 2015, CDFI 

Program awardees reported that over 80 

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 less efficient to originate and manage. The 

trend for FY 2012-2015 indicates that CDFI 

awardees have been successful in meeting

their mission of serving distressed 

communities and underserved populations 

while maintaining sound investment portfolio 

performance.

In FY 2015, 21 prior HFFI awardees reported 

206 HFFI investments totaling $88.3 million. 

There were 119 retail investments totaling 

over $69 million that developed 1,564,732 

square feet of new retail space for projects 

ranging from small green grocers to large 

supermarkets which served low-income, lowaccess census tracts. In addition, there were 87 

non-retail investments totaling over $19 

million in projects involving production and 

distribution, which developed 1,718,088 

square feet of space for eligible healthy food 

activities.

In FY 2015, the application-award timeframe

was missed by more than one month because 

of a change in matching funds requirements 

under the December 2014 appropriation 

language which required supplemental 

notification to applicants and additional 

reviews of the applicant’s matching funds 

documentation. The seven-month target has 

been retained for both FY 2016 and 2017 

because the CDFI Fund has revised its internal 

policies and procedures to improve the cycle 

times for the application review and matching 

funds procedures. In addition, once the CDFI 

Fund’s new Awards Management Information 

System (AMIS) is fully deployed, the 

application cycle time should further benefit 

from the automation of application intake and 

review.

The All-Affordable Housing measure captures 

the number of affordable housing units 

developed or produced as a result of CDFI 

Fund awards, as reported by CDFI, NMTC 

and CMF program awardees. The actual 

results of 27,000 affordable housing units for 

FY 2015 fell short of the ambitious target of 

36,000 units. The target was missed due to 

changes in housing investments across 

programs. There were declines in housing 

lending by CDFI awardees largely due to a 

decline in the number of awardees focusing on 

housing (3,000 fewer units than the prior 

year), a slight decline in NMTC housing 

investments (540 fewer than the prior year) 

and a deferral of the completion of 1,300 CMF

funded housing units to 2016. A provisional 

target is retained for 2016 which does not 

factor in results from future rounds of funding 

for CMF. Please note that for CMF awards 

made in FY 2016, the outcomes will not be 

reported until FY 2018.

The 2014 NMTC investment authority was 

allocated in FY 2015 due to delayed passage 

of the authorizing legislation. In the 2014 

round, the NMTC Program awarded $3.5 

billion in NMTC investment authority to 76 

CDEs, out of a pool of applicants requesting 

$19.9 billion.

The FY 2015 target for Qualified Low-Income 

Community Investments (QLICIs) was set at 

$5 billion to reflect the actual annual tax credit 
authority requested. The FY 2015 target was 

not met because the prior year’s tax credit 

authority had been limited to $3.5 billion. The 

2011-2013 trends reflect the effect of higher 

tax credit authority at $5 billion and the 

subsequent decrease in 2014 for QLICIs 

reflects the lower levels of tax credit authority. 

A complementary measure of program 

performance is investments in severely 

distressed communities because it measures 

impact. In FY 2015 the investments in 

severely distressed communities exceeded the 

target. This performance indicates that NMTC 

investors continue to meet their commitments 

in severely distressed communities.