Community Development Financial Institutions Fund 

Program Summary by Budget Activity 

(Dollars in thousands) 

FY 2008 FY 2009 FY 2010 Appropriation Enacted ARRA Enacted Request $ Change % Change

Program Account $94,000 $100,000 $107,000 $243,600 $136,600 127.7%

 Community Development Financial Institutions 

Program $52,250 $90,000 $59,750 $113,600 $53,850 90.1%

 New Markets Tax Credit Program $4,120 $67 $4,200 $4,203 $3 0.1%

 Bank Enterprise Award Program $20,000 $0 $22,000 $22,000 $0 -

 Native Initiatives $8,000 $8,000 $8,500 $10,000 $1,500 17.6%

 Capital Magnet Fund $0 $0 $0 $80,000 $80,000 100.0%

 Administration $9,630 $1,933 $10,550 $13,797 $3,247 30.8%

 Financial Education and Counseling $0 $0 $2,000 $0 ($2,000) (100.0%)

Total Appropriated Resources $94,000 $100,000 $107,000 $243,600 $136,600 127.7%

/1The CDFI Fund will seek to implement additional reforms to the BEA program to enhance the capacity of CDFI banks, and to 

strengthen partnerships between small community banks and CDFIs. 

/2 The Administration budget activity excludes resources to administer the New Markets Tax Credit program. 

Explanation of Request 

 

The FY 2010 request for the Community 

Development Financial Institutions (CDFI) 

Fund will ensure the Fund meets its mission of 

promoting access to capital and local 

economic growth in urban and rural lowincome communities across the nation. 

Through its various programs, the CDFI Fund 

enables locally based organizations to further 

goals such as economic development; 

affordable housing; and community 

development financial services. 

Total resources required to support CDFI Fund 

activities for FY 2010 are $243,600,000 from 

direct appropriations. 

Purpose of Program 

 

The Community Development Financial 

Institutions (CDFI) Fund expands the 

availability of credit, investment capital, and 

financial services in distressed urban and rural 

communities, and carries out the Community 

Development Banking and Financial 

Institutions Act of 1994. The CDFI Fund’s 

investments work toward building private 

markets, creating healthy local tax revenues 

(through job creation, business development, 

commercial real estate and housing 

development and homeownership), and 

empowering residents by stimulating the 

creation and expansion of diverse community 

development financial institutions (CDFIs, 

which provide basic banking services to 

underserved communities and financial 

literacy training). The CDFI Fund provides 

infusions of capital to institutions that serve 

economically distressed communities and lowincome individuals. The CDFI Fund’s 

activities leverage millions of private sector 

investment dollars from banks, foundations, 

and other funding sources. 

The Capital Magnet Fund (CMF) will be a 

newly authorized program that will be 

administered by the CDFI Fund beginning in 

FY 2010. The purpose of the CMF is to 

increase capital investment for the 

development, preservation, rehabilitation, or 

the purchase of affordable housing for low-, 

very low-, and extremely low-income families, 

and related economic development activities. 

Department of the Treasury - Budget in Brief FY 2010 Page 31
CDFI FY 2010 Budget Highlights

(Dollars in thousands) 

Appropriation Amount

FY 2009 Enacted 107,000

Changes to Base: 

Maintaining Current Levels (MCLs): $250

Across the Board Program Reduction (69)

Non-Pay Inflation Adjustment 107

Pay Annualization 76

Pay Inflation Adjustment 136

Subtotal FY 2010 Changes to Base $250

Total FY 2010 Base 107,250

Program Changes: 

Program Decreases: ($2,000)

Financial Counseling Grants program (2,000)

Program Increases: $138,350

CDFI program 53,850

Native Initiatives 1,500

Capital Magnet Fund 80,000

Capital Magnet Fund Implementation 1,300

Research, Evaluation & Performance 850

Transition to Departmental Offices' IT LAN 850

Subtotal FY 2010 Program Changes $136,350

Total FY 2010 President's Budget Request 243,600

FY 2010 Budget Adjustments 

 

FY 2009 Enacted 

The FY 2009 enacted direct appropriation for 

CDFI is $107,000,000. 

Maintaining Current Levels (MCLs) 

Adjustments Necessary to Maintain 

Current Levels +$250,000 / +0 FTE Funds 

are requested for: Across the Board Program 

Reduction of $69,000; FY 2010 cost of the 

January 2009 pay increase of $76,000; 

proposed January 2010 pay raise of $136,000; 

and non-labor related items such as contracts, 

travel, supplies, equipment and GSA rent 

adjustments of $107,000. 

Program Decreases 

Financial Counseling Grants program -

$2,000,000 / +0 FTE The CDFI Fund will 

discontinue the financial counseling grants 

pilot program, begun in FY 2009, and reinvest 

these resources in its existing financial 

assistance and technical assistance grants 

programs. 

Program Increases 

CDFI program +$53,850,000 / +0 FTE The 

FY 2010 budget request seeks to increase 

funding to support the increased demand for 

CDFI Program grants. CDFIs use these grants 

to increase their overall capacity, and their 

ability to offer loans, investments and other 

financial services in underserved communities. 

Awards are used by CDFIs to, among other 

things, increase their net assets, create loan 

loss reserves, and offer subordinated debt 

products. As a result, CDFIs are able to 

leverage CDFI Program awards by 

approximately 15:1. 

Native Initiatives +$1,500,000 / +0 FTE

Through the Native Initiatives, the CDFI Fund 

assists Native Communities (Native American, 

Alaskan Native and Native Hawaiian 

communities) to overcome certain barriers to 

financial services. The budget requests an 

additional $1.5 million, bringing the total 

program funding to $10 million. 

Capital Magnet Fund +$80,000,000 / +0 FTE

The Capital Magnet Fund seeks to increase 

capital investment for the development, 

preservation, rehabilitation, or purchase of 

affordable housing, and related economic 

development activities. The budget requests 

$80 million in funding to begin this important 

program, which will stimulate the economy in 

the nation's most distressed neighborhoods. 

Capital Magnet Fund Implementation 

+$1,300,000 / +6 FTE These resources will 

enable the CDFI Fund to hire additional grants 

and program compliance staff with expertise in 

programs designed to facilitate affordable 

housing and related investments. 

Research, Evaluation & Performance 

+$850,000 / +2 FTE To conduct strategic 

research to analyze the impact and outcomes 

of the CDFI Fund's programs, including the 

effect of changing economic conditions. 

Transition to Departmental Offices' IT LAN 

+$850,000 / +2 FTE In FY 2010, the CDFI 

Fund will transition from its separate 

Department of the Treasury - Budget in Brief FY 2010 Page 32
information technology LAN to a shared 

service provided model, leveraging the 

Department of Treasury Departmental Offices 

LAN capabilities. This transition will result in 

a one time cost estimated at $1.5 million. 

Explanation of Budget Activities 

 

Salaries and Expenses 

 

Community Development Financial 

Institutions Program ($113,600,000 from 

direct appropriations) The Community 

Development Financial Institutions (CDFI) 

Program uses federal resources to invest in and 

build the capacity of CDFIs to serve lowincome people 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 development, and 

commercial real estate development); 

affordable housing (housing development and 

homeownership); and community 

development financial services (provision of 

basic baking services to underserved 

communities and financial literacy training). 

The CDFI Program also provides technical 

assistance awards to help start-up and existing 

CDFIs build their capacity to serve their target 

markets through the acquisition of consulting 

services, technology purchases, and staff or 

board training. 

New Markets Tax Credit Program 

($4,203,000 from direct appropriations) The 

NMTC Program attracts private sector capital 

into low-income communities. Community 

Development Entities (CDEs) apply to the 

Fund for allocations of tax credits in annual 

competitive rounds. The CDEs, in turn, 

provide tax credits to private investors in lowincome communities. In addition to awarding 

tax credits, the Fund monitors CDE 

compliance with the terms of their allocation 

agreements. The amount requested in this 

account funds the administrative expenses of 

the NMTC. 

Bank Enterprise Award Program 

($22,000,000 from direct appropriations)

The CDFI Fund instituted program changes in 

2009 requiring most awardees to reinvest their 

award dollars in support of CDFIs or in 

additional qualifying low-income community 

activities. In FY 2010, the CDFI Fund will 

seek to make additional reforms to the BEA 

Program to enhance the capacity of CDFI 

banks, and to strengthen partnerships between 

community banks and CDFIs. The CDFI Fund 

will work with Congress, the Office of 

Management and Budget and other 

stakeholders in the development of proposed 

reforms, and seek Congressional approval as 

appropriate. 

Native Initiatives ($10,000,000 from direct 

appropriations) The Native Initiatives 

comprises two components: (i) the Native 

American CDFI Assistance (NACA) Program 

through which FA and TA awards are 

provided to build the capacity of new or 

existing CDFIs serving Native American 

Communities (Native American CDFIs), and 

(ii) complementary capacity-building 

initiatives that seek to foster the development 

of Native American CDFIs through training 

and technical assistance. The CDFI Fund 

achieves these objectives through two 

principal strategies: (i) the Native American 

CDFI Assistance (NACA) Program, which 

provides financial assistance and technical 

assistance awards to new or existing Native 

CDFIs, and (ii) a complementary series of 

training programs, called Expanding Native 

Opportunities, that foster the development of 

new Native CDFIs, strengthen the operational 

capacity of existing Native CDFIs, and guide 

Department of the Treasury - Budget in Brief FY 2010 Page 33
Native CDFIs in the creation of important 

financial education and asset building 

programs for their communities. 

Capital Magnet Fund ($80,000,000 from 

direct appropriations) The Capital Magnet 

Fund was enacted through the Housing and 

Economic Recovery Act of 2008. Through the 

Capital Magnet Fund, the CDFI Fund will 

carry out a competitive grant program for 

CDFIs and nonprofit organizations (if their 

principal purposes is the development or 

management of affordable housing) to attract 

private capital for increase investment in (i) 

develop, preserve, rehabilitate, and purchase 

affordable housing for primarily extremely 

low-, very low-, and low-income families; and 

(ii) undertake economic development activities 

or community services 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 low-income area or underserved 

rural area. The Act established the Capital 

Magnet Fund as a program that will be 

administered by the CDFI Fund. 

Administration ($13,797,000 from direct 

appropriations) Administration encompasses 

the CDFI Fund’s operational support and 

management activities for each of the grant 

and tax credit programs it administers. This 

includes finalizing the terms of assistance 

agreements with awardees, making 

disbursements, and monitoring awardee 

compliance with the terms of their three-year 

award assistance and seven-year allocation 

agreements. 

Legislative Proposals 

 

For purposes of the CDFI Fund’s FY 2010 

appropriations, the CDFI Fund is requesting a 

waiver of the statutory cap on award amounts 

(12 U.S.C. 4707 (d)) and a waiver of the 

matching funds requirements (12 U.S.C. 4707 

(e)) for the FY 2010 funding rounds, given the 

current need to stabilize the economy. 

Award Cap Waiver 

The CDFI Fund proposes waiving the 3-year, 

$5 million cap (12 U.S.C. 4707(d)(1)-(2)) for 

FY 2010. The FY 2010 Budget includes a 

significant increase in CDFI Program 

resources, and the CDFI Fund requires the 

option to use some of the additional resources 

to fully fund high quality applicants that 

received awards in previous resources. Due to 

additional resources made available through 

the Recovery Act, and the increase of the FY 

2010 budget request, the Administration 

supports waiving the award cap. 

Matching Fund Waiver 

The second proposal waives the CDFI 

Programs matching funds provision in 2010, 

which requires applicants to match awards on 

a 1:1 basis with private funding. Given 

current credit market conditions, CDFIs may 

find it difficult to obtain affordable private 

credit. Under this proposal, highly qualified 

CDFIs will be able to apply even if they are 

struggling to find a private match. Given the 

market challenges in the credit and equities 

markets, many CDFIs are encountering a 

significant contraction of capital support to 

obtain matching funds. 

This contraction in capital support is coming at 

a time when many CDFIs are seeing an 

increased demand for their products, as many 

of the traditional mainstream lenders are 

reducing their lending activities. The 

Administration supports waiving the matching 

funds requirement to enable all CDFIs that are 

able to serving distressed communities to be 

eligible to apply regardless of the market 

conditions that have impacted the ability to 

obtain matching funds. 

Department of the Treasury - Budget in Brief FY 2010 Page 34
CDFI Performance by Budget Activity 

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Budget Activity Performance Measure Actual Actual Actual Target 

Met? ARRA Target Target

Bank Enterprise Increase in community 

Award development activities over prior 

year for all BEA program applicants 

($ millions) (Oe) 

318 227 232 Yes NA 202 210 

Community Dollars of private and non-CDFI 

Development Fund investments that CDFIs are 

Financial able to leverage because of their 

Institutions CDFI Fund Financial Assistance ($ 

Program millions) (Oe) 

1,400 778 621 No NA 635 725 

Community Number of full-time equivalent jobs 

Development created or maintained in 

Financial underserved communities by 

Institutions businesses financed by CDFI 

Program program awardees (Oe) 

22,329 35,022 29,539 Yes 76,000 44,000 85,000 

New Markets Tax Community Development Entities' 

Credit Program annual investments in low-income 

communities ($ billions) (Oe) 

2 2.5 3.3 Yes NA 2.5 2.5 

Native Initiatives Annual percentage increase in the 

total assets of Native CDFIs (%) 

(Oe) 

182 19 19 Yes NA 15 15 

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. Satisfaction 

Description of Performance 

 

Description of Performance: In In FY 2008, 

the CDFI Fund leveraged $621 million in 

private and non-CDFI Program dollars, 

which was less than the target of $750 

million. The shortfall was due to two 

reasons: (i) in FY 2008 there was a decrease 

in the amount of FA disbursements 

compared to that which was projected; and 

(ii) the calculated leverage ratio actually 

increased from $19:1, to $21:1. The 

leverage ratio will change over time simply 

because the size and composition of the 

group of CDFIs that provides leverage 

information changes every year. Different 

CDFIs have varying ability to raise equity 

and borrow against that equity, and will 

invest in widely different projects. 

In FY 2008, the CDFI Fund created or 

maintained 29,539 full-time equivalent jobs 

in underserved communities, a slight 

improvement over its goal of 28,676 jobs. 

Department of the Treasury - Budget in Brief FY 2010 Page 35