Community Development Financial Institutions Fund

Program Summary by Budget Activity

(Dollars in thousands)

Appropriation FY 2010 FY 2011 FY 2012 Change FY2010 to FY2012

Enacted Annualized

CR Level

Request $ Change % Change

Community Development Financial Institutions Program $107,600 $107,600 $125,869 $18,269 16.98%

Bank Enterprise Award Program $25,000 $25,000 $0 ($25,000) (100.0%)

Native Initiatives $12,000 $12,000 $12,000 $0 -

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

Administration1, 2 $18,000 $18,000 $22,965 $4,965 27.58%

Financial Education and Counseling $1,000 $1,000 $0 ($1,000) (100.0%)

Hawaii Financial Ed and Counseling $3,150 $3,150 $0 ($3,150) (100.0%)

Bank on USA Initiative $0 $0 $41,425 $41,425 100.0%

Healthy Food Financing Initiative $0 $0 $25,000 $25,000 100.0%

Total Appropriated Resources $246,750 $246,750 $227,259 ($19,491) (7.90%)

Direct FTE 84 84 90 6 7.14%

1/ NMTC Program Administration is included in the Administration budget activity for the FY 2012 Budget request.

2/ In addition, $13.5 million is available for the administration of the Bond Guarantee Program provided in PL 111-240.

Summary

The FY 2012 request for the Community 

Development Financial Institutions Fund 

(CDFI Fund) will ensure that the CDFI Fund 

meets its mission of increasing economic 

opportunity and promoting community 

development investments for underserved 

populations and in distressed communities in 

the United States.

Through its various programs and initiatives, 

the CDFI Fund enables locally based 

organizations to further goals such as 

economic development that support the 

expansion of affordable housing, small 

businesses, community facilities, and 

community development financial services. 

Total resources required to support CDFI Fund 

activities for FY 2012 are $227,259,000 from 

direct appropriations.

The 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 

provides infusions of capital to institutions that 

serve economically distressed communities 

and low-income individuals. The CDFI 

Fund’s investments work toward building 

private markets, improving local tax revenues 

(through job creation, business development, 

commercial real estate, 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 and 

financial literacy training to underserved 

communities. The CDFI Fund’s activities 

leverage millions of private sector investment 

dollars from banks, foundations, and other 

funding sources.

The FY 2012 budget proposes funding for the 

CDFI Fund's core CDFI and Native programs, 

as well as the Healthy Food Financing 

Initiative (HFFI) and the Bank on USA 

initiative. The Bank on USA initiative 

promotes access to affordable and appropriate 
financial services and basic consumer credit 

products for the underbanked. These 

individuals face a number of problems, 

including high fees for alternative financial 

services such as check-cashing; barriers to 

saving and building credit; and increased 

exposure to risks such as fraud and theft. The 

Healthy Food Financing Initiative supports

CDFIs for the purpose of increasing the 

availability of affordable, healthy foods in 

underserved urban and rural communities, 

particularly through the development or 

equipping of grocery stores and other healthy 

food retailers.

CDFI FY 2012 Budget Highlights

(Dollars in thousands)

Appropriation Amount

FY 2010 Enacted $246,750

FY 2011 Annualized CR Level $246,750

Changes to Base:

Adjustment to Reach Policy Level: $3,144

Adjustment to Reach FY 2011 President's 

Policy

$3,144

Maintaining Current Levels (MCLs): $201

Maintaining Current Levels $201

Efficiencies, Savings & Base Reductions: ($1,830)

Office Relocation ($1,700)

Procurement Savings ($130)

Subtotal FY 2012 Changes to Base $1,515

Total FY 2012 Base $248,265

Program Changes:

Program Decreases: ($22,706)

Community Development Financial 

Institutions Program

($14,131)

Bank on USA Initiative ($8,575)

Program Reinvestment: $1,700

Adjustment to Support New Programs $1,700

Subtotal FY 2012 Program Changes ($21,006)

Total FY 2012 Request $227,259

FY 2012 Budget Adjustments

FY 2011 Annualized CR Level

The FY 2011 Annualized CR Level for CDFI 

is $246,750,000.

Adjustment to Reach Policy Level 

Adjustment to Reach FY 2011 President's 

Policy +$3,144,000 / +6 FTE

Adjustment to Reach FY 2011 President's

Policy

Maintaining Current Levels (MCLs) 

Maintaining Current Levels +$201,000 / +0 

FTE 

Funds are requested for inflation adjustments 

in non-labor expenses such as GSA rent 

adjustments, postage, supplies and equipment 

and health benefits and the increase in Federal 

Employee Retirement System participation. 

No inflation adjustment is requested for pay in 

FY 2012.

Efficiencies, Savings & Base Reductions 

Office Relocation -$1,700,000 / +0 FTE 

This is a one-time cost in the administrative 

account which is associated with the CDFI 

Fund's FY 2011 office relocation.

Procurement Savings -$130,000 / +0 FTE 

Reducing non-competitive and high risk 

contract actions and implementing the use of 

socio-economic programs such as 8(a) and 

small business set-asides can achieve 

procurement savings. Other methods to 

achieve savings include strategic sourcing, 

advanced acquisition planning, and GSA 

discount savings.

Program Decreases 

Community Development Financial 

Institutions Program -$14,131,000 / +0 FTE 

The CDFI Fund will reduce the amount and 

number of Financial Assistance and Technical 

Assistance awards and the funding level for 

the capacity building initiative, which 

complements existing funding for technical 

assistance and capacity building services to 

CDFIs. 

However, the impact of the reduction in 

funding is mitigated by additional financial 

support to CDFIs from other Treasury 

programs, including the more than $500 

million that has been made available to CDFIs 

under the Community Development Capital 

Initiative (CDCI) in FY 2010, and the up to 
$300 million that is authorized under Small 

Business Lending Fund (SBLF) in FY 2011.

Bank on USA Initiative -$8,575,000 / +0 FTE

The FY 2012 request is reduced because 

certain one-time fixed costs incurred in FY 

2011 will not be incurred in FY 2012 

(technical assistance to local Bank on USA 

programs, research contracts, and start-up and 

related administrative costs).

Program Reinvestment 

Adjustment to Support New Programs 

+$1,700,000 / +0 FTE

The CDFI funds will redirect reinvestment of 

non-recurring cost from the office relocation to 

cover the additional administrative support 

costs resulting from the implementation of two 

high-priority initiatives; the Bank on USA 

Initiative and the Healthy Food Financing 

Initiative.

Explanation of Budget Activities

Salaries and Expenses

Community Development Financial 

Institutions Program ($125,869,000 from 

direct appropriations)

The CDFI Program uses federal resources to 

invest in and build the capacity of CDFIs to 

serve low-income 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 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 start-up and existing 

CDFIs build their capacity to serve their target 

markets through the acquisition of consulting 

services, technology purchases, and staff/board 

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 

credits in annual competitive rounds. The 

CDEs, in turn, provide tax credits to private 

investors in low-income communities. In 

addition to awarding tax credits, the CDFI 

Fund monitors CDE compliance with the 

terms of their allocation agreements.

Bank Enterprise Award Program (No funding)

Through the BEA Program, the CDFI Fund 

encourages insured depository institutions to 

increase investments and services in distressed 

communities and financial assistance to 

CDFIs. The CDFI Fund does not propose to 

fund the BEA Program in FY 2012.

Native Initiatives ($12,000,000 from direct 

appropriations)

The Native Initiatives comprises two 

components: (i) the Native American CDFI 

Assistance Program (NACA Program) through 

which financial assistance (FA) and technical 

assistance (TA) 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.

Capital Magnet Fund (No funding)

Through the CMF, the CDFI Fund increases 

capital investment for the development, 
preservation, rehabilitation, and purchase of 

affordable housing for low-, very low-, and 

extremely low-income families, and related 

economic development activities. As initially 

conceived, the CMF was to be capitalized 

through proceeds from Fannie Mae and 

Freddie. The CDFI Fund does not propose to 

fund the CMF in FY 2012.

Administration ($22,965,000 from direct 

appropriations)

Administration encompasses the CDFI Fund’s 

operational support and management activities 

for each of the award 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 

three-year award assistance and seven-year 

allocation agreements. In addition, resources 

will be utilized for a business application

enhancement upgrade and external program 

research evaluations.

Financial Education and Counseling (No 

funding)

Through the FEC Pilot Program, the CDFI 

Fund makes grants to eligible organizations to 

provide a range of financial education and 

counseling services to prospective 

homebuyers. The CDFI Fund does not propose 

to fund the FEC Pilot Program in FY 2012.

Hawaii Financial Ed and Counseling (No 

funding)

Through the FEC Pilot Program (Hawaii), the 

CDFI Fund makes grants to eligible 

organizations to provide a range of financial 

education and counseling services to 

prospective homebuyers in the State of 

Hawaii. The CDFI Fund does not propose to 

fund the FEC Pilot Program (Hawaii) in 

FY 2012.

Bank on USA Initiative ($41,425,000 from 

direct appropriations)

Through the Bank on USA initiative, the CDFI 

Fund will work in partnership with Treasury’s 

Office of Financial Education and Access to 

award grants to CDFIs to promote access to 

and innovations in affordable and appropriate 

financial services and basic consumer credit 

products for households without access to such 

products and services.

Healthy Food Financing Initiative 

($25,000,000 from direct appropriations)

Through the HFFI, the CDFI Fund will make 

CDFI Program awards to CDFIs and NMTC 

Program awards to CDEs that will finance

healthy food alternatives in low-income 

neighborhoods.

Legislative Proposals

The CDFI Fund does not recommend any 

legislative changes for FY 2012.
CDFI Performance by Budget Activity

Budget Activity Performance Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Economic competitiveness ALL - Award Cycle Time N/A N/A B 7.5 7.5

Economic competitiveness ALL - Disbursement Cycle Time N/A N/A B 2.0 2.0

Economic competitiveness ALL - Jobs Created/Maintained N/A N/A N/A 51,312 48,991

Community Development 

Financial Institutions Program

CDFI - Number of Loans/Investments 

Originated (Annual)

N/A N/A N/A B B

Native Initiatives NACA - Number of Loans/Investments 

Originated (Annual)

N/A N/A N/A B B

New Markets Tax Credit 

Program

Community Development Entities' 

Annual Investments In Low-Income 

Communities ($ billions) (Oe)

3.3 3.6 3.1 3.0 3.0

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

Discontinued, and B - Baseline

Description of Performance

In FY 2010, CDFIs reported leveraging private 

investment in the prior year of approximately

$1.9 billion (based on reporting from program 

year 2009 results), more than triple the target 

of $600 million; this success was largely due 

to increased CDFI Program funding which was 

met by private sector commitments despite the 

effects of the financial crisis. 

In FY 2010, the NMTC Program 

competitively awarded $5 billion in NMTC 

allocation authority to CDEs, including the 

$1.5 billion in Recovery Act authority, 

providing tax credit allocation authority to 

CDEs for targeted investments in low-income 

communities. As reported in FY 2010 (based 

on reporting from program year 2009 results), 

cumulative investments in low-income 

communities by CDEs rose to $15.8 billion 

(exceeding the performance target) and 

amounted to an annual increase of $3.1 billion 

over the prior year (exceeding the annual 

target by $600 million). 

In FY 2010, the BEA Program received 76 

applications requesting a total of $94 million 

compared to 58 applications requesting 

approximately $57 million in FY 2009. The 

CDFI Fund selected 69 FDIC-insured 

institutions to receive nearly $25 million in 

awards. FY 2010 applicants were 

headquartered in 20 states and the District of 

Columbia. In the FY 2010 funding round 

(based on the 2009 Assessment Period), 

awardees provided $373.9 million in qualified 

loans or investments in distressed 

communities, $53.9 million in qualified loans, 

deposits and technical assistance to CDFIs, 

and $233.3 million in qualified financial 

services in distressed communities.

In FY 2010, the Native Initiatives registered a 

26 percent increase in the total assets of Native 

CDFIs. In FY 2010, the NACA Program 

received 61 applications requesting a total of 

$23.7 million. The CDFI Fund awarded 45 

organizations a total of $10.3 million for both 

FA and TA funding in FY 2010.
In its inaugural FY 2010 Capital Magnet Fund 

(CMF) funding round, the CDFI Fund 

announced $80 million in competitively 

awarded grants to 23 CDFIs and qualified 

nonprofit housing organizations serving 38 

states. The CDFI Fund received a total of 230 

applications for the FY 2010 CMF funding 

round. 

In FY 2010, the administration implemented 

two productivity measures. These measures 

replaced the old administrative efficiency 

measure, which was intrinsically difficult to 

compute because it required allocating a share 

of organizational overhead to each program. 

The new program-level measure has two 

components: cycle time from the date when 

applications are received to the date of award 

announcement; and time from date of award 

announcement to date of disbursement. These 

two program efficiency measures (applicationaward and award-disbursement cycle times) 

were analyzed across all programs to 

formulate a composite, CDFI Fund-wide 

efficiency measure for each measure was 

based on the weighted average of the number 

of awards per program.