Earlier today, the Community Development Financial Institutions Fund (CDFI Fund) opened applications for the CDFI Equitable Recovery Program. The CDFI Fund team has spent the past year diligently working to deploy $1.75 billion in supplemental COVID-19 recovery resources that were included in the Consolidated Appropriations Act, 2021 (Pub. L. 116-260) to help CDFIs respond to the economic effects of the COVID-19 pandemic. Information on how to apply to the Equitable Recovery Program is available here.
The legislation creating this initiative established the goal for CDFIs receiving these resources to expand their financial activity in low- or moderate-income communities and to borrowers that have significant unmet capital or financial services’ needs. Congress also authorized the CDFI Fund to set aside a portion of these funds for awards to minority lending institutions—a term established by the legislation to designate Certified CDFIs that predominantly serve minority communities and are either minority depository institutions (MDIs) or meet other standards for accountability to minority populations, as determined by the CDFI Fund. The CDFI Fund will define minority lending institutions (MLIs), consistent with the statute, and will use this definition for data collection and reporting purposes, including designating certain Certified CDFIs as MLIs.
In the Equitable Recovery Program, the CDFI Fund is using COVID-impacted geography as the primary eligibility criterion, rather than reserving funds for organizations designated as MLIs. Eligibility for ERP is based on an applicant’s history of serving COVID-impacted areas, as explained in the Notice of Funds Availability (NOFA). The CDFI Fund will make available the full $1.75 billion authorized by the statute in a single program round for awards to all Certified CDFIs that meet all the eligibility criteria.
The CDFI Fund will soon issue a request for public comment on the definition of “minority lending institution.” Reporting on CDFIs that meet the standards for this designation will be valuable in understanding the landscape of CDFIs serving minorities and minority communities.
We carefully considered how best to implement the Equitable Recovery Program and determined that an approach that awards funds to a broad array of COVID-impacted communities is necessary. We fully expect that this outcome will meet the original expectations of deploying funds to benefit distressed and underserved communities disproportionately impacted by the pandemic.
Please review the NOFA to learn more about the Equitable Recovery Program. Details on how to apply to the program can be found on the CDFI Equitable Recovery Program page on the CDFI Fund’s website. To learn more about CDFI ERP, sign up to receive notifications about the program, here.