February gives me the chance to extend a belated Happy New Year! It also provides an opportunity for the Community Development Financial Institutions Fund (CDFI Fund) to connect with Community Development Institutions (CDFIs), Community Development Entities (CDEs), and mission-based lenders to share some of our plans for 2023.
Before looking ahead to the coming year, I think it is important to reflect on the CDFI Fund’s work over the course of last year and highlight its ongoing efforts to expand economic opportunity for underserved people and communities through the growth of, and investment in, CDFIs and mission-focused lenders.
Of particular note, CDFI Program Financial Assistance (FA) recipients reported originating loans or investments totaling more than $38 billion in fiscal year (FY) 2022. This included providing financing to more than 101,000 businesses and nearly 54,000 affordable housing units. Over the course of the pandemic, FA recipients have collectively originated more than $76 billion in loans and investments.
CDFIs also had impressive results in deploying targeted COVID-recovery resources. CDFI Rapid Response Program (CDFI RRP) recipients reported lending or investing an additional $14.8 billion. This number will no doubt increase as RRP Award Recipients continue sharing their results with us. Combined, since the start of the pandemic, CDFI RRP and FA recipients have reported lending or investing more than $90 billion.
To get the full picture, take a moment to review the CDFI Fund’s FY 2022 Agency Financial Report. It provides program-by-program data on the CDFI Fund’s activities, as well as the collective impact on neighborhoods that lack accessible and affordable financial products and services. I think you will agree that there is much that the CDFI community should be proud of and that CDFI Fund resources are more important than ever.
The reward for work well done is more work. No one is more familiar with that then the team at the CDFI Fund. In charting out this coming year, it begins in much the same way 2022 ended—with a flurry of activity and more work to come over the next few months.
In case you missed it, the CDFI Fund began the year with an update on its progress launching the new CDFI Certification Application. While we are confident that a lengthy delay in deploying an updated Application will not be necessary, it is important that we take an appropriate amount of time to review the significant number of comments that were submitted in response the latest iteration of Application revisions. Information on these revisions can be found on the CDFI Fund website.
Please keep reading for updates on application round openings and award announcements for all of the CDFI Fund’s programs.
Bank Enterprise Award Program (BEA Program). Awards were last provided under the FY 2021 round of the BEA Program in April 2022. Since that time, the CDFI Fund solicited comments on an updated program application. We are in the final steps of completing this process. The next round of the program will open before spring of this year and will combine FY 2022 and FY 2023 funding into a single application round.
Capital Magnet Fund. The FY 2023 round of the Capital Magnet Fund program opened January 18, 2023. The deadline for organizations to submit their SF-424 is February 23, 2023 and the deadline to submit Applications is March 21, 2023. Some key changes were made to this round of the Capital Magnet Fund program to provide greater opportunity for Applicants to address affordable housing needs and were detailed in the application opening announcement. Awards will be announced in fall 2023. The CDFI Fund is contemplating additional Capital Magnet Fund changes and, in the spring, will request information and feedback on further modifications to Capital Magnet Fund requirements and policies.
CDFI Bond Guarantee Program (BG Program). The application round for the FY 2023 BG Program will open later in spring. Last year, the CDFI Fund announced $355 million in bond guarantees. This was the largest amount ever issued in the history of the program. To date, the CDFI Fund has guaranteed more than $2.1 billion in bonds and participating CDFIs have deployed approximately $1.4 billion in loans.
CDFI Equitable Recovery Program (CDFI ERP). 696 CDFIs requested nearly $7.7 billion in CDFI ERP awards, which is nearly 4.4 times the level of available funding ($1.75 billion). The CDFI Fund will announce the CDFI ERP award recipients by this coming spring. Over the summer, the CDFI Fund requested information on criteria used to designate Minority Lending Institutions (MLIs). A total of 25 comments were submitted in response to this request. The CDFI Fund is in the process of reviewing these comments to formulate MLI designation criteria, which will be released later in 2023.
Community Development Financial Institutions Program (CDFI Program). Applications for FY 2022 CDFI Program and Native CDFI Assistance Program (NACA Program) Financial Assistance (FA) and Technical Assistance (TA) awards were due in April 2022. A total of 719 organizations requested a combined level of $577.9 million in awards, which is nearly three times the amount of available funding. Almost 40% of all Certified CDFIs applied for an FA or TA award in this round. The FY 2022 TA awards were announced in September. The FY 2022 FA awards will be announced later this quarter.
While the exact date for opening the next round has not yet been set, it will be in fall 2023 and will combine FY 2023 and FY 2024 funding in a single application round for the CDFI Program and NACA Program. This timeline will provide us the opportunity to solicit public feedback on the FA and TA applications, as well as the evaluation process. A Request for Comment will be published in the Federal Register in the next few weeks.
New Markets Tax Credit Program (NMTC Program). The calendar year (CY) 2022 round of the program opened on November 18, 2022. Applications were due on January 26, 2023. A total of $5 billion in New Market Tax Credit allocation is available for award. Awards will be announced in the fall of this year. In addition, work is continuing on the NMTC Native Initiative and the next workshop will take place later this month. Information on the NMTC Native Initiative is available on the CDFI Fund’s website, here.
Small Dollar Loan Program (SDL Program). The FY 2022 SDL Program awards were announced in September 2022. The third round of the program will open in the fall of this year and will be a combined FY 2023 and FY 2024 funding round.
I hope this provides a thorough outline of what the CDFI Fund is currently working on and what to anticipate over the next several months. The CDFI Fund will provide continuing updates on a program-by-program basis—make sure you are signed up for our GovDelivery service to ensure you receive these timely updates. I hope all of you have a safe and productive year.