FAQ Question
How should loan purchases be presented for review in connection with the Target Market requirements?
FAQ Answer
- All loan purchases closed during the relevant review timeframe in connection with the Target Market requirements must be presented as eligible Financial Products activity.
- Loans purchased from Certified CDFI(s), whether purchased individually or in a bundle, may be counted toward meeting the CDFI Certification Target Market benchmark requirements when an “OTP – Certified CDFI(s)” Target Market component is an allowable part of the overall CDFI Certification Target Market or, if applicable, a component of the collective review Target Market for relevant entities. Each bundled loan purchase from a Certified CDFI counts as a single Financial Product transaction.
- Loans purchased from Certified CDFI(s), whether purchased individually or in a bundle, may also be counted toward meeting the CDFI Certification Target Market benchmark requirements if the eligible transaction(s) were directed to an allowable market component of the CDFI Certification Target Market for the primary entity under review or, if applicable, an entity’s collective review Target Market. In these instances, the purchased loans are recognized as Financial Products directed to the Target Market(s) of the original borrowers. Since these transactions would be designated as something other than an “OTP – Certified CDFI(s)” Target Market component, each loan purchased within a bundle must be counted as a single Financial Products transaction.
- Loans purchased from entities that do not have CDFI Certification may be counted toward meeting the CDFI Certification Target Market benchmark requirements if the eligible transaction(s) were directed to an allowable market component in the CDFI Certification Target Market for the primary entity under review or, if applicable, the collective review Target Market. In these instances, purchased loans are recognized as Financial Products directed to the Target Market(s) of the original borrowers. Applicants that purchase Target Market loans from non-Certified CDFI entities in a bundle may count each of the purchased loans as a single Financial Products transaction.”