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March 25, 2009
CDFI Fund Fast-Tracks Capital for Underserved Communities
    by Robert Kropp

Community Development Financial Institutions and other Community Development Entities will receive $90 million in June and another $50 million in September.


The US Treasury Departmentís Community Development Financial Institutions (CDFI) Fund announced a plan to disburse funds made available under the American Recovery and Reinvestment Act of 2009. The Recovery Act appropriates $90 million to the CDFI Fund to make awards through the CDFI Program and the Native American CDFI Assistance (NACA) Program in June.

CDFIs that do not have a current application pending will have the opportunity to apply for additional funding totaling $50 million, to be awarded by September 30.

The CDFI Fund supports loan funds, credit unions, banks, venture capital firms, and other financing entities that serve the most underserved populations and communities in the US.

In order to get money to businesses and communities rapidly in a time of economic crisis, the CDFI Fund will award all Recovery Act funds in less than 90 days, and will begin disbursing awards within 120 days. The CDFI Fund will re-open its 2009 CDFI and NACA program award rounds to allow additional applicants to apply, as well as to offer current applicants the opportunity to request larger awards.

Applicants that applied for grants in 2009 will be permitted to increase the amounts of their requests to as much as $2 million under the CDFI Program and $750,000 under the NACA Program. Included in the Recovery Act is a waiver of the program's matching funds requirement.

Because of the increased funding, the CDFI Fund anticipates that the number of CDFIs receiving awards in 2009 will be significantly more than the 66 CDFIs that received awards in 2008. In order to disburse the additional funding, the CDFI Fund will re-open the application window to permit additional CDFIs to apply.

Award recipients will be expected to invest award dollars into low-income communities in an expedited manner, track the use of the award on all investments, and provide data to the Federal government on a quarterly basis that indicates how award dollars were spent and the impacts realized in the communities they serve.

The CDFI Fund also announced that its New Markets Tax Credit (NMTC) Program will allocate an additional $1.5 billion in 2009, increasing the CDFI Fund's allocation authority for tax credits from $3.5 billion to $5 billion.

 

 
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