CDFI Fund Updates Guidance and Deadlines for Certification Applications

On September 6, 2024, the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund released important updates to the CDFI Certification process. These updates include revised FAQs, new submission deadlines, and additional guidance to help CDFIs navigate the certification process more effectively. For quick access to these resources, click here.

Key Changes at a Glance

Below is a brief description of the key updates. To view the CDFI Funds official article, click here.

Inclusion of HELOCs: Home equity lines of credit (HELOCs) are now considered exceptions under responsible financing standards for mortgage loans.

New Target Market Assessment Methodologies:

  • Housing Unit Income Restrictions: Assessments can now be based on income restrictions for financed housing units.
  • Legal Guardianship/Caretaker: Assessments can also be based on an individual’s role as a legal guardian or caretaker of a person with a disability.

Customized Investment Areas (CIA): Applicants serving non-metropolitan CIAs must ensure that at least 85% of financing activities target qualified census tracts within these areas to meet the 60% Target Market benchmark.

Updated Target Market Assessment Timing: Guidance on when CDFIs must begin using the new pre-approved Target Market methodologies.

Loan Explanation Requirements: Expanded guidance for applicants on how to explain why they do not assess a borrower’s ability to repay for mortgage, consumer, or small business loans.

Overdraft Programs and NSF Fees: New guidance on demonstrating how overdraft programs or non-sufficient funds (NSF) fees can align with a community development mission.

Loan Purchases and Participations: Clarifications on reporting and qualifying loan purchases and participations.

Low-Income Population Assessment: Census tracts are no longer used as the comparison area to assess income. The new geographic comparison area impacts the assessment of Low-Income Targeted Populations (LITP).

Certification Agreement: The CDFI Fund has introduced a new CDFI Certification Agreement Template which approved applicants must sign to maintain certification.

Revised Submission Timeline

The early reapplication window for CDFI Certification has been adjusted to run from October 28, 2024, to January 6, 2025. Early applicants not recertified during this period will maintain certification through December 31, 2025, but must reapply by that date. General reapplication deadlines, based on fiscal year-end dates, remain unchanged.

If you have any questions or need assistance with any of the above information, please reach out to Gracie Nelson at [email protected] or Nayab Abbasi at [email protected].

Posted in Advocacy on the Move, Regulatory Advocacy.