Bond Guarantee Program; Notice of Guarantee Availability (NOGA) Inviting Qualified Issuer Applications and Guarantee Applications, 36018-36028 [2013-14154]

Agencies

• Community Development Financial Institutions Fund
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 78, Number 115 (Friday, June 14, 2013)]
[Notices]
[Pages 36018-36028]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14154]


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DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Bond Guarantee Program; Notice of Guarantee Availability (NOGA) 
Inviting Qualified Issuer Applications and Guarantee Applications

    Announcement Type: Announcement of opportunity to submit Qualified 
Issuer Applications and Guarantee Applications.

    Catalog of Federal Domestic Assistance (CFDA) Number: 21.011.

DATES: Qualified Issuer Applications and Guarantee Applications may be 
submitted to the CDFI Fund starting on the date of publication of this 
NOGA. Applications will be reviewed by the CDFI Fund on an ongoing 
basis, in the order in which they are received or by such other 
criteria that the CDFI Fund may establish and publish, in its sole 
discretion. In order to be considered for the issuance of a Guarantee 
under FY 2013 program authority, Qualified Issuer Applications and 
Guarantee Applications must be submitted by July 17, 2013. Subject to 
Congressional authorization to issue Guarantees in FY 2014, Qualified 
Issuer Applications and Guarantee Applications received after July 17, 
2013 may be considered under FY 2014 authority.
    Executive Summary: This NOGA is published in connection with the 
CDFI Bond Guarantee Program, administered by the Community Development 
Financial Institutions Fund (CDFI Fund), a wholly owned government 
corporation within the U.S. Department of the Treasury (Treasury). The 
purpose of this NOGA is to notify the public that: (i) Parties 
interested in being approved as Qualified Issuers may submit Qualified 
Issuer Applications and (ii) Qualified Issuers may submit Guarantee 
Applications to be approved for a Guarantee under the CDFI Bond 
Guarantee Program. This NOGA also explains application submission and 
evaluation requirements and processes, agency contacts, and information 
on CDFI Bond Guarantee Program outreach.

I. Guarantee Opportunity Description

A. Authority; Program Summary; Additional Reference Documents; 
Definitions

    1. Authority. The CDFI Bond Guarantee Program is authorized by the 
Small Business Jobs Act of 2010 (Pub. L. 111-240; 12 U.S.C. 4713a) (the 
Act). Section 1134 of the Act amended the Riegle Community Development 
and Regulatory Improvement Act of 1994 (12 U.S.C. 4701, et seq.) to 
provide authority to the Secretary of the Treasury to establish and 
administer the CDFI Bond Guarantee Program.
    2. Program summary. The purpose of the CDFI Bond Guarantee Program 
is to support CDFI lending by providing Guarantees for Bonds issued for 
Eligible Community or Economic Development Purposes, as authorized by 
section 1134 and 1703 of the Act. The Secretary, as the Guarantor of 
the Bonds, will provide a 100 percent Guarantee for the repayment of 
the Verifiable Principal, Interest, and Call Premium of Bonds issued by 
Qualified Issuers. As the CDFI Bond Guarantee Program has been 
structured, a Qualified Issuer, approved by the CDFI Fund, will issue 
Bonds that will be purchased by the Federal Financing Bank. The 
Qualified Issuer will use Bond Proceeds to provide Bond Loans to 
Eligible CDFIs. The Eligible CDFIs will use Bond Loan proceeds to 
provide Secondary Loans to Secondary Borrowers.
    In FY 2013, the Secretary may guarantee up to five Bond Issues, or 
up to $500 million with a minimum Guarantee of $100 million per Bond 
Issue. The maximum maturity of the Bonds will be 30 years; the Bonds 
will be taxable. The Bonds will support CDFI lending in Investment 
Areas by providing a source of low-cost, long-term capital to CDFIs.
    3. Guarantee availability. Pursuant to this NOGA, the Guarantor may 
provide Guarantees in the aggregate amount of up to $500 million in FY 
2013. Additional authority to provide Guarantee for Bonds in FY 2014 
may be made available subject to Congressional action.
    4. Additional reference documents. In addition to this NOGA, the 
CDFI Fund encourages interested parties and applicants to review the 
following documents, which will be posted on the CDFI Bond Guarantee 
Program page of the CDFI Fund's Web site at https://www.cdfifund.gov. 
(a) CDFI Bond Guarantee Program Regulations. The interim rule that 
governs the CDFI Bond Guarantee Program was published on February 5, 
2013 (78 FR 8296; 12 CFR part 1808) (the Regulations) and provides the 
regulatory requirements and parameters for CDFI Bond Guarantee Program 
implementation and administration including general provisions, 
eligibility, eligible activities, applications for Guarantee and 
Qualified Issuer, evaluation and selection, terms and conditions of the 
Guarantee, Bonds, Bond Loans, and Secondary Loans. In addition to the 
Regulations, the CDFI Fund has provided a document that summarizes 
certain program terms and conditions, which may be found on the CDFI 
Fund's Web site.
    (b) Application materials. Details regarding Qualified Issuer 
Application and Guarantee Application content requirements are found in 
this NOGA and the respective applications materials.
    (c) Program documentation. Interested parties should review certain 
CDFI Bond Guarantee Program template documents, which will be used in 
connection with each Guarantee and will be posted on the CDFI Fund's 
Web site for review. Such documents include, among others:
    (i) The Agreement to Guarantee, which describes the roles and 
responsibilities of the Qualified Issuer, will be signed by the 
Qualified Issuer and the Guarantor and will include term sheets as 
appendices that will be signed by each individual Eligible CDFI;
    (ii) The Bond Trust Indenture, which describes responsibilities of 
the Master Servicer/Trustee in overseeing the servicing of the Bonds 
and will be entered into by the Qualified Issuer and the Master 
Servicer/Trustee (to be selected by the CDFI Fund);
    (iii) The Bond Loan Agreement, which describes the terms and 
conditions of Bond Loans and will be

[[Page 36019]]

entered into by the Qualified Issuer and each Eligible CDFI that 
receives a Bond Loan;
    (iv) The Bond Purchase Agreement, which describes the terms and 
conditions under which the Bond Purchaser will purchase the Bonds 
issued by the Qualified Issuer and will be signed by the Bond 
Purchaser, the Qualified Issuer, the Guarantor and the CDFI Fund. This 
document also includes the provisions for prepayment privileges and the 
calculation for the prepayment discount or premium; and
    (v) The Future Advance Promissory Bond, which will be signed by the 
Qualified Issuer as its promise to repay the Bond Purchaser. This 
document also defines prepayment privileges and includes the 
instructions for prepayment of the Bond.
    The form documents may be updated periodically, as needed, and will 
be tailored, as appropriate, to the particular terms and conditions of 
a Guarantee. Accordingly, the template documents should not be relied 
on, but instead are provided for illustrative purposes.
    (d) Frequently Asked Questions. The CDFI Fund will periodically 
post on its Web site responses to questions that are asked by parties 
interested in the CDFI Bond Guarantee Program.
    5. Definitions. Capitalized terms used herein and not defined 
elsewhere are defined in section 1808.102 of the Regulations.
    B. Coordination with broader community development strategies. 
Consistent with Federal efforts to promote community revitalization, it 
is important for communities to develop a comprehensive neighborhood 
revitalization strategy that addresses neighborhood assets essential to 
transforming distressed neighborhoods into healthy and vibrant 
communities. Neighborhood transformation can best occur when 
comprehensive neighborhood revitalization plans embrace the coordinated 
use of programs and resources that address the interrelated needs 
within a community. Although not a requirement for participating in the 
CDFI Bond Guarantee Program, the Federal Government believes that a 
CDFI will be most successful when it is a part of, and contributes to, 
an area's broader neighborhood revitalization strategy.
    C. Designated Bonding Authority. The CDFI Fund has determined that, 
for purposes of this NOGA, it will not solicit applications from 
entities seeking to serve as a Qualified Issuer in the role of the 
Designated Bonding Authority, pursuant to 12 CFR 1808.201, in either FY 
2013 or FY 2014.
    D. Noncompetitive process. The CDFI Bond Guarantee Program is a 
non-competitive program through which Qualified Issuer Applications and 
Guarantee Applications will undergo a merit-based evaluation (i.e., 
applications will not be scored against each other in a competitive 
manner in which higher ranked applicants are favored over lower ranked 
applicants). Applications will be reviewed by the CDFI Fund on an 
ongoing basis, and Guarantees will be provided in the order in which 
Guarantee Applications are approved or by such other criteria that the 
CDFI Fund may establish and publish, in its sole discretion. However, 
pursuant to the Regulations at 12 CFR 1808.504(c), the Guarantor may 
limit the number of Guarantees made per year or the number of Guarantee 
Applications accepted to ensure that a sufficient examination of 
Guarantee Applications is conducted.
    E. Relationship to other CDFI Fund programs. Award funds received 
under any other CDFI Fund Program cannot be used by any participant, 
including Qualified Issuers, Eligible CDFIs, and Secondary Borrowers, 
to pay principal, interest, fees, administrative costs, or issuance 
costs (including Bond Issuance Fees) related to the CDFI Bond Guarantee 
Program, or to fund the Risk-Share Pool for each Bond Issue.
    F. Relationship and interplay with other Federal programs and 
Federal funding.
    1. Eligible CDFIs may not use Bond Loans to refinance existing 
Federal debt or to service debt from other Federal credit programs.
    2. The CDFI Bond Guarantee Program underwriting process will 
include a comprehensive review of the Eligible CDFI's concentration of 
sources of funds available for debt service, including the 
concentration of sources from other Federal programs and level of 
reliance on said sources, to determine the Eligible CDFI's ability to 
service the additional debt.
    G. Contemporaneous application submission. Qualified Issuer 
Applications may be submitted contemporaneously with Guarantee 
Applications; however, the CDFI Fund will review an entity's Qualified 
Issuer Application and make its Qualified Issuer determination prior to 
approving a Guarantee Application.

II. General Application Information

    The following requirements apply to all Qualified Issuer 
Applications and Guarantee Applications submitted under this NOGA.

A. CDFI Certification Requirements

    1. The Qualified Issuer applicant must be a Certified CDFI or an 
entity designated by a Certified CDFI to issue Bonds on its behalf. 
Eligible CDFI applicants must be Certified CDFIs as of the date of 
submission of the Guarantee Application. If approved for a Guarantee, 
each Eligible CDFI must be a Certified CDFI as of the Bond Issue Date 
and must maintain its respective CDFI certification throughout the term 
of the corresponding Bond.
    2. A Certified CDFI is an entity that has been certified by the 
CDFI Fund as meeting the CDFI certification requirements set forth in 
12 CFR 1805.201. For purposes of this NOGA, a Certified CDFI is an 
entity that has received official notification from the CDFI Fund that 
it meets all CDFI certification requirements as of the date of 
submission of the associated Qualified Issuer Application and/or 
Guarantee Application, which certification has not expired, and has not 
been notified by the CDFI Fund that its certification has been 
terminated.
    3. In cases in which the CDFI Fund provided a Certified CDFI with 
written notification that its original or most recent certification had 
been extended, the extended certification remains in full force and 
effect unless or until any of the following has occurred: (i) The CDFI 
Fund's written notice of the extended period of certification includes 
a written expiration date for that extension, which has now passed; 
(ii) the CDFI Fund has published new requirements for certification 
which supersede the certification extension and redefine parameters or 
limits to the certification extension, resulting in an expiration date 
for the extension which has now passed; or (iii) the CDFI Fund has 
notified the Certified CDFI that its certification, including the 
additional extension period, is revoked or terminated.
    4. The CDFI Fund reserves the right to re-examine the CDFI 
certification status of a Qualified Issuer applicant or an entity that 
wishes to be an Eligible CDFI, and to require that such applicant or 
entity submit a new CDFI certification application in advance of its 
certification expiration date, if applicable.

B. Application Submission

    1. Electronic submission. All Qualified Issuer Applications and 
Guarantee Applications must be submitted electronically through 
myCDFIFund, the CDFI Fund's internet-based interface. Applications sent 
by mail, fax, or other form will not be

[[Page 36020]]

permitted, except in circumstances that the CDFI Fund, in its sole 
discretion, deems acceptable. Please note that Applications will not be 
accepted through Grants.gov.
    2. Applicant identifier numbers. Please note that, pursuant to OMB 
guidance (68 Fed. Reg. 38402), each Qualified Issuer applicant and 
Guarantee applicant must provide, as part of its Application, its Dun 
and Bradstreet Data Universal Numbering System (DUNS) number, as well 
as DUNS numbers for its proposed Program Administrator, its proposed 
Servicer, and each Certified CDFI that is included in the Qualified 
Issuer Application and Guarantee Application. In addition, each 
Application must include a valid and current Employer Identification 
Number (EIN), with a letter or other documentation from the IRS 
confirming the Qualified Issuer applicant's EIN, as well as EINs for 
its proposed Program Administrator, its proposed Servicer, and each 
Certified CDFIs that is included in any Application. An Application 
that does not include such DUNS numbers, EINs and documentation is 
incomplete and will be rejected by the CDFI Fund. Applicants should 
allow sufficient time for the IRS and/or Dun and Bradstreet to respond 
to inquiries and/or requests for the required identification numbers.
    3. System for Award Management (SAM). On July 30, 2012, the Central 
Contractor Registration (CCR) transitioned to the SAM. All data in the 
registrant database has been migrated from CCR into SAM. Any entity 
that needs to create a new account or update its current registration 
must register for a user account in SAM. Registering with SAM is 
required for each Qualified Issuer applicant, its proposed Program 
Administrator, its proposed Servicer, and each Certified CDFI that is 
included in any Application. The CDFI Fund will not consider any 
Applications that do not meet the requirement that each entity must be 
properly registered before the date of Application submission. The CDFI 
Fund does not manage the SAM registration process, so entities must 
contact SAM directly for issues related to registration. The CDFI Fund 
strongly encourages all applicants to ensure that their SAM 
registration (and the SAM registration for their Program 
Administrators, Servicers and each Certified CDFI that is included in 
the Qualified Issuer Application and Guarantee Application) is updated 
and that their accounts have not expired. For information regarding SAM 
registration, please visit https://www.sam.gov/sam.
    4. myCDFIFund accounts. Each Qualified Issuer applicant, its 
proposed Program Administrator, its proposed Servicer, and each 
Certified CDFI that is included in the Qualified Issuer Application or 
Guarantee Application must register User and Organization accounts in 
myCDFIFund, the CDFI Fund's Internet-based interface. Each such entity 
must be registered as an Organization and register at least one (1) 
User Account in myCDFIFund in order for any Application to be 
considered complete. As myCDFIFund is the CDFI Fund's primary means of 
communication with applicants with regard to its programs, each such 
entity must make sure that it updates the contact information in its 
myCDFIFund account before any Application is submitted. For more 
information on myCDFIFund, please see the ``Frequently Asked 
Questions'' link posted at https://www.cdfifund.gov/myCDFI/Help/Help.asp.

C. Form of Application

    1. As of the date of this NOGA, the Qualified Issuer Application, 
the Guarantee Application and related application guidance may be found 
on the CDFI Bond Guarantee Program's page on the CDFI Fund's Web site 
at https://www.cdfifund.gov.
    2. Paperwork Reduction Act. Under the Paperwork Reduction Act (44 
U.S.C. chapter 35), an agency may not conduct or sponsor a collection 
of information, and an individual is not required to respond to a 
collection of information, unless it displays a valid OMB control 
number. Pursuant to the Paperwork Reduction Act, the Qualified Issuer 
Application, the Guarantee Application, and the Secondary Loan 
Requirements have been assigned the following control number: 1559-
0044.
    3. Application deadlines. In order to be considered for the 
issuance of a Guarantee under FY 2013 program authority, Qualified 
Issuer Applications and Guarantee Applications must be submitted by 
July 17, 2013. Subject to Congressional authorization to issue 
Guarantees in FY 2014, Qualified Issuer Applications and Guarantee 
Applications received after July 17, 2013 may be considered for FY 2014 
authority.
    4. Format. Detailed Qualified Issuer Application and Guarantee 
Application content requirements are found in the Applications and 
application guidance. The CDFI Fund will read only information 
requested in the Application and reserves the right not to read 
attachments or supplemental materials that have not been specifically 
requested in this NOGA, the Qualified Issuer or the Guarantee 
Application. Supplemental materials or attachments such as letters of 
public support or other statements that are meant to bias or unduly 
influence the Application review process will not be read.
    5. Application revisions. After submitting a Qualified Issuer 
Application or a Guarantee Application, the applicant will not be 
permitted to revise or modify the Application in any way unless 
authorized or requested by the CDFI Fund.
    6. Material changes.
    (a) In the event that there are material changes after the 
submission of a Qualified Issuer Application prior to the designation 
as a Qualified Issuer, the applicant must notify the CDFI Fund of such 
material changes information in a timely and complete manner. The CDFI 
Fund will evaluate such material changes, along with the Qualified 
Issuer Application, to approve or deny the designation of the Qualified 
Issuer.
    (b) In the event that there are material changes after the 
submission of a Guarantee Application (including, but not limited to, a 
revision of the Capital Distribution Plan or a change in the Eligible 
CDFIs that are included in the application) prior to or after the 
designation as a Qualified Issuer or approval of a Guarantee 
Application or Guarantee, the applicant must notify the CDFI Fund of 
such material changes information in a timely and complete manner. The 
Guarantor will evaluate such material changes, along with the Guarantee 
Application, to approve or deny the Guarantee Application and/or 
determine whether to modify the terms and conditions of the Agreement 
to Guarantee. This evaluation may result in a delay of the approval or 
denial of a Guarantee Application.

D. Eligibility and Completeness Review

    The CDFI Fund will review each Qualified Issuer and Guarantee 
Application to determine whether it is complete and the applicant meets 
eligibility requirements described in the Regulations at 12 CFR 
1808.200 and 1808.401, this NOGA, and the Applications. An incomplete 
Qualified Issuer Application or Guarantee Application, or one that does 
not meet eligibility requirements, will be rejected. If the CDFI Fund 
determines that additional information is needed to assess the 
Qualified Issuer's and/or the Certified CDFIs' ability to participate 
in and comply with the requirements of the CDFI Bond Guarantee Program, 
the CDFI Fund may require that the Qualified Issuer furnish additional, 
clarifying, confirming or supplemental information. If the CDFI Fund 
requests such additional, clarifying, confirming or supplemental 
information, the

[[Page 36021]]

Qualified Issuer must provide it within the timeframes requested by the 
CDFI Fund. Until such information is provided to the CDFI Fund, the 
Qualified Issuer Application or Guarantee Application will not be moved 
forward for the Substantive Review process. The Guarantor shall approve 
or deny a Guarantee Application no later than 90 days after the date 
the Guarantee Application has been advanced for Substantive Review.

E. Regulated Entities

    In the case of Qualified Issuer applicants, proposed Program 
Administrators, proposed Servicers and Certified CDFIs that are 
included in the Qualified Issuer Application or Guarantee Application 
that are Insured Depository Institutions and Insured Credit Unions, the 
CDFI Fund will consider information provided by, and views of, the 
Appropriate Federal Banking Agencies. If any such entity is a CDFI bank 
holding company, the CDFI Fund will consider information provided by 
the Appropriate Federal Banking Agencies of the CDFI bank holding 
company and its CDFI bank(s). Throughout the Application review 
process, the CDFI Fund will consult with the Appropriate Federal 
Banking Agency about the applicant's financial safety and soundness. If 
the Appropriate Federal Banking Agency identifies safety and soundness 
concerns, the CDFI Fund will assess whether the concerns cause or will 
cause the applicant to be incapable of undertaking activities related 
to the CDFI Bond Guarantee Program. The CDFI Fund also reserves the 
right to require an Insured CDFI applicant to improve safety and 
soundness conditions prior to being approved as a Qualified Issuer. In 
addition, the CDFI Fund will take into consideration Community 
Reinvestment Act assessments of Insured Depository Institutions and/or 
their Affiliates.

F. Prior CDFI Fund Awardees

    All applicants must be aware that success under any of the CDFI 
Fund's programs is not indicative of success under this NOGA. Prior 
CDFI Fund awardees should note the following:
    1. Failure to meet reporting requirements. The CDFI Fund will not 
consider a Qualified Issuer Application or Guarantee Application if the 
applicant, its proposed Program Administrator, its proposed Servicer, 
or any of the Certified CDFIs included in the Qualified Issuer 
Application or Guarantee Application, is a prior awardee or allocatee 
under any CDFI Fund program and is not current on the reporting 
requirements set forth in a previously executed agreement(s), as of the 
date of the Application submission. Please note that the CDFI Fund's 
automated system typically acknowledge only a report's receipt. Such an 
acknowledgment does not verify or otherwise represent that the report 
received was complete and therefore met reporting requirements.
    2. Pending resolution of noncompliance. If a Qualified Issuer 
applicant, its proposed Program Administrator, its proposed Servicer, 
or any of the Certified CDFIs included in the Qualified Issuer 
Application or Guarantee Application, is a prior awardee or allocatee 
under any CDFI Fund program and (i) it has submitted complete and 
timely reports to the CDFI Fund that demonstrate noncompliance with a 
previously executed agreement with the CDFI Fund, and (ii) the CDFI 
Fund has yet to make a final determination as to whether the entity is 
in default of its previously executed agreement, the CDFI Fund will 
consider the Qualified Issuer Application or Guarantee Application 
pending full resolution, in the sole determination of the CDFI Fund, of 
the noncompliance.
    3. Default status. The CDFI Fund will not consider a Qualified 
Issuer Application or Guarantee Application if the applicant, its 
proposed Program Administrator, its proposed Servicer, or any of the 
Certified CDFIs included in the Qualified Issuer Application or 
Guarantee Application, is a prior awardee or allocatee under any CDFI 
Fund program if, as of the date of Qualified Issuer Application or 
Guarantee Application submission, (i) the CDFI Fund has made a 
determination that such entity is in default of a previously executed 
agreement and (ii) the CDFI Fund has provided written notification of 
such determination to the Qualified Issuer applicant indicating the 
length of time the default status is effective. Such entities will be 
ineligible to submit a Qualified Issuer Application, or be included in 
such submission, as the case may be, so long as the applicant's, its 
proposed Program Administrator's, its proposed Servicer's, or such 
Certified CDFI's prior award or allocation remains in default status or 
such other time period as specified by the CDFI Fund in writing.
    4. Undisbursed award funds. The CDFI Fund will not consider a 
Qualified Issuer Application or Guarantee Application, if the 
applicant, its proposed Program Administrator, its proposed Servicer, 
or any Certified CDFI that is included in the Qualified Issuer 
Application or Guarantee Application, is an awardee under any CDFI Fund 
program and has undisbursed award funds (as defined below) as of the 
Qualified Issuer Application or Guarantee Application submission date. 
The CDFI Fund will include the combined undisbursed prior awards, as of 
the date of the Qualified Issuer Application submission, of the 
applicant, the proposed Program Administrator, the proposed Servicer, 
and any Certified CDIs included in the application.
    For purposes of the calculation of undisbursed award funds for the 
Bank Enterprise Award (BEA) Program, only awards made to the Qualified 
Issuer applicant, its proposed Program Administrator, its proposed 
Servicer, and any Certified CDFI included in the Qualified Issuer 
Application, three to five calendar years prior to the end of the 
calendar year of the Qualified Issuer Application submission date are 
included. For purposes of the calculation of undisbursed award funds 
for the CDFI Program, the Native American CDFI Assistance (NACA) 
Program, and the Capital Magnet Fund (CMF), only awards made to the 
Qualified Issuer applicant, its proposed Program Administrator, its 
proposed Servicer, and any Certified CDFI included in the Qualified 
Issuer Application, two to five calendar years prior to the end of the 
calendar year of the Qualified Issuer Application submission date are 
included.
    Undisbursed awards cannot exceed five percent of the total 
includable awards for the Applicant's BEA/CDFI/NACA/CMF awards as of 
the date of submission of the Qualified Issuer Application. The 
calculation of undisbursed award funds does not include: (i) Tax credit 
allocation authority made available through the New Markets Tax Credit 
Program; (ii) any award funds for which the CDFI Fund received a full 
and complete disbursement request from the awardee by the date of 
submission of the Qualified Issuer Application; (iii) any award funds 
for an award that has been terminated in writing by the CDFI Fund or 
de-obligated by the CDFI Fund; or (iv) any award funds for an award 
that does not have a fully executed assistance or award agreement. The 
CDFI Fund strongly encourages Qualified Issuer applicants, proposed 
Program Administrators, proposed Servicers, and any Certified CDFIs 
included in a Qualified Issuer Application that wish to request 
disbursements of undisbursed funds from prior awards to provide the 
CDFI Fund with a complete disbursement request at least 10 business 
days prior to the date of

[[Page 36022]]

submission of a Qualified Issuer Application.

G. Contact the CDFI Fund

    A Qualified Issuer applicant, its proposed Program Administrator, 
its proposed Servicer, or any Certified CDFIs included in the Qualified 
Issuer Application or Guarantee Application that are prior CDFI Fund 
awardees are advised to: (i) Comply with requirements specified in CDFI 
Fund assistance, allocation, and/or award agreement(s), and (ii) 
contact the CDFI Fund to ensure that all necessary actions are underway 
for the disbursement or deobligation of any outstanding balance of said 
prior award(s). Any such parties that are unsure about the disbursement 
status of any prior award should contact the CDFI Fund's Senior 
Resource Manager via email at CDFI.disburseinquiries@cdfi.treas.gov. 
All outstanding reports and compliance questions should be directed to 
Certification, Compliance Monitoring, and Evaluation support by email 
at ccme@cdfi.treas.gov or by telephone at (202) 653-0423. The CDFI Fund 
will respond to applicants' reporting, compliance, or disbursement 
questions between the hours of 9:00 a.m. and 5:00 p.m. ET, starting on 
the date of the publication of this NOGA.

H. Evaluating Prior Award Performance

    In the case of a Qualified Issuer, a proposed Program 
Administrator, a proposed Servicer, or Certified CDFI that has received 
awards from other Federal programs, the CDFI Fund reserves the right to 
contact officials from the appropriate Federal agency or agencies to 
determine whether the entity is in compliance with current or prior 
award agreements, and to take such information into consideration 
before issuing a Guarantee. In the case of such an entity that has 
previously received funding through any CDFI Fund program, the CDFI 
Fund will review those entities (or their Affiliates) that have a 
history of providing late reports and consider such history in the 
context of organizational capacity and the ability to meet future 
reporting requirements. The CDFI Fund may also bar from consideration 
any such entity that has, in any proceeding instituted against it in, 
by, or before any court, governmental, or administrative body or 
agency, received a final determination within the last three years 
indicating that the entity has discriminated on the basis of race, 
color, national origin, disability, age, marital status, receipt of 
income from public assistance, religion, or sex.

I. Changes to Review Procedures

    The CDFI Fund reserves the right to change its completeness, 
eligibility and evaluation criteria and procedures if the CDFI Fund 
deems it appropriate. If such changes materially affect the CDFI Fund's 
decision to approve or deny a Qualified Issuer Application, the CDFI 
Fund will provide information regarding the changes through the CDFI 
Fund's Web site.

J. Decisions Are Final

    The CDFI Fund's Qualified Issuer Application decisions are final. 
The Guarantor's Guarantee Application decisions are final. There is no 
right to appeal the decisions. Any applicant that is not approved by 
the CDFI Fund or the Guarantor may submit a new Application and will be 
considered based on the newly submitted Application. Such newly 
submitted Applications will be reviewed along with all other pending 
Applications in the order in which they are received, or by such other 
criteria that the CDFI Fund may establish and publish, in its sole 
discretion.

III. Qualified Issuer Application

A. General

    This NOGA invites interested parties to submit a Qualified Issuer 
Application to be approved as a Qualified Issuer under the CDFI Bond 
Guarantee Program.
    1. Qualified Issuer. The Qualified Issuer is a Certified CDFI, or 
any entity designated by a Certified CDFI to issue Bonds on its behalf, 
that meets the requirements of the Regulations and this NOGA, and that 
has been approved by the CDFI Fund pursuant to review and evaluation of 
its Qualified Issuer Application. The Qualified Issuer will, among 
other duties: (i) Organize the Eligible CDFIs that have designated it 
to serve as their Qualified Issuer; (ii) prepare and submit a complete 
and timely Qualified Issuer and Guarantee Application to the CDFI Fund; 
(iii) if the Qualified Issuer Application is approved by the CDFI Fund 
and the Guarantee Application is approved by the Guarantor, prepare the 
Bond Issue; (iv) manage all Bond Issue servicing, administration, and 
reporting functions; (v) make Bond Loans; (vi) oversee the making of 
Secondary Loans; (vii) ensure compliance throughout the duration of the 
Bond with all provisions of the Regulations, and Bond Documents and 
Bond Loan Documents entered into between the Guarantor, the Qualified 
Issuer, and the Eligible CDFI; and (viii) ensure that the Master 
Servicer/Trustee complies with the Bond Trust Indenture and all other 
applicable regulations.
    2. Qualified Issuer Application. The Qualified Issuer Application 
is the document that an entity seeking to serve as a Qualified Issuer 
submits to the CDFI Fund to apply to be approved as a Qualified Issuer 
prior to consideration of a Guarantee Application.
    3. Qualified Issuer Application evaluation, general. Each Qualified 
Issuer Application will be evaluated by the CDFI Fund and, if 
acceptable, the applicant will be approved as a Qualified Issuer, in 
the sole discretion of the CDFI Fund. The CDFI Fund's Qualified Issuer 
Application review and evaluation process is based on established 
procedures, which may include interviews of applicants and/or site 
visits to applicants conducted by the CDFI Fund. Through the 
Application review process, the CDFI Fund will evaluate Qualified 
Issuer applicants on a merit basis and in a fair and consistent manner. 
Each Qualified Issuer applicant will be reviewed on its ability to 
successfully carry out the responsibilities of a Qualified Issuer 
throughout the life of the Bond.

B. Qualified Issuer Application: Eligibility

    1. CDFI certification requirements. The Qualified Issuer applicant 
must be a Certified CDFI or an entity designated by a Certified CDFI to 
issue Bonds on its behalf.
    2. Designation and attestation by Certified CDFIs. An entity 
seeking to be approved by the CDFI Fund as a Qualified Issuer must be 
designated as a Qualified Issuer by at least one Certified CDFI. The 
Qualified Issuer applicant will prepare and submit a complete and 
timely Qualified Issuer Application to the CDFI Fund in accordance with 
the requirements of the Regulations, this NOGA and the Application. A 
Certified CDFI must attest in the Qualified Issuer Application that it 
has designated the Qualified Issuer to act on its behalf and that the 
information in the Qualified Issuer Application regarding it is true, 
accurate and complete.

C. Substantive Review and Approval Process

    1. Substantive Review. (a) If the CDFI Fund determines that the 
Qualified Issuer Application is complete and eligible, the CDFI Fund 
will undertake a substantive review in accordance with the criteria and 
procedures described in the Regulations, this NOGA, the Qualified 
Issuer Application, and standard operating procedures.

[[Page 36023]]

    (b) As part of the substantive evaluation process, the CDFI Fund 
reserves the right to contact the Qualified Issuer applicant (as well 
as its proposed Program Administrator, its proposed Servicer, and each 
designating Certified CDFI in the Qualified Issuer Application) by 
telephone, email, mail, or through on-site visits for the purpose of 
obtaining additional, clarifying, confirming, or supplemental 
application information. The CDFI Fund reserves the right to collect 
such additional, clarifying, confirming, or supplemental information 
from said entities as it deems appropriate. If contacted for 
additional, clarifying, confirming, or supplemental information, said 
entities must respond within the time parameters set by the CDFI Fund 
or the Qualified Issuer Application will be rejected.
    2. Qualified Issuer criteria. Qualified Issuer determinations will 
be made based on Qualified Issuer applicants' experience and expertise, 
in accordance with the following criteria:
    (a) Organizational capability.
    (i) The Qualified Issuer applicant must demonstrate that it has the 
appropriate expertise, capacity, experience, and qualifications to 
issue Bonds for Eligible Purposes, as well as manage the Bond Issue on 
the terms and conditions set forth in the Regulations, this NOGA, and 
the Bond Documents, satisfactory to the CDFI Fund.
    (ii) The Qualified Issuer applicant must demonstrate that it has 
the appropriate expertise, capacity, and experience to originate, 
underwrite, service and monitor Bond Loans for Eligible Purposes, 
targeted to Low-Income Areas and Underserved Rural Areas.
    (iii) The Qualified Issuer applicant must demonstrate that it has 
the appropriate expertise, capacity, and experience to manage the 
disbursement process set forth in the Regulations at 12 CFR 1808.302 
and 1808.307.
    (b) Servicer. The Qualified Issuer applicant must demonstrate that 
it has (either directly or contractually through another designated 
entity) the appropriate expertise, capacity, and experience, or is 
otherwise qualified to serve as Servicer. The Qualified Issuer 
Application must provide information that demonstrates that the 
Qualified Issuer's Servicer has the expertise and experience necessary 
to perform certain required administrative duties (including, but not 
limited to, Bond Loan servicing functions).
    (c) Program Administrator. The Qualified Issuer applicant must 
demonstrate that it has (either directly or contractually through 
another designated entity) the appropriate expertise, capacity, and 
experience, or is otherwise qualified to serve as Program 
Administrator. The Qualified Issuer Application must provide 
information that demonstrates that the Qualified Issuer's Program 
Administrator has the expertise and experience necessary to perform 
certain required administrative duties (including, but not limited to, 
compliance monitoring and reporting functions).
    (d) Strategic alignment. The Qualified Issuer applicant will be 
evaluated on its strategic alignment with the program on factors that 
include, but are not limited to: (i) Its mission's strategic alignment 
with community and economic development objectives set forth in the 
Riegle Act at 12 U.S.C. 4701; (ii) its strategy for deploying the 
entirety of funds that may become available to the Qualified Issuer 
through the proposed Bond Issue; (iii) its experience providing up to 
30-year capital to CDFIs or other borrowers in Low-Income Areas or 
Underserved Rural Areas as such terms are defined in the Regulations at 
12 CFR 1808.102; (iv) its track record of activities relevant to its 
stated strategy; and (v) other factors relevant to the Qualified 
Issuer's strategic alignment with the program.
    (e) Experience. The Qualified Issuer applicant will be evaluated on 
factors that demonstrate that it has previous experience: (i) 
Performing the duties of a Qualified Issuer including making bond 
issuances, loan servicing, program administration, underwriting, 
financial reporting, and loan administration; (ii) lending in Low-
Income Areas and Underserved Rural Areas; and (iii) indicating that the 
Qualified Issuer's current principals and team members have 
successfully performed the required duties, and that previous 
experience is applicable to the current principals and team members.
    (f) Management and staffing. The Qualified Issuer applicant must 
demonstrate that it has sufficiently strong management and staffing 
capacity to undertake the duties of Qualified Issuer. The applicant 
must also demonstrate that its proposed Program Administrator and its 
proposed Servicer have sufficiently strong management and staffing 
capacity to undertake their respective requirements under the CDFI Bond 
Guarantee Program. Strong management and staffing capacity is evidenced 
by factors that include, but are not limited to: (i) A sound track 
record of delivering on past performance; (ii) a documented succession 
plan; (iii) organizational stability including staff retention; and 
(iv) a clearly articulated, reasonable and well-documented staffing 
plan.
    (g) Financial strength. The Qualified Issuer applicant must 
demonstrate the strength of its financial capacity and activities 
including, among other items, financially sound business practices 
relative to the industry norm for bond issuers, as evidenced by reports 
of Appropriate Federal Banking Agencies, Appropriate State Agencies, or 
auditors. Such financially sound business practices will demonstrate: 
(i) The financial wherewithal to perform activities related to the Bond 
Issue such as administration and servicing; (ii) the ability to 
originate, underwriting, close, and disburse loans in a prudent manger; 
(iii) whether the applicant is depending on external funding sources 
and the reliability of long-term access to such funding; (iv) whether 
there are foreseeable counterparty issues or credit concerns that are 
likely to affect the applicant's financial stability; and (v) a budget 
that reflects reasonable assumptions about upfront costs as well as 
ongoing expenses and revenues.
    (h) Systems and information technology. The Qualified Issuer 
applicant must demonstrate that it (as well as its proposed Program 
Administrator and its proposed Servicer) has, among other things: (i) A 
strong information technology capacity and the ability to manage loan 
servicing, administration, management and document retention; (ii) 
appropriate office infrastructure and related technology to carry out 
the CDFI Bond Guarantee Program activities; and (iii) sufficient backup 
and disaster recovery systems to maintain uninterrupted business 
operations.
    (i) Pricing structure. The Qualified Issuer applicant must provide 
its proposed pricing structure for performing the duties of Qualified 
Issuer, including the pricing for the roles of Program Administrator 
and Servicer. Although the pricing structure and fees shall be decided 
by negotiation between market participants without interference or 
approval by the CDFI Fund, the CDFI Fund will evaluate whether the 
Qualified Issuer applicant's proposed pricing structure is feasible to 
carry out the responsibilities of a Qualified Issuer over the life of 
the Bond and sound implementation of the program.
    (j) Other criteria. The Qualified Issuer applicant must meet such 
other criteria as may be required by the CDFI Fund, as set forth in the 
Qualified Issuer Application or required by the CDFI Fund in its sole 
discretion, for the purposes of evaluating the merits of a Qualified 
Issuer Application.

[[Page 36024]]

    (k) Third-party data sources. The CDFI Fund, in its sole 
discretion, may consider information from third-party sources 
including, but not limited to, periodicals or publications, publicly 
available data sources, or subscriptions services for additional 
information about the Qualified Issuer applicant, the proposed Program 
Administrator, the proposed Servicer and each Certified CDFI that is 
included in the Qualified Issuer Application. Any additional 
information received from such third-party sources will be reviewed and 
evaluated through a systematic and formalized process.

D. Notification of Qualified Issuer Determination

    Each Qualified Issuer applicant will be informed of the CDFI Fund's 
decision in writing, by email using the addresses maintained in the 
entity's myCDFIFund account. The CDFI Fund will not notify the proposed 
Program Administrator, the proposed Servicer, or the Certified CDFIs 
included in the Qualified Issuer Application of its decision regarding 
the Qualified Issuer Application; such contacts are the responsibility 
of the Qualified Issuer applicant.

E. Qualified Issuer Application rejection

    In addition to substantive reasons based on the merits of its 
review, the CDFI Fund reserves the right to reject a Qualified Issuer 
Application if information (including administrative errors) comes to 
the attention of the CDFI Fund that adversely affects an applicant's 
eligibility, adversely affects the CDFI Fund's evaluation of a 
Qualified Issuer Application, or indicates fraud or mismanagement on 
the part of a Qualified Issuer applicant or its proposed Program 
Administrator, its proposed Servicer, and any Certified CDFI included 
in the Qualified Issuer Application. If the CDFI Fund determines that 
any portion of the Qualified Issuer Application is incorrect in any 
material respect, the CDFI Fund reserves the right, in its sole 
discretion, to reject the Application.

IV. Guarantee Applications

A. General

    This NOGA invites Qualified Issuers to submit a Guarantee 
Application to be approved for a Guarantee under the CDFI Bond 
Guarantee Program.
    1. Guarantee Application.
    (a) The Guarantee Application is the application document that a 
Qualified Issuer (in collaboration with the Eligible CDFIs that seek to 
be included in the proposed Bond Issue) must submit to the CDFI Fund in 
order to apply for a Guarantee. The Qualified Issuer shall provide all 
required information in its Guarantee Application to establish that it 
meets all criteria set forth in the Regulations at 12 CFR 1808.501 and 
this NOGA and can carry out all Guarantee requirements including, but 
not limited to, information that demonstrates that the Qualified Issuer 
has the appropriate expertise, capacity, and experience and is 
qualified to make, administer and service Bond Loans for Eligible 
Purposes.
    (b) The Guarantee Application comprises a Capital Distribution Plan 
and at least one Secondary Capital Distribution Plan, as well as all 
other requirements set forth in this NOGA or as may be required by the 
Guarantor and the CDFI Fund in their sole discretion, for the 
evaluation and selection of Guarantee applicants.
    2. Guarantee Application evaluation, general. The Guarantee 
Application review and evaluation process will be based on established 
standard procedures, which may include interviews of applicants and/or 
site visits to applicants conducted by the CDFI Fund. Through the 
Application review process, the CDFI Fund will evaluate Guarantee 
applicants on a merit basis and in a fair and consistent manner. Each 
Guarantee applicant will be reviewed on its ability to successfully 
implement and carry out the activities proposed in its Guarantee 
Application throughout the life of the Bond.

B. Guarantee Application: Eligibility

    1. Eligibility; CDFI certification requirements. Each Eligible CDFI 
must be a Certified CDFI as of the date of submission of a Guarantee 
Application. If approved for a Guarantee, each Eligible CDFI must be a 
Certified CDFI as of the Bond Issue Date and must maintain its 
respective CDFI certification throughout the term of the corresponding 
Bond. For more information on CDFI Certification see part II of this 
NOGA.
    2. Qualified Issuer as Eligible CDFI. A Qualified Issuer may not 
participate as an Eligible CDFI within its own Bond Issue, but may 
participate as an Eligible CDFI in a Bond Issue managed by another 
Qualified Issuer.
    3. Attestation by proposed Eligible CDFIs. Each proposed Eligible 
CDFI must attest in the Guarantee Application that it has designated 
the Qualified Issuer to act on its behalf and that the information 
pertaining to the Eligible CDFI in the Guarantee Application is true, 
accurate and complete. Each proposed Eligible CDFI must also attest in 
the Guarantee Application that it will use Bond Loan proceeds for 
Eligible Purposes and that Secondary Loans will be made only within the 
applicable Secondary Loan Requirements.

C. Guarantee Application: Preparation

    When preparing the Guarantee Application, the Eligible CDFIs and 
Qualified Issuer must collaborate to determine the composition and 
characteristics of the Bond Issue, ensuring compliance with the Act, 
the Regulations, and this NOGA. The Qualified Issuer is responsible for 
the collection, preparation, verification and submission of the 
Eligible CDFI information that is presented in the Guarantee 
Application. The Qualified Issuer will submit the Guarantee Application 
for the proposed Bond Issue, including any information provided by the 
proposed Eligible CDFIs. In addition, the Qualified Issuer will serve 
as the primary point of contact with the CDFI Fund during the Guarantee 
Application review and evaluation process.

D. Review and Approval Process

    1. Substantive review. (a) If the CDFI Fund determines that the 
Guarantee Application is complete and eligible, the CDFI Fund will 
undertake a Substantive Review in accordance with the criteria and 
procedures described in the Regulations at 12 CFR 1808.501, this NOGA, 
and the Guarantee Application. The Substantive Review of the Guarantee 
Application will include due diligence, underwriting, credit risk 
review and Federal credit subsidy calculation in order to determine the 
feasibility and risk of the proposed Bond Issue, as well as the 
strength and capacity of the Qualified Issuer and each proposed 
Eligible CDFI. Each proposed Eligible CDFI will be evaluated 
independently of the other proposed Eligible CDFIs within the proposed 
Bond Issue.
    (b) As part of the Substantive Review process, the CDFI Fund may 
contact the Qualified Issuer (as well as the proposed Eligible CDFIs 
included in the Guarantee Application) by telephone, email, mail, or 
through an on-site visit for the sole purpose of obtaining additional, 
clarifying, confirming, or supplemental application information. The 
CDFI Fund reserves the right to collect such additional, clarifying, 
confirming or supplemental information as it deems appropriate. If 
contacted for additional, clarifying, confirming, or supplemental 
information, said entities must respond within the time parameters set 
by the CDFI Fund or the Guarantee Application will be rejected.
    2. Guarantee Application criteria. (a) In general, a Guarantee 
Application will

[[Page 36025]]

be evaluated based on the strength and feasibility of the proposed Bond 
Issue, as well as the creditworthiness and performance of the Qualified 
Issuer and the proposed Eligible CDFIs.
    (b) The Capital Distribution Plan must demonstrate the Qualified 
Issuer's comprehensive plan for lending, disbursing, servicing and 
monitoring each Bond Loan in the Bond Issue. It includes, among other 
information, the following components:
    (i) Statement of Proposed Sources and Uses of Funds: Pursuant to 
the requirements set forth in the Regulations at 12 CFR 1808.102(bb) 
and 1808.301, the Qualified Issuer must provide: (A) A description of 
the overall plan for the Bond Issue; (B) a description of the proposed 
uses of Bond Proceeds and proposed sources of funds to repay principal 
and interest on the proposed Bond and Bond Loans; (C) a certification 
that 100 percent of the principal amounts of the proposed Bond will be 
used to make Bond Loans for Eligible Purposes on the Bond Issue Date; 
and (D) description of the extent to which the proposed Bond Loans will 
serve Low-Income Areas or Underserved Rural Areas;
    (ii) Bond Issue Qualified Issuer cash flow model: The Qualified 
Issuer must provide a cash flow model displaying the orderly repayment 
of the Bond and the Bond Loans according to their respective terms. The 
cash flow model shall include disbursement and repayment of Bonds, Bond 
Loans, and Secondary Loans. The cash flow model shall match the 
aggregated cash flows from the Secondary Capital Distribution Plans of 
each of the underlying Eligible CDFIs in the Bond Issue pool;
    (iii) Organizational capacity: If not submitted concurrently, the 
Qualified Issuer must attest that no material changes have occurred 
since the time that it submitted the Qualified Issuer Application;
    (iv) Credit Enhancement (if applicable): The Qualified Issuer must 
provide information about the adequacy of proposed risk mitigation 
provisions designed to protect the financial interests of the Federal 
Government, either directly or indirectly through supporting the 
financial strength of the Bond Issue. This includes, but is not limited 
to, the amount and quality of any Credit Enhancements, terms and 
specific conditions such as renewal options, and any limiting 
conditions or revocability by the provider of the Credit Enhancement;
    (v) Secondary Capital Distribution Plan(s): Each proposed Eligible 
CDFI must provide a comprehensive plan for lending, disbursing, 
servicing and monitoring Secondary Loans, how each proposed Secondary 
Loan will meet Eligible Purposes, and such other requirements that may 
be required by the Guarantor and the CDFI Fund, including:
    (A) Narrative and Statement of Proposed Sources and Uses of Funds: 
Each Eligible CDFI will: (1) Provide a description of proposed uses of 
funds, including the extent to which Bond Loans will serve Low-Income 
Areas or Underserved Rural Areas, and the extent to which Bond Loan 
proceeds will be used (i) to make the first monthly installment of a 
Bond Loan payment, (ii) pay Issuance Fees up to one percent of the Bond 
Loan, and (iii) finance Loan Loss Reserves related to Secondary Loans; 
(2) attest that 100 percent of Bond Loan proceeds designated for 
Secondary Loans will be used to make Secondary Loans that meet 
Secondary Loan Requirements; (3) describe a plan for lending, 
disbursing, servicing, and monitoring Secondary Loans; (4) indicate the 
expected asset classes to which it will lend under the Secondary Loan 
Requirements; (5) indicate examples of previous lending and years of 
experience lending to a specific asset class; (6) provide a table 
detailing specific uses and timing of disbursements, including terms 
and relending plans if applicable; and (7) a community impact analysis, 
including how the proposed Secondary Loans will address financing needs 
that the private market is not adequately serving and specific 
community benefit metrics;
    (B) Eligible CDFI cash flow model: Each Eligible CDFI must provide 
a cash flow model of the proposed Bond Loan which: (1) Matches each 
Eligible CDFI's portion of the Qualified Issuer's cash flow model; and 
(2) tracks the flow of funds through the term of the Bond Issue and 
demonstrates disbursement and repayment of the Bond Loan, Secondary 
Loans, and any utilization of the Relending Fund, if applicable;
    (C) Organizational capacity: Each Eligible CDFI must provide 
documentation indicating the ability of the Eligible CDFI to manage its 
Bond Loan including, but not limited to: (1) Organizational ownership 
and chart of affiliates; (2) organizational documents; (3) management 
or operating agreement, if applicable; (4) an analysis by management of 
its ability to manage the funding, monitoring, and collection of loans 
being contemplated with the proceeds of the Bond Loan; (5) information 
about its board of directors; (6) a governance narrative; (7) 
description of senior management and employee base; (8) independent 
reports, if available; (9) strategic plan or related progress reports; 
and (10) a discussion of the management and information systems used by 
the Eligible CDFI;
    (D) Policies and procedures: Each Eligible CDFI must provide 
policies and procedures for the matching of assets and liabilities, as 
well as loan policies and procedures: A copy of the asset-liability 
matching policy, if applicable; and loan policies which address topics 
including, but not limited to: (1) Origination, underwriting, credit 
approval, interest rates, closing, documentation, and portfolio 
monitoring and (2) risk-rating definitions, charge-offs, and loan loss 
reserve methodology;
    (E) Financial statements: Each Eligible CDFI must provide 
information about the Eligible CDFI's current and future financial 
position, including but not limited to: (1) Most recent three years of 
audited financial statements; (2) current year-to-date or interim 
financial statement; (3) a copy of the current year's approved budget; 
and (4) a three year operating projection;
    (F) Loan portfolio information: Each Eligible CDFI must provide 
information such as: (1) Loan portfolio quality report; (2) pipeline 
report; (3) portfolio listing; (4) a description of other loan assets 
under management; (5) loan products; (6) independent loan review 
report; (7) impact report case studies; and (8) a loan portfolio by 
risk rating and loan loss reserves; and
    (G) Funding sources and financial activity information: Each 
Eligible CDFI must provide information including, but not limited to: 
(1) Current grant information; (2) funding projections; (3) credit 
enhancements; (4) historical investor renewal rates; (5) covenant 
compliance; (6) off-balance sheet contingencies; (7) earned revenues; 
and (8) debt capital statistics.
    (vi) Assurances and certifications that not less than 100 percent 
of the principal amount of Bonds will be used to make Bond Loans for 
Eligible Purposes beginning on the Bond Issue Date, and that Secondary 
Loans shall be made as set forth in subsection 1808.307(b); and
    (vii) Such other information that the Guarantor, the CDFI Fund and/
or the Bond Purchaser may deem necessary and appropriate.
    3. Credit subsidy cost. The credit subsidy cost is the net present 
value of the estimated long-term cost of the Guarantee to the Federal 
Government as determined under the applicable provisions of the Federal 
Credit Reform Act of 1990, as amended (FCRA). Treasury has not received 
appropriated amounts from Congress to cover the credit subsidy costs 
associated with the

[[Page 36026]]

Guarantees issued pursuant to this NOGA. In accordance with FCRA, 
Treasury must consult with, and obtain the approval of, OMB for 
Treasury's calculation of the credit subsidy cost of each Guarantee 
prior to entering into any Agreement to Guarantee.

E. Guarantee Approval

    1. The Guarantor, in the Guarantor's sole discretion, may approve a 
Guarantee, in consideration of the recommendation from the CDFI Bond 
Guarantee Program's Credit Review Board and/or based on the merits of 
the Guarantee Application. The Guarantor shall approve or deny a 
Guarantee Application no later than 90 days after the date the 
Guarantee Application has been advanced for Substantive Review.
    2. The Guarantor reserves the right to approve Guarantees, in whole 
or in part, in response to any, all, or none of the Guarantee 
Applications submitted in response to this NOGA. The Guarantor also 
reserves the right to approve Guarantees in amounts that are less than 
requested in a Guarantee Application. Pursuant to the Regulations at 12 
CFR 1808.504(c), the Guarantor may limit the number of Guarantees made 
per year to ensure that a sufficient examination of Guarantee 
Applications is conducted.
    3. The CDFI Fund will notify the Qualified Issuer in writing of the 
Guarantor's approval or disapproval of a Guarantee Application. If 
approved for a Guarantee, the Qualified Issuer will enter into an 
Agreement to Guarantee, which will include terms and conditions that 
will be signed by each Eligible CDFI. Following the execution of the 
Agreement to Guarantee, the parties will proceed to the Bond Issue 
Date, when the parties will sign the Bond Documents.
    4. The Guarantee shall not be effective until the Guarantor signs 
and delivers the Guarantee.

F. Guarantee Denial

    The Guarantor, in the Guarantor's sole discretion, may deny a 
Guarantee, in consideration of the recommendation from the Credit 
Review Board and/or based on the merits of the Guarantee Application. 
In addition, the Guarantor reserves the right to deny a Guarantee 
Application if information (including administrative errors) comes to 
the Guarantor's attention that adversely affects the Qualified Issuer's 
eligibility, adversely affects the evaluation or scoring of an 
Application, or indicates fraud or mismanagement on the part of the 
Qualified Issuer, Program Administrator, Servicer, and/or Eligible 
CDFIs. Further, if the Guarantor determines that any portion of the 
Guarantee Application is incorrect in any material respect, the 
Guarantor reserves the right, in the Guarantor's sole discretion, to 
deny the Application.

V. Guarantee Administration

    A. Pricing information. Bond Loans will be priced based upon the 
underlying Bond issued by the Qualified Issuer and purchased by the 
Federal Financing Bank (FFB or Bond Purchaser). The FFB will set the 
liquidity premium at the time of the Bond Issue Date, based on the 
duration and maturity of the Bonds according to the FFB's lending 
policies (www.treasury.gov/ffb). Liquidity premiums will be charged in 
increments of \1/8\th of a percent (i.e., 12.5 basis points).
    B. Fees and other payments. The following table includes some of 
the fees that may be applicable to Qualified Issuers and Eligible CDFIs 
after approval of a Guarantee of a Bond Issue, as well as Risk-Share 
Pool funding, prepayment penalties or discounts, and Credit 
Enhancements. The table is not exhaustive; additional fees payable to 
the CDFI Fund or other parties may apply.

----------------------------------------------------------------------------------------------------------------
                         Fee                                                  Description
----------------------------------------------------------------------------------------------------------------
Agency Administrative Fee............................  Payable annually to the CDFI Fund by the Qualified
                                                        Issuer. Equal to 10 basis points on the amount of the
                                                        unpaid principal of the Bond Issue.
Bond Issuance Fees...................................  Amounts paid by an Eligible CDFI for reasonable and
                                                        appropriate expenses, administrative costs, and fees for
                                                        services in connection with the issuance of the Bond
                                                        (but not including the Agency Administrative Fee) and
                                                        the making of the Bond Loan. Bond Issuance Fees
                                                        negotiated between the Qualified Issuer and the Eligible
                                                        CDFI. Up to 1% of Bond Loan Proceeds may be used to
                                                        finance the Bond Issuance Fee.
Servicer fee.........................................  The fees paid by the Eligible CDFI to the Qualified
                                                        Issuer's Servicer. Servicer fees negotiated between the
                                                        Qualified Issuer and the Eligible CDFI.
Program Administrator fee............................  The fees paid by the Eligible CDFI to the Qualified
                                                        Issuer's Program Administrator. Program Administrator
                                                        fees negotiated between the Qualified Issuer and the
                                                        Eligible CDFI.
Master Servicer/Trustee fee..........................  The fees paid by the Qualified Issuer and the Eligible
                                                        CDFI to the Master Servicer/Trustee to carry out the
                                                        responsibilities of the Bond Trust Indenture. Master
                                                        Servicer/Trustee fees negotiated between the Qualified
                                                        Issuer and the Master Servicer/Trustee.
Risk-Share Pool funding..............................  The funds paid by the Eligible CDFIs to cover Risk-Share
                                                        Pool requirements; capitalized by pro rata payments
                                                        equal to 3% of the amount disbursed on the Bond from all
                                                        Eligible CDFIs within the Bond Issue.
Prepayment penalties or discounts....................  Prepayment penalties or discounts may be determined by
                                                        the FFB at the time of prepayment.
Credit Enhancements..................................  Pledges made to enhance the quality of a Bond and/or Bond
                                                        Loan. Credit Enhancements include, but are not limited
                                                        to, the Principal Loss Collateral Provision and letters
                                                        of credit.
----------------------------------------------------------------------------------------------------------------

    C. Annual assessment. In accordance with 12 CFR 1808.302(f), each 
year, beginning on the one year anniversary of the Bond Issue Date (and 
every year thereafter for the term of the Bond Issue), each Qualified 
Issuer must demonstrate that not less than 100 percent of the principal 
amount of the Guaranteed Bonds currently disbursed and outstanding has 
been used to make loans to Eligible CDFIs for Eligible Purposes. If a 
Qualified Issuer fails to demonstrate this requirement within the 90 
days after the anniversary of the Bond Issue Date, the Qualified Issuer 
must repay on that portion of Bonds necessary to bring the Bonds that 
remain outstanding after such repayment into compliance with the 100 
percent requirement above.
    D. Secondary Loan Requirements. In accordance with the Regulations, 
Eligible CDFIs must make Secondary Loans for Eligible Purposes (not 
including loan loss reserves) that align with Secondary Loan 
Requirements. The Secondary Loan Requirements are found on the CDFI 
Fund's Web site at www.cdfifund.gov. Applicants should become familiar 
with the published Secondary Loan Requirements. Secondary Loan 
Requirements are classified by asset class and are subject

[[Page 36027]]

to a Secondary Loan commitment process managed by the Qualified Issuer. 
Within one year of the Bond Issue Date, the Eligible CDFI must close a 
minimum of 50 percent of the Secondary Loans. If this requirement is 
not met, the Qualified Issuer will lose the authority to draw the 
remaining funds under the Bond Issue. Within two years of the Bond 
Issue Date, the Eligible CDFI must close all Secondary Loans within the 
Bond Issue. Eligible CDFIs must disburse all Secondary Loans within 60 
months of the Bond Issue Date. Secondary Loans shall carry loan 
maturities suitable to the loan purpose and consistent with loan-to-
value requirements set forth in the Secondary Loan Requirements. 
Secondary Loan maturities shall not exceed the corresponding Bond or 
Bond Loan maturity date. It is the expectation of the CDFI Fund that 
such interest rates will be reasonable based on the borrower and loan 
characteristics.
    E. Secondary Loan collateral requirements. 1. The Regulations state 
that Secondary Loans must be secured by a first lien of the Eligible 
CDFI on pledged collateral, in accordance with the Regulations (at 12 
CFR 1808.307(f)) and within certain parameters. Examples of acceptable 
forms of collateral may include, but are not limited to: Real property 
(including land and structures); machinery, equipment and movables; 
cash and cash equivalents; accounts receivable; letters of credit; 
inventory; fixtures; contracted revenue streams from non-Federal 
counterparties, provided the Secondary Borrower pledges all assets, 
rights and interests necessary to generate such revenue stream; and a 
Principal Loss Collateral Provision. Intangible assets, such as 
customer relationships, intellectual property rights, and to-be-
constructed real estate improvements, are not acceptable forms of 
collateral.
    2. The Regulations require that Bond Loans must be secured by a 
first lien on a collateral assignment of Secondary Loans, and further 
that the Secondary Loans must be secured by a first lien or parity lien 
on acceptable collateral.
    3. Valuation of the collateral pledged by the Secondary Borrower 
must be based on the Eligible CDFI's credit policy guidelines and must 
conform to the standards set forth in the Uniform Standards of 
Professional Appraisal Practice (USPAP).
    4. Independent third-party appraisals are required for the 
following collateral: Real estate; fixtures, machinery and equipment, 
and movables stock valued in excess of $250,000; contracted revenue 
stream from non-Federal creditworthy counterparties. Secondary Loan 
collateral shall be valued using the cost approach, net of depreciation 
and shall be required for the following: Accounts receivable; 
machinery, equipment and movables; and fixtures.
    F. Qualified Issuer approval of Eligible CDFIs. The Qualified 
Issuer shall not approve any Bond Loans to an Eligible CDFI where the 
Qualified Issuer has actual knowledge, based upon reasonable inquiry, 
that within the past five (5) years the Eligible CDFI: (i) Has been 
delinquent on any payment obligation (except upon a demonstration by 
the Qualified Issuer satisfactory to the CDFI Fund that the delinquency 
does not affect the Eligible CDFI's creditworthiness), or has defaulted 
and failed to cure any other obligation, on a loan or loan agreement 
previously made under the Act; (ii) has been found by the Qualified 
Issuer to be in default of any repayment obligation under any Federal 
program; (iii) is financially insolvent in either the legal or 
equitable sense; or (iv) is not able to demonstrate that it has the 
capacity to comply fully with the payment schedule established by the 
Qualified Issuer.
    G. Credit Enhancements; Principal Loss Collateral Provision. 1. In 
order to achieve the statutory zero-credit subsidy constraint of the 
CDFI Bond Guarantee Program and to avoid a call on the Guarantee, 
Eligible CDFIs are encouraged to include Credit Enhancements and 
Principal Loss Collateral Provisions structured to protect the 
financial interests of the Federal Government.
    2. Credit Enhancements may include, but are not limited to, payment 
guarantees from third parties or Affiliates, lines or letters of 
credit, or other pledges of financial resources that enhance the 
Eligible CDFI's ability to make timely interest and principal payments 
under the Bond Loan.
    3. As distinct from Credit Enhancements, Principal Loss Collateral 
Provisions may be provided in lieu of pledged collateral and in 
addition to pledged collateral. A Principal Loss Collateral Provision 
shall be in the form of cash or cash equivalent guarantees in amounts 
necessary to secure the Eligible CDFI's obligations under the Bond Loan 
after exercising other remedies for default. For example, a Principal 
Loss Collateral Provision may include a deficiency guarantee whereby 
another entity assumes liability after other default remedies have been 
exercised, and covers the deficiency incurred by the creditor. The 
Principal Loss Collateral Provision shall, at a minimum, provide for 
the provision of cash or cash equivalents in an amount that is not less 
than the difference between the value of the collateral and the amount 
of the accelerated Bond Loan outstanding.
    4. In all cases, acceptable Credit Enhancements or Principal Loss 
Collateral Provisions shall be proffered by creditworthy providers and 
shall provide information about the adequacy of the facility in 
protecting the financial interests of the Federal Government, either 
directly or indirectly through supporting the financial strength of the 
Bond Issue. This includes, but is not limited to, the amount and 
quality of any Credit Enhancements, the financial strength of the 
provider of the Credit Enhancement, the terms, specific conditions such 
as renewal options, and any limiting conditions or revocability by the 
provider of the Credit Enhancement.
    5. For Secondary Loans benefitting from a Principal Loss Collateral 
Provision (e.g., a deficiency guarantee), the entity providing the 
Principal Loss Collateral Provision must be underwritten based on the 
same criteria as if the Secondary Loan were being made directly to that 
entity with the exception that the guarantee need not be 
collateralized.
    6. If the Principal Loss Collateral Provision is provided by a 
financial institution that is regulated by an Appropriate Federal 
Banking Agency or an Appropriate State Agency, the guaranteeing 
institution must demonstrate performance of financially sound business 
practices relative to the industry norm for providers of collateral 
enhancements as evidenced by reports of Appropriate Federal Banking 
Agencies, Appropriate State Agencies, and auditors, as appropriate.
    H. Reporting requirements. 1. General. Qualified Issuers and 
Eligible CDFIs that participate in the Bond Guarantee Program will be 
required to execute and deliver at closing legal agreements including 
the Agreement to Guarantee, the Bond Trust Indenture, and the Bond Loan 
Agreement, among others. The forms of these documents, containing terms 
and conditions and covenants over use of proceeds, loan commitments, 
advances, disbursements, principal and interest payments, program fees 
and accounts, Secondary Loans, financial condition and information 
reporting and other matters of the Qualified Issuer, Master Servicer/
Trustee, and Eligible CDFIs, will be published and accessible on the 
CDFI Fund's Web site or sent to the Qualified Issuer by other means.
    2. Reports. (a) In general, as required pursuant to the Regulations 
at 12 CFR 1808.619, the CDFI Fund will collect information from each 
Qualified Issuer

[[Page 36028]]

which may include, but will not be limited to: (i) Quarterly and annual 
financial reports and data (including an OMB A-133 audit, as 
applicable) for the purpose of monitoring the financial health, ratios 
and covenants of Eligible CDFIs that include asset quality (non-
performing assets, loan loss reserves, and net charge-off ratios), 
liquidity (current ratio, quick ratio, working capital, and operating 
liquidity ratio), solvency (capital ratio, self-sufficiency, fixed 
charge, leverage, and debt service coverage ratios); (ii) annual 
reports as to the compliance of the Qualified Issuer and Eligible CDFIs 
with the Regulations and specific requirements of the Bond Documents; 
(iii) monthly reports on uses of Bond Loan proceeds and Secondary Loan 
proceeds; (iv) summary of program accounts and transactions for each 
Bond Issue; (v) Secondary Loan certifications describing Eligible CDFI 
lending, collateral valuation, and eligibility; (vi) financial data on 
Secondary Loans to assess loan performance, quality, and payment 
history; (vii) annual certifications of compliance with program 
requirements; (viii) reports of Eligible CDFI management and/or 
organizational changes; (ix) updates to the Capital Distribution Plan 
(as applicable); (x) supplements and/or clarifications to correct 
reporting errors (as applicable); and (xi) such other information that 
the CDFI Fund and/or the Bond Purchaser may require.
    (b) Detailed information on specific reporting requirements will be 
provided to Qualified Issuers, Program Administrators, Servicers, and 
Eligible CDFIs at a later date. Reporting requirements will be enforced 
through the Agreement to Guarantee and the Bond Loan Agreement, and 
will be assigned a valid OMB control number pursuant to the Paperwork 
Reduction Act.
    (c) Each Qualified Issuer will be responsible for the timely and 
complete submission of the annual reporting documents, including such 
information that must be provided by other entities such as Eligible 
CDFIs or Secondary Borrowers. If such other entities are required to 
provide annual report information or documentation, or other 
documentation that the CDFI Fund may require, the Qualified Issuer will 
be responsible for ensuring that the information is submitted timely 
and complete. Notwithstanding the foregoing, the CDFI Fund reserves the 
right to contact such entities and require that additional information 
and documentation be provided directly to the CDFI Fund.
    (d) The CDFI Fund will use the aforementioned information to 
monitor compliance with the requirements set forth in the Agreement to 
Guarantee and to assess the impact of the CDFI Bond Guarantee Program.
    (e) The CDFI Fund reserves the right, in its sole discretion, to 
modify its reporting requirements if it determines it to be appropriate 
and necessary; however, such reporting requirements will be modified 
only after notice to Qualified Issuers. Additional information about 
reporting requirements pursuant to this NOGA and the Bond Documents 
will be subject to the Paperwork Reduction Act.
    3. Accounting. (a) In general, the CDFI Fund will require each 
Qualified Issuer and Eligible CDFI to account for and track the use of 
Bond Proceeds and Bond Loan proceeds. This means that for every dollar 
of Bond Proceeds and received from the Bond Purchaser, the Qualified 
Issuer is required to inform the CDFI Fund of its uses, including Bond 
Loan proceeds. This will require Qualified Issuers and Eligible CDFIs 
to establish separate administrative and accounting controls, subject 
to the applicable OMB Circulars.
    (b) The CDFI Fund will provide guidance to Qualified Issuers 
outlining the format and content of the information that is to be 
provided on an annual basis, outlining and describing how the Bond 
Proceeds and Bond Loan proceeds were used.

VI. Agency Contacts

    A. The CDFI Fund will respond to questions and provide support 
concerning this NOGA, the Qualified Issuer Application and the 
Guarantee Application between the hours of 9:00 a.m. and 5:00 p.m. ET, 
starting with the date of the publication of this NOGA. Applications 
and other information regarding the CDFI Fund and its programs may be 
obtained from the CDFI Fund's Web site at https://www.cdfifund.gov. The 
CDFI Fund will post on its Web site responses to questions of general 
applicability regarding the CDFI Bond Guarantee Program.
    B. The CDFI Fund's contact information is as follows:

                                          Table 2--Contact Information
----------------------------------------------------------------------------------------------------------------
                                         Telephone number (not toll
           Type of question                        free)                           Email addresses
----------------------------------------------------------------------------------------------------------------
CDFI Bond Guarantee Program...........  (202) 653-0421 Option 5....  bgp@cdfi.treas.gov.
CDFI Certification....................  (202) 653-0423.............  ccme@cdfi.treas.gov.
Compliance Monitoring and Evaluation..  (202) 653-0423.............  ccme@cdfi.treas.gov.
Information Technology Support........  (202) 653-0422.............  ithelpdesk@cdfi.treas.gov.
----------------------------------------------------------------------------------------------------------------

    C. Communication with the CDFI Fund. The CDFI Fund will use the 
myCDFIFund Internet interface to communicate with applicants, Qualified 
Issuers, Program Administrators, Servicers, Certified CDFIs and 
Eligible CDFIs, using the contact information maintained in their 
respective myCDFIFund accounts. Therefore, each such entity must 
maintain accurate contact information (including contact person and 
authorized representative, email addresses, fax numbers, phone numbers, 
and office addresses) in its respective myCDFIFund account. For more 
information about myCDFIFund (which includes information about the CDFI 
Fund's Community Investment Impact System), please see the Help 
documents posted at https://www.cdfifund.gov/ciis/accessingciis.pdf.

VII. Information Sessions and Outreach

    The CDFI Fund may conduct webcasts, webinars, or information 
sessions for organizations that are considering applying to, or are 
interested in learning about, the CDFI Bond Guarantee Program. For 
further information, please visit the CDFI Fund's Web site at https://www.cdfifund.gov.

    Authority: Public Law 111-240; 12 U.S.C. 4701, et seq.; 12 CFR 
1808.

    Dated: June 10, 2013.
Dennis Nolan,
Deputy Director, Community Development Financial Institutions Fund.
[FR Doc. 2013-14154 Filed 6-13-13; 8:45 am]
BILLING CODE 4810-70-P