Bond Guarantee Program, FY 2020; Notice of Guarantee Availablity, 15851-15867 [2020-05682]

Agencies

• Community Development Financial Institutions Fund
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 85, Number 54 (Thursday, March 19, 2020)]
[Notices]
[Pages 15851-15867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05682]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Community Development Financial Institutions Fund


Bond Guarantee Program, FY 2020; Notice of Guarantee Availablity

    Funding Opportunity Title: Notice of Guarantee Availability (NOGA) 
inviting Qualified Issuer Applications and Guarantee Applications for 
the Community Development Financial Institutions (CDFI) Bond Guarantee 
Program.
    Announcement Type: Announcement of opportunity to submit Qualified 
Issuer Applications and Guarantee Applications.
    Catalog of Federal Domestic Assistance (CFDA) Number: 21.011.
    Key Dates: Qualified Issuer Applications and Guarantee Applications 
may be submitted to the CDFI Fund starting on the date of publication 
of this NOGA. In order to be considered for the issuance of a Guarantee 
in fiscal year (FY) 2020, Qualified Issuer Applications must be 
submitted by 11:59 p.m. Eastern Time (ET) on May 11, 2020 and Guarantee 
Applications must be submitted by 11:59 p.m. ET on May 18, 2020. If 
applicable, CDFI Certification Applications must be received by the 
CDFI Fund by 11:59 p.m. ET on April 6, 2020. Under FY 2020 authority 
Bond Documents and Bond Loan documents must be executed, 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, in 
its sole discretion, and in any event by September 30, 2020.
    Key Changes: For FY 2020 the collateral requirements for all asset 
classes except CDFI to Financing Entity utilizing pooled tertiary loans 
and the Alternative Financial Structure are as follows: Each Bond Loan 
must be secured at all times by Secondary Loans, and/or cash collateral 
pledged by the Eligible CDFI in the amount of 110% of the unpaid 
principal balance of the Bond Loan. In addition, each Bond Loan must 
either receive third party support (the ``Third Party Support'') or 
provide additional pledged collateral in the form of Secondary Loans, 
and/or cash collateral to secure the underlying Bond Loan in an amount 
ranging from 1% to 10% of the unpaid principal balance of the Bond 
Loan. Therefore, the total collateralization for each Bond Loan plus 
Third Party Support will range from 111% to 120% (the ``Bond Loan 
Overcollateralization Requirement''). Some portion of the Third Party 
Support must be cash collateral or other pledged assets/property as 
determined by the CDFI Fund, the remaining portion of the Third Party 
Support may be a Principal Loss Collateral Provision in the form of a 
guarantee, letter of credit, or similar instrument in accordance with 
the Secondary Loan Requirements. The actual percentage of required 
Third Party Support will be determined by the CDFI Fund during 
Guarantee Application review; however, all applicants should be 
prepared to provide Third Party Support in an amount up to 10% of the 
unpaid principal balance of the Bond Loan. All collateral pledged under 
the BG Program, including Third Party Support, must conform to the BG 
Program Secondary Loan Requirements. Overcollateralization requirements 
for the asset class CDFI to Financing Entity utilizing pooled tertiary 
loans remains 125% of the unpaid principal balance of the underlying 
Secondary Loan. Overcollateralization requirements for the Alternative 
Financial Structure remain at 120% plus other required capital support 
as detailed in the

[[Page 15852]]

template term sheet. Please see Section II(B) of this NOGA for 
information on these new requirements.
    Executive Summary: This NOGA is published in connection with the 
CDFI Bond Guarantee Program, administered by the Community Development 
Financial Institutions Fund (CDFI Fund), the U.S. Department of the 
Treasury (Treasury). Through this NOGA, the CDFI Fund announces the 
availability of up to $500 million of Guarantee Authority in FY 2020. 
This NOGA explains application submission and evaluation requirements 
and processes, and provides agency contacts and information on CDFI 
Bond Guarantee Program outreach. Parties interested in being approved 
for a Guarantee under the CDFI Bond Guarantee Program must submit 
Qualified Issuer Applications and Guarantee Applications for 
consideration in accordance with this NOGA.
    Capitalized terms used in this NOGA and not defined elsewhere are 
defined in the CDFI Bond Guarantee Program regulations (12 CFR 
1808.102) and the CDFI Program regulations (12 CFR 1805.104).

I. Guarantee Opportunity Description

    A. Authority. The CDFI Bond Guarantee Program was 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 (Secretary) to 
establish and administer the CDFI Bond Guarantee Program.
    B. Bond Issue size; Amount of Guarantee authority. In FY 2020, the 
Secretary may guarantee Bond Issues having a minimum Guarantee of $100 
million each, up to an aggregate total of $500 million.
    C. 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% Guarantee for the repayment of the 
Verifiable Losses of Principal, Interest, and Call Premium of Bonds 
issued by Qualified Issuers. Qualified Issuers, approved by the CDFI 
Fund, will issue Bonds that will be purchased by the Federal Financing 
Bank. The Qualified Issuer will use 100 percent of Bond Proceeds to 
provide Bond Loans to Eligible CDFIs, which will use Bond Loan proceeds 
for Eligible Community and Economic Development Purposes, including 
providing Secondary Loans to Secondary Borrowers in accordance with the 
Secondary Loan Requirements. Secondary Loans may support lending in the 
following asset classes: CDFI-to-CDFI, CDFI to Financing Entity, 
Charter Schools, Commercial real estate, Daycare centers, Healthcare 
facilities, Rental housing, Rural infrastructure, Owner-occupied homes, 
Licensed senior living and long-term care facilities, Small business, 
and Not-for-Profit organizations, as these terms are defined in the 
Secondary Loan Requirements, which can be found on the CDFI Fund's 
website at www.cdfifund.gov/bond.
    D. Review of Guarantee Applications, in general.
    1. Qualified Issuer Applications submitted with Guarantee 
Applications will have priority for review over Qualified Issuer 
Applications submitted without Guarantee Applications. With the 
exception of the aforementioned prioritized review, all Qualified 
Issuer Applications and Guarantee 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 in its sole 
discretion.
    2. Guarantee Applications that are incomplete or require the CDFI 
Fund to request additional or clarifying information may delay the 
ability of the CDFI Fund to move the Guarantee Application to the next 
phase of review. Submitting an incomplete Guarantee Application earlier 
than other applicants does not ensure first approval.
    3. Qualified Issuer Applications and Guarantee Applications that 
were received in FY 2019 and that were neither withdrawn nor declined 
in FY 2019 will be considered under FY 2020 authority.
    4. Pursuant to the Regulations at 12 CFR 1808.504(c), the Guarantor 
may limit the number of Guarantees issued per year or the number of 
Guarantee Applications accepted to ensure that a sufficient examination 
of Guarantee Applications is conducted.
    E. Additional reference documents. In addition to this NOGA, the 
CDFI Fund encourages interested parties to review the following 
documents, which have been posted on the CDFI Bond Guarantee Program 
page of the CDFI Fund's website at https://www.cdfifund.gov/bond.
    1. CDFI Bond Guarantee Program Regulations. The regulations that 
govern the CDFI Bond Guarantee Program were published on February 5, 
2013 (78 FR 8296; 12 CFR part 1808) (the Regulations), and provide 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.
    2. Application materials. Details regarding Qualified Issuer 
Application and Guarantee Application content requirements are found in 
this NOGA and the respective application materials. Interested parties 
should review the template Bond Documents and Bond Loan documents that 
will be used in connection with each Guarantee. The template documents 
are posted on the CDFI Fund's website for review. Such documents 
include, among others:
    a. The Secondary Loan Requirements, which contain the minimum 
required criteria (in addition to the Eligible CDFI's underwriting 
criteria) for a loan to be accepted as a Secondary Loan or Other 
Pledged Loan. The Secondary Loan Requirements include the General 
Requirements and the Underwriting Review Checklist;
    b. 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 
exhibits that will be signed by each individual Eligible CDFI;
    c. The Term Sheet(s), which describe the material terms and 
conditions of the Bond Loan from the Qualified Issuer to the Eligible 
CDFI. The CDFI Fund website includes template term sheets for the 
General Recourse Structure, the Alternative Financial Structure, and 
for the CDFI to Financing Entity Asset Class utilizing pooled tertiary 
loans;
    d. The Bond Trust Indenture, which describes the responsibilities 
of the Master Servicer/Trustee in overseeing the Trust Estate and the 
servicing of the Bonds, which will be entered into by the Qualified 
Issuer and the Master Servicer/Trustee;
    e. The Bond Loan Agreement, which describes the terms and 
conditions of Bond Loans, and will be entered into by the Qualified 
Issuer and each Eligible CDFI that receives a Bond Loan;
    f. 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; and
    g. The Future Advance Promissory Bond, which will be signed by the

[[Page 15853]]

Qualified Issuer as its promise to repay the Bond Purchaser.
    The template documents may be updated periodically, as needed, and 
will be tailored, as appropriate, to the terms and conditions of a 
particular Bond, Bond Loan, and Guarantee.
    The Bond Documents and the Bond Loan documents reflect the terms 
and conditions of the CDFI Bond Guarantee Program and will not be 
substantially revised or negotiated prior to execution.
    F. Frequently Asked Questions. The CDFI Fund may periodically post 
on its website responses to questions that are asked by parties 
interested in the CDFI Bond Guarantee Program.
    G. 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 FY 2020.
    H. 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 (meaning, 
applications will not be scored against each other in a competitive 
manner in which higher ranked applicants are favored over lower ranked 
applicants).
    I. Relationship to other CDFI Fund programs.
    1. 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 a Bond Issue.
    2. Bond Proceeds may not be used to refinance any projects financed 
with proceeds from the Capital Magnet Fund (CMF).
    3. Bond Proceeds may not be used to refinance a leveraged loan 
during the seven-year NMTC compliance period. However, Bond Proceeds 
may be used to refinance a QLICI after the seven-year NMTC compliance 
period has ended, so long as all other programmatic requirements are 
met.
    4. The terms Qualified Equity Investment, Community Development 
Entity, and QLICI are defined in the NMTC Program's authorizing 
statute, 26 U.S.C. 45D.
    J. Relationship and interplay with other Federal programs and 
Federal funding. Eligible CDFIs may not use Bond Loans to refinance 
existing Federal debt or to service debt from other Federal credit 
programs.
    1. 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.
    2. Funds from other Federal programs may not be used to meet the 
Bond Guarantee Program Bond Loan Overcollateralization Requirement.
    3. In the event that the Eligible CDFI proposes to use other 
Federal funds to service Bond Loan debt or as a Credit Enhancement for 
Secondary Loans, the CDFI Fund may require, in its sole discretion that 
the Eligible CDFI provide written assurance from such other Federal 
program in a form that is acceptable to the CDFI Fund and that the CDFI 
Fund may rely upon, that said use is permissible.
    K. 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. As noted above in D (1), review 
priority will be given to any Qualified Issuer Application that is 
accompanied by a Guarantee Application.
    L. Other restrictions on use of funds. Bond Proceeds may not be 
used to finance or refinance any trade or business consisting of the 
operation of any private or commercial golf course, country club, 
massage parlor, hot tub facility, suntan facility, racetrack or other 
facility used for gambling, or any store the principal business of 
which is the sale of alcoholic beverages for consumption off-premises. 
Bond Proceeds may not be used to finance or refinance tax-exempt 
obligations or finance or refinance projects that are also financed by 
tax-exempt obligations if: (a) Such financing or refinancing results in 
the direct or indirect subordination of the Bond Loan or Bond Issue to 
the tax-exempt obligations or (b) such financing or refinancing results 
in a corresponding guarantee of the tax-exempt obligation. Qualified 
Issuers and Eligible CDFIs must ensure that any financing made in 
conjunction with tax- exempt obligations complies with CDFI Bond 
Guarantee Program Regulations.

I. General Application Information

    The following requirements apply to all Qualified Issuer 
Applications and Guarantee Applications submitted under this NOGA, as 
well as any Qualified Issuer Applications and Guarantee Applications 
submitted under the FY 2019 NOGA that were neither withdrawn nor 
declined in FY 2019.
    A. CDFI Certification Requirements.
    1. In general. By statute and regulation, the Qualified Issuer 
applicant must be either a Certified CDFI (an entity that has been 
certified by the CDFI Fund as meeting the CDFI certification 
requirements set forth in 12 CFR 1805.201) or an entity designated by a 
Certified CDFI to issue Bonds on its behalf. An Eligible CDFI must be a 
Certified CDFI as of the Bond Issue Date and must maintain its CDFI 
certification throughout the term of the corresponding Bond.
    2. CDFI Certification requirements. Pursuant to the regulations 
that govern CDFI certification (12 CFR 1805.201), an entity may be 
certified if it is a legal entity (meaning, that it has properly filed 
articles of incorporation or other organizing documents with the State 
or other appropriate body in the jurisdiction in which it was legally 
established, as of the date the CDFI Certification Application is 
submitted) and meets the following requirements:
    a. Primary mission requirement (12 CFR 1805.201(b)(1)): To be a 
Certified CDFI, an entity must have a primary mission of promoting 
community development, which mission must be consistent with its Target 
Market. In general, the entity will be found to meet the primary 
mission requirement if its incorporating documents or board-approved 
narrative statement (i.e., mission statement or resolution) clearly 
indicate that it has a mission of purposefully addressing the social 
and/or economic needs of Low-Income individuals, individuals who lack 
adequate access to capital and/or financial services, distressed 
communities, and other underserved markets. An Affiliate of a 
Controlling CDFI, seeking to be certified as a CDFI (and therefore, 
approved to be an Eligible CDFI to participate in the CDFI Bond 
Guarantee Program), must demonstrate that it meets the primary mission 
requirement on its own merit, pursuant to the regulations and the CDFI 
Certification Application and related guidance materials posted on the 
CDFI Fund's website.
    b. Financing entity requirement (12 CFR 1805.201(b)(2)): To be a 
Certified CDFI, an entity must demonstrate that

[[Page 15854]]

its predominant business activity is the provision of Financial 
Products and Financial Services, Development Services, and/or other 
similar financing.
    i. On April 10, 2015, the CDFI Fund published a revision of 12 CFR 
1805.201(b)(2), the section of the CDFI certification regulation that 
governs the ``financing entity'' requirement. The regulatory change 
creates a means for the CDFI Fund, in its discretion, to deem an 
Affiliate (meaning, in this case, an entity that is Controlled by a 
CDFI; see 12 CFR 1805.104(b)) to have met the financing entity 
requirement based on the financing activity or track record of the 
Controlling CDFI (Control is defined in 12 CFR 1805.104(q)), solely for 
the purpose of participating in the CDFI Bond Guarantee Program as an 
Eligible CDFI. This change is key to the creation of an Alternative 
Financial Structure for the Bond Guarantee Program (see Section 
II(B)(2) of this NOGA for more information on the Alternative Financial 
Structure).
    In order for the Affiliate to rely on the Controlling CDFI's 
financing track record, (A) the Controlling CDFI must be a Certified 
CDFI; (B) there must be an operating agreement that includes management 
and ownership provisions in effect between the two entities (prior to 
the submission of a CDFI Certification Application and in form and 
substance that is acceptable to the CDFI Fund); and (C) the Affiliate 
must submit a complete CDFI Certification Application to the CDFI Fund 
no later than 11:59 p.m. ET on April 6, 2020 in order it to be 
considered for CDFI certification and participation in the FY 2020 
application round of the CDFI Bond Guarantee Program.
    This regulatory revision affects only the Affiliate's ability to 
meet the financing entity requirement for purposes of CDFI 
certification: Said Affiliate must meet the other certification 
criteria in accordance with the existing regulations governing CDFI 
certification.
    ii. The revised regulation also states that, solely for the purpose 
of participating in the CDFI Bond Guarantee Program, the Affiliate's 
provision of Financial Products and Financial Services, Development 
Services, and/or other similar financing transactions need not be arms-
length in nature if such transaction is by and between the Affiliate 
and Controlling CDFI, pursuant to an operating agreement that (a) 
includes management and ownership provisions, (b) is effective prior to 
the submission of a CDFI Certification Application, and (c) is in form 
and substance that is acceptable to the CDFI Fund.
    iii. An Affiliate whose CDFI certification is based on the 
financing activity or track record of a Controlling CDFI is not 
eligible to receive financial or technical assistance awards or tax 
credit allocations under any other CDFI Fund program until such time 
that the Affiliate meets the financing entity requirement based on its 
own activity or track record.
    iv. If an Affiliate elects to satisfy the financing entity 
requirement based on the financing activity or track record of a 
Controlling CDFI, and if the CDFI Fund approves such Affiliate as an 
Eligible CDFI for the sole purpose of participation in the CDFI Bond 
Guarantee Program, said Affiliate's CDFI certification will terminate 
if: (A) It does not enter into Bond Loan documents with its Qualified 
Issuer within one (1) year of the date that it signs the term sheet 
(which is an exhibit to the Agreement to Guarantee); (B) it ceases to 
be an Affiliate of the Controlling CDFI; or (C) it ceases to adhere to 
CDFI certification requirements.
    v. An Affiliate electing to satisfy the financing entity 
requirement based on the financing activity or track record of a 
Controlling CDFI need not have completed any financing activities prior 
to the date the CDFI Certification Application is submitted or 
approved. However, the Affiliate and the Controlling CDFI must have 
entered into the operating agreement described in (b)(i)(B) above, 
prior to such date, in form and substance that is acceptable to the 
CDFI Fund.
    c. Target Market requirement (12 CFR 1805.201(b)(3)): To be a 
Certified CDFI, an entity must serve at least one eligible Target 
Market (either an Investment Area or a Targeted Population) by 
directing at least 60% of all of its Financial Product activities to 
one or more eligible Target Market.
    i. Solely for the purpose of participation as an Eligible CDFI in 
the FY 2020 application round of the CDFI Bond Guarantee Program, an 
Affiliate of a Controlling CDFI may be deemed to meet the Target Market 
requirement by virtue of serving either:
    (A) An Investment Area through ``borrowers or investees'' that 
serve the Investment Area or provide significant benefits to its 
residents (pursuant to 12 CFR 1805.201(b)(3)(ii)(F)). For purposes of 
this NOGA, the term ``borrower'' or ``investee'' includes a borrower of 
a loan originated by the Controlling CDFI that has been transferred to 
the Affiliate as lender (which loan must meet Secondary Loan 
Requirements), pursuant to an operating agreement with the Affiliate 
that includes ownership/investment and management provisions, which 
agreement must be in effect prior to the submission of a CDFI 
Certification Application and in form and substance that is acceptable 
to the CDFI Fund. Loans originated by the Controlling CDFI do not need 
to be transferred prior to application submission; however, such loans 
must be transferred before certification of the Affiliate is effective. 
If an Affiliate has more than one Controlling CDFI, it may meet this 
Investment Area requirement through one or more of such Controlling 
CDFIs' Investment Areas; or
    (B) a Targeted Population ``indirectly or through borrowers or 
investees that directly serve or provide significant benefits to such 
members'' (pursuant to 12 CFR 1805.201(b)(3)(iii)(B)) if a loan 
originated by the Controlling CDFI has been transferred to the 
Affiliate as lender (which loan must meet Secondary Loan Requirements) 
and the Controlling CDFI's financing entity activities serve the 
Affiliate's Targeted Population pursuant to an operating agreement that 
includes ownership/investment and management provisions by and between 
the Affiliate and the Controlling CDFI, which agreement must be in 
effect prior to the submission of a CDFI Certification Application and 
in form and substance that is acceptable to the CDFI Fund. Loans 
originated by the Controlling CDFI do not need to be transferred prior 
to application submission; however, such loans must be transferred 
before certification of the Affiliate is effective. If an Affiliate has 
more than one Controlling CDFI, it may meet this Targeted Population 
requirement through one or more of such Controlling CDFIs' Targeted 
Populations.
    An Affiliate that meets the Target Market requirement through 
paragraphs (ii) (A) or (B) above, is not eligible to receive financial 
or technical assistance awards or tax credit allocations under any 
other CDFI Fund program until such time that the Affiliate meets the 
Target Market requirements based on its own activity or track record.
    ii. If an Affiliate elects to satisfy the target market requirement 
based on paragraphs (c)(ii)(A) or (B) above, the Affiliate and the 
Controlling CDFI must have entered into the operating agreement as 
described above, prior to the date that the CDFI Certification 
Application is submitted, in form and substance that is acceptable to 
the CDFI Fund.
    d. Development Services requirement (12 CFR 1805.201(b)(4)): To be 
a Certified CDFI, an entity must provide Development Services in 
conjunction with its Financial Products. Solely for the purpose of 
participation as an

[[Page 15855]]

Eligible CDFI in the FY 2020 application round of the CDFI Bond 
Guarantee Program, an Affiliate of a Controlling CDFI may be deemed to 
meet this requirement if: (i) Its Development Services are provided by 
the Controlling CDFI pursuant to an operating agreement that includes 
management and ownership provisions with the Controlling CDFI that is 
effective prior to the submission of a CDFI Certification Application 
and in form and substance that is acceptable to the CDFI Fund and (ii) 
the Controlling CDFI must have provided Development Services in 
conjunction with the transactions that the Affiliate is likely to 
purchase, prior to the date of submission of the CDFI Certification 
Application.
    e. Accountability requirement (12 CFR 1805.201(b)(5)): To be a 
Certified CDFI, an entity must maintain accountability to residents of 
its Investment Area or Targeted Population through representation on 
its governing board and/or advisory board(s), or through focus groups, 
community meetings, and/or customer surveys. Solely for the purpose of 
participation as an Eligible CDFI in the FY 2020 application round of 
the CDFI Bond Guarantee Program, an Affiliate of a Controlling CDFI may 
be deemed to meet this requirement only if it has a governing board 
and/or advisory board that has the same composition as the Controlling 
CDFI and such governing board or advisory board has convened and/or 
conducted Affiliate business prior to the date of submission of the 
CDFI Certification Application. If an Affiliate has multiple 
Controlling CDFIs, the governing board and/or advisory board may have a 
mixture of representatives from each Controlling CDFI so long as there 
is at least one representative from each Controlling CDFI.
    f. Non-government entity requirement (12 CFR 1805.201(b)(6)): To be 
a Certified CDFI, an entity can neither be a government entity nor be 
controlled by one or more governmental entities.
    g. For the FY 2020 application round of the CDFI Bond Guarantee 
Program, only one Affiliate per Controlling CDFI may participate as an 
Eligible CDFI. However, there may be more than one Affiliate 
participating as an Eligible CDFI in any given Bond Issue.
    3. Operating agreement: An operating agreement between an Affiliate 
and its Controlling CDFI, as described above, must provide, in addition 
to the elements set forth above, among other items: (i) Conclusory 
evidence that the Controlling CDFI Controls the Affiliate, through 
investment and/or ownership; (ii) explanation of all roles, 
responsibilities and activities to be performed by the Controlling CDFI 
including, but not limited to, governance, financial management, loan 
underwriting and origination, record- keeping, insurance, treasury 
services, human resources and staffing, legal counsel, dispositions, 
marketing, general administration, and financial reporting; (iii) 
compensation arrangements; (iv) the term and termination provisions; 
(v) indemnification provisions, if applicable; (vi) management and 
ownership provisions; and (vii) default and recourse provisions.
    4. For more detailed information on CDFI certification 
requirements, please review the CDFI certification regulation (12 CFR 
1805.201, as revised on April 10, 2015) and CDFI Certification 
Application materials/guidance posted on the CDFI Fund's website. 
Interested parties should note that there are specific regulations and 
requirements that apply to Depository Institution Holding Companies, 
Insured Depository Institutions, Insured Credit Unions, and State-
Insured Credit Unions.
    5. Uncertified entities, including an Affiliate of a Controlling 
CDFI, that wish to apply to be certified and designated as an Eligible 
CDFI in the FY 2020 application round of the CDFI Bond Guarantee 
Program must submit a CDFI Certification Application to the CDFI Fund 
by 11:59 p.m. ET on April 6, 2020. Any CDFI Certification Application 
received after such date and time, as well as incomplete applications 
that are not amended by the deadline, will not be considered for the FY 
2020 application round of the CDFI Bond Guarantee Program.
    6. In no event will the Secretary approve a Guarantee for a Bond 
from which a Bond Loan will be made to an entity that is not an 
Eligible CDFI. The Secretary must make FY 2020 Guarantee Application 
decisions, and the CDFI Fund must close the corresponding Bonds and 
Bond Loans, prior to the end of FY 2020 (September 30, 2020). 
Accordingly, it is essential that CDFI Certification Applications are 
submitted timely and in complete form, with all materials and 
information needed for the CDFI Fund to make a certification decision. 
Information on CDFI certification, the CDFI Certification Application, 
and application submission instructions may be found on the CDFI Fund's 
website at www.cdfifund.gov.
    B. Recourse and Collateral Requirements.
    1. General Recourse Structure. Under the general recourse 
structure, the Bond is a nonrecourse obligation to the Qualified 
Issuer, and the Bond Loan is a full general recourse obligation to the 
Eligible CDFI. For all Asset Classes except CDFI to Financing Entity 
utilizing pooled tertiary loans, the Bond Loan Collateral Requirements 
are as follows: Each Bond Loan must be secured at all times by 
Secondary Loans, and/or cash collateral pledged by the Eligible CDFI in 
the amount of 110% of the unpaid principal balance of the Bond Loan. In 
addition, each Bond Loan must either receive Third Party Support or 
provide additional pledged collateral in the form of Secondary Loans, 
and/or cash collateral to secure the underlying Bond Loan in an amount 
ranging from 1% to 10% of the unpaid principal balance of the Bond 
Loan. Therefore, the total collateralization for each Bond Loan plus 
Third Party Support will range from 111% to 120%. Some portion of the 
Third Party Support must be cash collateral or other pledged assets/
property as determined by the CDFI Fund, the remaining portion of the 
Third Party Support may be a Principal Loss Collateral Provision in the 
form of a guarantee, letter of credit, or similar instrument in 
accordance with the Secondary Loan Requirements. The actual percentage 
of required Third Party Support will be determined by the CDFI Fund 
during Guarantee Application review; however, all applicants should be 
prepared to provide Third Party Support in an amount up to 10% of the 
unpaid principal balance of the Bond Loan. All collateral pledged under 
the BG Program, including Third Party Support, must conform to the BG 
Program Secondary Loan Requirements. Overcollateralization requirements 
for the asset class CDFI to Financing Entity utilizing pooled tertiary 
loans remains 125% of the unpaid principal balance of the underlying 
Secondary Loan as delineated in the template term sheet located on the 
CDFI Fund website at https://www.cdfifund.gov/programs-training/Programs/cdfi-bond/Pages/apply-step.aspx#step2.
    2. Alternative Financial Structure. An Alternative Financial 
Structure (AFS) can be used as a limited recourse option to a 
Controlling CDFI or group of Controlling CDFIs. The AFS is an Affiliate 
of a Controlling CDFI(s) that is created for the sole purpose of 
participation as an Eligible CDFI in the CDFI Bond Guarantee Program. 
The AFS must be an Affiliate of a Controlling CDFI(s) and must be 
certified as a CDFI in accordance with the requirements set forth in 
Section II(A) of this NOGA. The AFS, as the Eligible CDFI, provides a 
general full

[[Page 15856]]

recourse obligation to repay the Bond Loan, and the Bond Loan is on the 
balance sheet of the AFS. The overcollateralization requirements for 
the AFS is 120% in addition to other required capital support as 
delineated in the template term sheet located on the CDFI Fund website 
at https://www.cdfifund.gov/programs-training/Programs/cdfi-bond/Pages/apply-step.aspx#step2.
    C. Application Submission.
    1. Electronic submission. All Qualified Issuer Applications and 
Guarantee Applications must be submitted through the CDFI Fund's Awards 
Management Information System (AMIS). Applications sent by mail, fax, 
or other form will not be 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. For more 
information on AMIS, please visit the AMIS Landing Page at https://amis.cdfifund.gov.
    2. Applicant identifier numbers. Please note that, pursuant to 
Office of Management and Budget (OMB) guidance (68 FR 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 CDFI 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). Registration 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 SAM 
registration process may take one month or longer to complete. A signed 
notarized letter identifying the SAM authorized entity administrator 
for the entity associated with the DUNS number is required. This 
requirement is applicable to new entities registering in SAM, as well 
as to existing entities with registrations being updated or renewed in 
SAM. Applicants without DUNS and/or EIN numbers should allow for 
additional time as an applicant cannot register in SAM without those 
required numbers. Applicants that have previously completed the SAM 
registration process must verify that their SAM accounts are current 
and active. Each applicant must continue to maintain an active SAM 
registration with current information at all times during which it has 
an active Federal award or an Application under consideration by a 
Federal awarding agency. The CDFI Fund will not consider any applicant 
that fails to properly register or activate its SAM account and these 
restrictions also apply to organizations that have not yet received a 
DUNS or EIN number. Applicants must contact SAM directly with questions 
related to registration or SAM account changes as the CDFI Fund does 
not maintain this system and has no ability to make changes or correct 
errors of any kind. For more information about SAM, visit https://www.sam.gov.
    4. AMIS 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 AMIS. Each 
such entity must be registered as an Organization and register at least 
one User Account in AMIS. As AMIS 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 
AMIS account before any Application is submitted. For more information 
on AMIS, please visit the AMIS Landing Page at https://amis.cdfifund.gov.
    D. Form of Application.
    1. As of the date of this NOGA, the Qualified Issuer Application, 
the Guarantee Application, and related application instructions may be 
found on the CDFI Bond Guarantee Program's page on the CDFI Fund's 
website at https://www.cdfifund.gov/bond.
    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 2020 program authority, Qualified 
Issuer Applications must be submitted by 11:59 p.m. ET on May 11, 2020, 
and Guarantee Applications must be submitted by 11:59 p.m. ET on May 
18, 2020. Qualified Issuer Applications and Guarantee Applications 
received in FY 2019 that were neither withdrawn nor declined will be 
considered under FY 2020 authority. If applicable, CDFI Certification 
Applications must be received by the CDFI Fund by 11:59 p.m. ET on 
April 6, 2020.
    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 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

[[Page 15857]]

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.
    E. 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, 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 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 and/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.
    F. 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 consider financial 
safety and soundness information from the Appropriate Federal Banking 
Agency. Each regulated applicant must have a composite CAMELS/CAMEL 
rating of at least ``3'' and/or no material concerns from its 
regulator. The CDFI Fund also reserves the right to require a regulated 
applicant to improve safety and soundness conditions prior to being 
approved as a Qualified Issuer or Eligible CDFI. In addition, the CDFI 
Fund will take into consideration Community Reinvestment Act 
assessments of Insured Depository Institutions and/or their Affiliates.
    G. Prior CDFI Fund recipients. All applicants must be aware that 
success under any of the CDFI Fund's other programs is not indicative 
of success under this NOGA. Prior CDFI Fund recipients should note the 
following:
    1. 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 recipient or allocatee 
under any CDFI Fund program and (i) it has submitted 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 noncompliant with 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.
    2. Previous findings 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 recipient or allocatee 
under any CDFI Fund program and the CDFI Fund has made a final 
determination that the entity is noncompliant with a previously 
executed agreement with the CDFI Fund, but has not notified the entity 
that it is ineligible to apply for future CDFI Fund program awards or 
allocations, the CDFI Fund will consider the Qualified Issuer 
Application or Guarantee Application. However, it is strongly advised 
that the entity take action to address such noncompliance finding, as 
repeat findings of noncompliance may result in the CDFI Fund 
determining the entity ineligible to participate in future CDFI Fund 
program rounds, which could result in any pending applications being 
deemed ineligible for further review. The CDFI Bond Guarantee Program 
staff cannot resolve compliance matters; instead, please contact the 
CDFI Fund's Office of Certification, Compliance Monitoring and 
Evaluation Unit (CCME) if your organization has questions about its 
current compliance status or has been found not in compliance with a 
previously executed agreement with the CDFI Fund.
    3. Ineligibility due to noncompliance. 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 recipient or allocatee 
under any CDFI Fund program and 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 noncompliant with a previously 
executed agreement and (ii) the CDFI Fund has provided written 
notification that such entity is ineligible to apply for any future 
CDFI Fund program awards or allocations. Such entities will be 
ineligible to submit a Qualified Issuer or Guarantee Application, or be 
included in such submission, as the case may be, for such time period 
as specified by the CDFI Fund in writing.
    H. Review of Bond and Bond Loan documents. Each Qualified Issuer 
and proposed Eligible CDFI will be required to certify that its 
appropriate senior management, and its respective legal counsel, has 
read the Regulations (set forth at 12 CFR part 1808, as well as the 
CDFI certification regulations set forth at 12 CFR 1805.201, as 
amended, and the environmental quality regulations set forth at 12 CFR 
part 1815) and the template Bond Documents and Bond Loan documents 
posted on the CDFI Fund's website including, but not limited to, the 
following: Bond Trust Indenture, Supplemental Indenture, Bond Loan 
Agreement, Promissory Note, Bond Purchase Agreement, Designation 
Notice, Secretary's Guarantee, Collateral Assignment, Reimbursement 
Note, Opinion of Bond Counsel, Opinion of Counsel to the Borrower, 
Escrow Agreement, and Closing Checklist.
    I. 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 recipients 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

[[Page 15858]]

unsure about the disbursement status of any prior award should submit a 
Service Request through that organization's AMIS Account.
    All outstanding reporting and compliance questions should be 
directed to the Office of Certification, Compliance Monitoring and 
Evaluation help desk by AMIS Service Requests 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.
    J. 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 the entity's compliance 
history with the CDFI Fund, including any 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 three years prior to the date of publication 
of this NOGA 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, including, 
but not limited, to discrimination under (i) Title VI of the Civil 
Rights Act of 1964 (Pub. L. 88-352) which prohibits discrimination on 
the basis of race, color or national origin; (ii) Title IX of the 
Education Amendments of 1972, as amended (20 U.S.C. 1681-1683, 1685-
1686), which prohibits discrimination on the basis of sex; (iii) 
Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 
794), which prohibits discrimination on the basis of handicaps;
    (iv) the Age Discrimination Act of 1975, as amended (42 U.S.C. 
6101-6107), which prohibits discrimination on the basis of age; (v) the 
Drug Abuse Office and Treatment Act of 1972 (Pub. L. 92-255), as 
amended, relating to nondiscrimination on the basis of drug abuse; (vi) 
the Comprehensive Alcohol Abuse and Alcoholism Prevention, Treatment 
and Rehabilitation Act of 1970 (Pub. L. 91-616), as amended, relating 
to nondiscrimination on the basis of alcohol abuse or alcoholism; (vii) 
Sections 523 and 527 of the Public Health Service Act of 1912 (42 
U.S.C. 290 dd-3 and 290 ee-3), as amended, relating to confidentiality 
of alcohol and drug abuse patient records; (viii) Title VIII of the 
Civil Rights Act of 1968 (42 U.S.C. 3601 et seq.), as amended, relating 
to nondiscrimination in the sale, rental or financing of housing; (ix) 
any other nondiscrimination provisions in the specific statute(s) under 
which Federal assistance is being made; and (x) the requirements of any 
other nondiscrimination statutes which may apply to the CDFI Bond 
Guarantee Program.
    K. Civil Rights and Diversity. Any person who is eligible to 
receive benefits or services from the CDFI Fund or Recipients under any 
of its programs is entitled to those benefits or services without being 
subject to prohibited discrimination. The Department of the Treasury's 
Office of Civil Rights and Diversity enforces various Federal statutes 
and regulations that prohibit discrimination in financially assisted 
and conducted programs and activities of the CDFI Fund. If a person 
believes that s/he has been subjected to discrimination and/or reprisal 
because of membership in a protected group, s/he may file a complaint 
with: Associate Chief Human Capital Officer, Office of Civil Rights, 
and Diversity, 1500 Pennsylvania Ave. NW, Washington, DC 20220 or (202) 
622-1160 (not a toll-free number).
    L. Statutory and national policy requirements. The CDFI Fund will 
manage and administer the Federal award in a manner so as to ensure 
that Federal funding is expended and associated programs are 
implemented in full accordance with the U.S. Constitution, Federal Law, 
statutory, and public policy requirements: Including, but not limited 
to, those protecting free speech, religious liberty, public welfare, 
the environment, and prohibiting discrimination.
    M. 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 website.
    N. 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, in its sole discretion.

II. 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 
an 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 financing or 
refinancing 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. Further, the role of the Qualified Issuer 
also is to ensure that its proposed Eligible CDFI applicants possess 
adequate and well performing assets to support the debt service of the 
proposed Bond Loan.
    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.

[[Page 15859]]

    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. The Applicant must currently meet the 
criteria established in the Regulations to be deemed a Qualified 
Issuer. Qualified Issuer Applications that are forward-looking or 
speculate as to the eventual acquisition of the required capabilities 
and criteria are unlikely to be approved. Qualified Issuer Application 
processing will be initiated in chronological order by date of receipt; 
however, Qualified Issuer Applications that are incomplete or require 
the CDFI Fund to request additional or clarifying information may delay 
the ability of the CDFI Fund to deem the Qualified Issuer Application 
complete and move it to the next phase of review. Submitting a 
substantially incomplete application earlier than other applicants does 
not ensure first approval.
    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. A 
Qualified Issuer may not designate itself. 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 CDFI Bond Guarantee Program policies.
    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. In total, there are more than 60 
individual criteria or sub-criteria used to evaluate a Qualified Issuer 
applicant and all materials provided in the Qualified Issuer 
Application will be used to evaluate the applicant. 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, or is otherwise qualified to serve 
as Qualified Issuer, 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, experience, and qualifications 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, experience, and qualifications 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, experience, and 
qualifications, 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, capacity, 
experience, and qualifications 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, 
experience, and qualifications, 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, capacity, experience, and 
qualifications 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 CDFI Bond Guarantee 
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 issuing bonds, 
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.

[[Page 15860]]

    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, underwrite, close, and disburse loans in a prudent manner; 
(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 to help ensure 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. The CDFI Fund may request an on-site review of 
Qualified Issuer applicant to confirm materials provided in the written 
application, as well as to gather additional due diligence information. 
The on-site reviews are a critical component of the application review 
process and will generally be conducted for all applicants not 
regulated by an Appropriate Federal Banking Agency or Appropriate State 
Agency. The CDFI Fund reserves the right to conduct a site visit of 
regulated entities, in its sole discretion.
    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 AMIS 
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.

III. 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 CDFI(s) 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 CDFI Bond Guarantee Program 
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. An Eligible CDFI may be an 
existing certified or certifiable CDFI (the General Recourse Financial 
Structure), or the Eligible CDFI may be an Affiliate of a Controlling 
CDFI(s) that is created for the sole purpose of participation as an 
Eligible CDFI in the CDFI Fund Bond Guarantee Program (the Alternative 
Financial Structure; see Section II(B) of this NOGA for Recourse and 
Collateral Requirements and Section II(A) of this NOGA for 
certification requirements for certifiable CDFIs and Affiliates of 
Controlling CDFIs).
    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

[[Page 15861]]

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. Eligible 
CDFIs must currently meet the criteria established in the Regulations 
to participate in the CDFI Bond Guarantee Program. Guarantee 
Applications that are forward-looking or speculate as to the eventual 
acquisition of the required capabilities and criteria by the Eligible 
CDFI(s) are unlikely to be approved. Guarantee Application processing 
will be initiated in chronological order by date of receipt; however, 
Guarantee Applications that are incomplete or require the CDFI Fund to 
request additional or clarifying information may delay the ability of 
the CDFI Fund to deem the Guarantee Application complete and move it to 
the next phase of review. Submitting a substantially incomplete 
application earlier than other applicants does not ensure first 
approval.
    B. Guarantee Application: eligibility.
    1. Eligibility; CDFI certification requirements. 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 and the certification of affiliated entities, 
including the deadlines for submission of certification applications, 
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 financed or 
refinanced in accordance with 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; however, the Bond Issue 
must then cumulatively meet all requirements for Guarantee approval. In 
general, applicants are advised that proposed Bond Issues that include 
a large number of proposed Eligible CDFIs are likely to substantially 
increase the review period.
    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 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. Guarantee Applications must demonstrate that 
each proposed Eligible CDFI has the capacity for its respective Bond 
Loan to be a secured, general recourse obligation of the proposed 
Eligible CDFI and to deploy the Bond Loan proceeds within the required 
disbursement timeframe as described in the Regulations. Unless 
receiving significant support from a Controlling CDFI, or Credit 
Enhancements, Eligible CDFIs should not request Bond Loans greater than 
their current total asset size or which would otherwise significantly 
impair their net asset or net equity position. In general, an applicant 
requesting a Bond Loan more than 50% of its total asset size should be 
prepared to clearly demonstrate that it has a reasonable plan to scale 
its operations prudently and in a manner that does not impair its net 
asset or net equity position. Further, an entity with a limited 
operating history or a history of operating losses is unlikely to meet 
the strength and feasibility requirements of the CDFI Bond Guarantee 
Program, unless it receives significant support from a Controlling 
CDFI, or Credit Enhancements.
    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 CFR1808.102(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% of the principal amount 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

[[Page 15862]]

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. Such information must 
describe the expected distribution of asset classes to which each 
Eligible CDFI expects to disburse funds, the proposed disbursement 
schedule, quarterly or semi-annual amortization schedules, interest-
only periods, maturity date of each advance of funds, and assumed net 
interest margin on Secondary Loans above the assumed Bond Loan rate;
    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. 
For any third-party providing a Credit Enhancement, the Qualified 
Issuer must provide the following information on the third-party: Most 
recent three years of audited financial statements, a brief analysis of 
the such entity's creditworthiness, and an executed letter of intent 
from such entity that indicates the terms and conditions of the Credit 
Enhancement. Any Credit Enhancement must be pledged, as part of the 
Trust Estate, to the Master Servicer/Trustee for the benefit of the 
Federal Financing Bank;
    v. Proposed Term Sheets: The CDFI Fund website includes template 
term sheets for General Recourse Structure, the Alternative Financial 
Structure, and the asset class CDFI to Financing Entity utilizing 
pooled tertiary loans. For each Eligible CDFI that is part of the 
proposed Bond Issue, the Qualified Issuer must submit a proposed Term 
Sheet using the applicable template provided on the CDFI Fund's 
website. The proposed Term Sheet must clearly state all relevant and 
critical terms of the proposed Bond Loan including, but not limited to: 
The Bond Loan Collateral Requirements described in Section II(B) of 
this NOGA, any requested prepayment provisions, unique conditions 
precedent, proposed covenants and exact amounts/percentages for 
determining the Eligible CDFI's ability to meet program requirements, 
and terms and exact language describing any Credit Enhancements. Terms 
may be either altered and/or negotiated by the CDFI Fund in its sole 
discretion, based on the proposed structure in the application, to 
ensure that adequate protection is in place for the Guarantor;
    vi. Secondary Capital Distribution Plan(s): Each proposed Eligible 
CDFI must provide a comprehensive plan for financing, disbursing, 
servicing and monitoring Secondary Loans, address how each proposed 
Secondary Loan will meet Eligible Purposes, and address such other 
requirements listed below that may be required by the Guarantor and the 
CDFI Fund. For each proposed Eligible CDFI relying, for CDFI 
certification purposes, on the financing entity activity of a 
Controlling CDFI, the Controlling CDFI must describe how the Eligible 
CDFI and the Controlling CDFI, together, will meet the requirements 
listed below:
    (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 1% of the Bond Loan, 
and (iii) finance Loan Loss Reserves related to Secondary Loans; (2) 
attest that 100% of Bond Loan proceeds designated for Secondary Loans 
will be used to finance or refinance Secondary Loans that meet 
Secondary Loan Requirements; (3) describe a plan for financing, 
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, especially with regards 
to the number and dollar volume of loans made in the five years prior 
to application submission to the specific asset classes to which an 
Eligible CDFI is proposing to lend Bond Loan proceeds; (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. Such 
information must describe: The expected distribution of asset classes 
to which each Eligible CDFI expects to disburse funds, the proposed 
disbursement schedule, quarterly or semi-annual amortization schedules, 
interest-only periods, maturity date of each advance of funds, and the 
assumed net interest margin on Secondary Loans above the assumed Bond 
Loan rate;
    (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 a chart of affiliates; (2) organizational documents, including 
policies and procedures related to loan underwriting and asset 
management; (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 
relevant policies and procedures including, but not limited to: A copy 
of the asset-liability matching policy, if applicable; and loan 
policies and procedures which address topics including, but not limited 
to: Origination, underwriting, credit approval, interest rates, 
closing, documentation, asset management, and portfolio monitoring, 
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) Audited financial 
statements for the prior three (3) most recent Fiscal Years; (2) 
current year-to-date or interim financial statement for the immediately 
prior quarter end of the Fiscal Year; (3) a copy of the current

[[Page 15863]]

year's approved budget or projected budget if the entity's Board has 
not yet approved such budget; and (4) a three (3) year pro forma 
projection of the statement of financial position or balance sheet, 
statement of activities or income statement, and statement of cash 
flows in the standardized template provided by the CDFI Fund;
    (F) Loan portfolio information: Each Eligible CDFI must provide 
information including, but not limited to: (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.
    vii. Assurances and certifications that not less than 100% 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
    viii. Such other information that the Guarantor, the CDFI Fund and/
or the Bond Purchaser may deem necessary and appropriate.
    c. The CDFI Fund will use the information described in the Capital 
Distribution Plan and Secondary Capital Distribution Plan(s) to 
evaluate the feasibility of the proposed Bond Issue, with specific 
attention paid to each Eligible CDFI's financial strength and 
organizational capacity. For each proposed Eligible CDFI relying, for 
CDFI certification purposes, on the financing entity activity of a 
Controlling CDFI, the CDFI Fund will pay specific attention to the 
Controlling CDFI's financial strength and organizational capacity as 
well as the operating agreement between the proposed Eligible CDFI and 
the Controlling CDFI. All materials provided in the Guarantee 
Application will be used to evaluate the proposed Bond Issue. In total, 
there are more than 100 individual criteria or sub-criteria used to 
evaluate each Eligible CDFI. Specific criteria used to evaluate each 
Eligible CDFI shall include, but not be limited to, the following 
criteria below. For each proposed Eligible CDFI relying, for CDFI 
certification purposes, on the financing entity activity of a 
Controlling CDFI, the following specific criteria will also be used to 
evaluate both the proposed Eligible CDFI and the Controlling CDFI:
    i. Historical financial ratios: Ratios which together have been 
shown to be predictive of possible future default will be used as an 
initial screening tool, including total asset size, net asset or Tier 1 
Core Capital ratio, self-sufficiency ratio, non-performing asset ratio, 
liquidity ratio, reserve over nonperforming assets, and yield cost 
spread;
    ii. Quantitative and qualitative attributes under the ``CAMELS'' 
framework: After initial screening, the CDFI Fund will utilize a more 
detailed analysis under the ``CAMELS'' framework, including but not 
limited to:
    (A) Capital Adequacy: Attributes such as the debt-to-equity ratio, 
status, and significance of off-balance sheet liabilities or 
contingencies, magnitude, and consistency of cash flow performance, 
exposure to affiliates for financial and operating support, trends in 
changes to capitalization, and other relevant attributes;
    (B) Asset Quality: Attributes such as the charge-off ratio, 
adequacy of loan loss reserves, sector concentration, borrower 
concentration, asset composition, security and collateralization of the 
loan portfolio, trends in changes to asset quality, and other relevant 
attributes;
    (C) Management: Attributes such as documented best practices in 
governance, strategic planning and board involvement, robust policies 
and procedures, tenured and experienced management team, organizational 
stability, infrastructure and information technology systems, and other 
relevant attributes;
    (D) Earnings and Performance: Attributes such as net operating 
margins, deployment of funds, self-sufficiency, trends in earnings, and 
other relevant attributes;
    (E) Liquidity: Attributes such as unrestricted cash and cash 
equivalents, ability to access credit facilities, access to grant 
funding, covenant compliance, affiliate relationships, concentration of 
funding sources, trends in liquidity, and other relevant attributes;
    (F) Sensitivity: The CDFI Fund will stress test each Eligible 
CDFI's projected financial performance under scenarios that are 
specific to the unique circumstance and attributes of the organization. 
Additionally, the CDFI Fund will consider other relevant criteria that 
have not been adequately captured in the preceding steps as part of the 
due diligence process. Such criteria may include, but not be limited 
to, the size and quality of any third-party Credit Enhancements or 
other forms of credit support.
    (G) Overcollateralization: The commitment by an Eligible CDFI to 
over- collateralize a proposed Bond Loan with excess Secondary Loans is 
a criterion that may affect the viability of a Guarantee Application by 
decreasing the estimated net present value of the long-term cost of the 
Guarantee to the Federal Government, by decreasing the probability of 
default, and/or increasing the recovery rate in the event of default. 
An Eligible CDFI committing to overcollateralization may not be 
required to deposit funds in the Relending Account, subject to the 
maintenance of certain unique requirements that are detailed in the 
template Agreement to Guarantee and Bond Loan Agreement.
    (H) Credit Enhancements: The provision of third-party Credit 
Enhancements, including any Credit Enhancement from a Controlling CDFI 
or any other affiliated entity, is a criterion that may affect the 
viability of a Guarantee Application by decreasing the estimated net 
present value of the long-term cost of the Guarantee to the Federal 
Government. Credit Enhancements are considered in the context of the 
structure and circumstances of each Guarantee Application.
    (I) On-Site Review: The CDFI Fund may request an on-site review of 
an Eligible CDFI to confirm materials provided in the written 
application, as well as to gather additional due diligence information. 
The on-site reviews are a critical component of the application review 
process and will generally be conducted for all applicants not 
regulated by an Appropriate Federal Banking Agency or Appropriate State 
Agency. The CDFI Fund reserves the right to conduct a site visit of 
regulated entities, in its sole discretion.
    (J) Secondary Loan Asset Classes: Eligible CDFIs that propose to 
use funds for new products or lines of business must demonstrate that 
they have the organizational capacity to manage such activities in a 
prudent manner. Failure to demonstrate such organizational capacity may 
be factored into the consideration of Asset Quality or Management 
criteria as listed above in this section.
    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).

[[Page 15864]]

Treasury has not received appropriated amounts from Congress to cover 
the credit subsidy costs associated with the 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; Execution of documents.
    1. The Guarantor, in the Guarantor's sole discretion, may approve a 
Guarantee, after 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 was 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 any Guarantees in an amount that is less 
than requested in the corresponding 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. Bond 
Documents and Bond Loan documents must be executed, 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, in its sole 
discretion, and in any event by September 30, 2020.
    4. Please note that the most recently dated templates of Bond 
Documents and Bond Loan documents that are posted on the CDFI Fund's 
website will not be substantially revised or negotiated prior to 
closing of the Bond and Bond Loan and issuance of the corresponding 
Guarantee. If a Qualified Issuer or a proposed Eligible CDFI does not 
understand the terms and conditions of the Bond Documents or Bond Loan 
documents (including those listed in Section II.G., above), it should 
ask questions or seek technical assistance from the CDFI Fund. However, 
if a Qualified Issuer or a proposed Eligible CDFI disagrees or is 
uncomfortable with any term/condition, or if legal counsel to either 
cannot provide a legal opinion in substantially the same form and 
content of the required legal opinion, it should not apply for a 
Guarantee.
    5. 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, after 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 any 
administrative error) 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.

IV. 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). As informed by CDFI 
Fund underwriting according to the criteria laid out in Section II 
``General Application Information'' and Section IV ``Guarantee 
Applications'' of this NOGA, 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 1/8th 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 monthly to the CDFI Fund by
                                     the Eligible CDFI Equal to 10 basis
                                     points (annualized) 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. Fees negotiated
                                     between the Qualified Issuer, the
                                     Master Servicer/Trustee, and the
                                     Eligible CDFI. Up of 1% of Bond
                                     Loan Proceeds may be used to
                                     finance Bond Issuance Fees.
Servicer Fee......................  The fees paid by the Eligible CDFI
                                     to the Qualified Issuer's Servicer.
                                     Servicer fees are 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 are 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. In general,
                                     the Master Servicer/Trustee fee for
                                     a Bond Issue with a single Eligible
                                     CDFI is the greater of 16 basis
                                     points per annum or $6,000 per
                                     month once the Bond Loans are fully
                                     disbursed. Fees for Bond Issues
                                     with more than one Eligible CDFI
                                     are negotiated between the Master
                                     Servicer/Trustee, Qualified Issuer,
                                     and Eligible CDFI. Any special
                                     servicing costs and resolution or
                                     liquidation fees due to a Bond Loan
                                     default are the responsibility of
                                     the Eligible CDFI. Please see the
                                     template legal documents at https://www.cdfifund.gov/programs-training/Programs/cdfi-bond/Pages/closing-disbursement-step.aspx#step4 for
                                     more specific information.
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 Loan
                                     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.

[[Page 15865]]

 
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. Credit Enhancements must be
                                     pledged, as part of the Trust
                                     Estate, to the Master Servicer/
                                     Trustee for the benefit of the
                                     Federal Financing Bank.
------------------------------------------------------------------------

    C. Terms for Bond Issuance and disbursement of Bond Proceeds. 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 no less than 100% 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 is in compliance with the 100% requirement above.
    D. Secondary Loan Requirements. In accordance with the Regulations, 
Eligible CDFIs must finance or refinance Secondary Loans for Eligible 
Purposes (not including loan loss reserves) that comply with Secondary 
Loan Requirements. The Secondary Loan Requirements are found on the 
CDFI Fund's website 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 to a 
Secondary Loan commitment process managed by the Qualified Issuer.
    Eligible CDFIs must execute Secondary Loan documents (in the form 
of promissory notes) with Secondary Borrowers as follows: (i) No later 
than 12 months after the Bond Issue Date, Secondary Loan documents 
representing at least 50% of the Bond Loan proceeds allocated for 
Secondary Loans, and (ii) no later than 24 months after the Bond Issue 
Date, Secondary Loan documents representing 100% of the Bond Loan 
proceeds allocated for Secondary Loans. In the event that the Eligible 
CDFI does not comply with the foregoing requirements of clauses (i) or 
(ii) of this paragraph, the available Bond Loan proceeds at the end of 
the applicable period shall be reduced by an amount equal to the 
difference between the amount required by clauses (i) or (ii) for the 
applicable period minus the amount previously committed to the 
Secondary Loans in the applicable period. Secondary Loans shall carry 
loan maturities suitable to the loan purpose and be 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 interest rates for the Secondary Loans 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), 
leasehold mortgages, 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 and intellectual property rights, are not acceptable 
forms of collateral. Loans secured by real property that are still in a 
construction phase will only be permitted when backed by a letter of 
credit issued by a bank deemed acceptable by the Bond Guarantee 
Program, in a format deemed acceptable to the Bond Guarantee Program, 
that guarantees the full value of the pledged collateral until at 
minimum completion of the construction and stabilization phases.
    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) and the Secondary Loan 
Requirements.
    4. Independent third-party appraisals are required for the 
following collateral: Real estate, leasehold interests, fixtures, 
machinery and equipment, movables stock valued in excess of $250,000, 
and 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 Bond Loans to 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. Any Credit Enhancement 
or Principal Loss Collateral Provision must be pledged, as part of the 
Trust Estate, to the Master Servicer/Trustee for the benefit of the 
Federal Financing Bank.
    2. Credit Enhancements may include, but are not limited to, payment 
guarantees from third parties or Affiliate(s), non-Federal capital, 
lines or letters of credit, or other pledges of financial resources 
that enhance the Eligible CDFI's ability to make timely

[[Page 15866]]

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/or in 
addition to pledged collateral. A Principal Loss Collateral Provision 
shall be in the form of cash or cash equivalent guarantees from non-
Federal capital 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. The information provided must include 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.
    7. In the event that the Eligible CDFI proposes to use other 
Federal funds to service Bond Loan debt or as a Credit Enhancement, the 
CDFI Fund may require, in its sole discretion, that the Eligible CDFI 
provide written assurance from such other Federal program, in a form 
that is acceptable to the CDFI Fund and that the CDFI Fund may rely 
upon, that said use is permissible.
    H. Reporting requirements.
    1. Reports.
    a. General. As required pursuant to the Regulations at 12 CFR 
1808.619, and as set forth in the Bond Documents and the Bond Loan 
documents, the CDFI Fund will collect information from each Qualified 
Issuer which may include, but will not be limited to: (i) Quarterly and 
annual financial reports and data (including an OMB single audit, as 
applicable) for the purpose of monitoring the financial health, ratios 
and covenants of Eligible CDFIs that include asset quality 
(nonperforming assets, loan loss reserves, and net charge-off ratios), 
liquidity (current 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 and Bond 
Loan documents; (iii) Master Servicer/Trustee summary of program 
accounts and transactions for each Bond Issue; (iv) Secondary Loan 
certifications describing Eligible CDFI lending, collateral valuation, 
and eligibility; (v) financial data on Secondary Loans to monitor 
underlying collateral, gauge overall risk exposure across asset 
classes, and assess loan performance, quality, and payment history; 
(vi) annual certifications of compliance with program requirements; 
(vii) material event disclosures including any reports of Eligible CDFI 
management and/or organizational changes; (viii) annual updates to the 
Capital Distribution Plan (as described below); (ix) supplements and/or 
clarifications to correct reporting errors (as applicable); (x) project 
level reports to understand overall program impact and the manner in 
which Bond Proceeds are deployed for Eligible Community or Economic 
Development Purposes; and (xi) such other information that the CDFI 
Fund and/or the Bond Purchaser may require, including but not limited 
to racial and ethnic data showing the extent to which members of 
minority groups are beneficiaries of the CDFI Bond Guarantee Program, 
to the extent permissible by law.
    b. Additional reporting by Qualified Issuers. A Qualified Issuer 
receiving a Guarantee shall submit annual updates to the approved 
Capital Distribution Plan, including an updated Proposed Sources and 
Uses of Funds for each Eligible CDFI, noting any deviation from the 
original baseline with regards to both timing and allocation of funding 
among Secondary Loan asset classes. The Qualified Issuer shall also 
submit a narrative, no more than five (5) pages in length for each 
Eligible CDFI, describing the Eligible CDFI's capacity to manage its 
Bond Loan. The narrative shall address any Notification of Material 
Events and relevant information concerning the Eligible CDFI's 
management information systems, personnel, executive leadership or 
board members, as well as financial capacity. The narrative shall also 
describe how such changes affect the Eligible CDFI's ability to 
generate impacts in Low-Income or Underserved Rural Areas.
    c. Change of Secondary Loan asset classes. Any Eligible CDFI 
seeking to expand the allowable Secondary Loan asset classes beyond 
what was approved by the CDFI Bond Guarantee Program's Credit Review 
Board or make other deviations that could potentially result in a 
modification, as that term is defined in OMB Circulars A-11 and A-129, 
must receive approval from the CDFI Fund before the Eligible CDFI can 
begin to enact the proposed changes. The CDFI Fund will consider 
whether the Eligible CDFI possesses or has acquired the appropriate 
systems, personnel, leadership, and financial capacity to implement the 
revised Capital Distribution Plan. The CDFI Fund will also consider 
whether these changes assist the Eligible CDFI in generating impacts in 
Low-Income or Underserved Rural Areas. Such changes will be reviewed by 
the CDFI Bond Guarantee Program and presented to the Credit Review 
Board for approval, and appropriate consultation will be made with OMB 
to ensure compliance with OMB Circulars A-11 and A-129, prior to 
notifying the Eligible CDFI if such changes are acceptable under the 
terms of the Bond Loan Agreement. An Eligible CDFI may request such an 
update to its Capital Distribution Plan prior to Bond Issue Closing, 
and thereafter may only request such an update once per the Eligible 
CDFI's fiscal year.
    d. Reporting by Affiliates and Controlling CDFIs. In the case of an 
Eligible CDFI relying, for CDFI certification purposes, on the 
financing entity activity of a Controlling CDFI, the CDFI Fund will 
require that the Affiliate and Controlling CDFI provide certain joint 
reports, including but not limited

[[Page 15867]]

to those listed in subparagraph 1(a) above.
    e. Detailed information on specific reporting requirements and the 
format, frequency, and methods by which this information will be 
transmitted to the CDFI Fund will be provided to Qualified Issuers, 
Program Administrators, Servicers, and Eligible CDFIs through the Bond 
Loan Agreement, correspondence, and webinar trainings, and/or scheduled 
outreach sessions.
    f. Reporting requirements will be enforced through the Agreement to 
Guarantee and the Bond Loan Agreement, and will contain a valid OMB 
control number pursuant to the Paperwork Reduction Act, as applicable.
    g. 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, Secondary Borrowers or Credit Enhancement providers. 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.
    h. Annual Assessments. Each Qualified Issuer and Eligible CDFI will 
be required to have an independent third-party conduct an Annual 
Assessment of its Bond Loan portfolio. The Annual Assessment is 
intended to support the CDFI Fund's annual monitoring of the Bond Loan 
portfolio and to collect financial health, internal control, investment 
impact measurement methodology information related to the Eligible 
CDFIs. This assessment is consistent with the program's requirements 
for Compliance Management and Monitoring (CMM) and Portfolio Management 
and Loan Monitoring (PMLM), and will be required pursuant to the Bond 
Documents and the Bond Loan documents. The assessment will also add to 
the Department of the Treasury's review and impact analysis on the use 
of Bond Loan proceeds in underserved communities and support the CDFI 
Fund in proactively managing portfolio risks and performance. The 
Annual Assessment criteria for Qualified Issuers and Eligible CDFIs is 
available on the CDFI Fund's website.
    i. 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, the Bond Documents and 
the Bond Loan documents will be subject to the Paperwork Reduction Act, 
as applicable.
    2. 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 
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.

V. Agency Contacts

    A. General information on questions and CDFI Fund support. 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. The final date to submit questions is 
May 4, 2020. Applications and other information regarding the CDFI Fund 
and its programs may be obtained from the CDFI Fund's website at https://www.cdfifund.gov. The CDFI Fund will post on its website 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
----------------------------------------------------------------------------------------------------------------
         Type of question                 Telephone No.  (not toll free)                 Email addresses
----------------------------------------------------------------------------------------------------------------
CDFI Bond Guarantee Program.......  (202) 653-0421 Option 5...................  [email protected].
CDFI Certification................  (202) 653-0423............................  [email protected].
Certification, Compliance           (202) 653-0423............................  [email protected].
 Monitoring and Evaluation.
Information Technology Support....  (202) 653-0422............................  [email protected].
----------------------------------------------------------------------------------------------------------------

    C. Communication with the CDFI Fund. The CDFI Fund will communicate 
with applicants, Qualified Issuers, Program Administrators, Servicers, 
Certified CDFIs and Eligible CDFIs, using the contact information 
maintained in their respective AMIS 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 AMIS account. 
For more information about AMIS, please see the AMIS Landing Page at 
https://amis.cdfifund.gov.

VI. 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. The CDFI 
Fund intends to provide targeted outreach to both Qualified Issuer and 
Eligible CDFI participants to clarify the roles and requirements under 
the CDFI Bond Guarantee Program. For further information, or to sign up 
for alerts, please visit the CDFI Fund's website at https://www.cdfifund.gov.

    Authority:  Pub. L. 111-240; 12 U.S.C. 4701, et seq.; 12 CFR 
part 1808; 12 CFR part 1805; 12 CFR part 1815.

Jodie L. Harris,
Director, Community Development Financial Institutions Fund.
[FR Doc. 2020-05682 Filed 3-18-20; 8:45 am]
 BILLING CODE 4810-70-P