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cdcu.coop

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    3. Presentation Agenda CDFI Fund Overview FY 2009 CDFI Program Financial Assistance Changes Due to Recovery Act Comprehensive Business Plan Tips (4 C’s) Scoring Summary Executive Summary Narrative Questions 1 thru 25 Application Charts Application Review Process & Awardee Selection FY2010 and Beyond Technical Assistance Grants (TA) Matching Funds Requirement

    4. CDFI Fund Mission and Vision

    5. Programs and Initiatives The Fund achieves its mission by directly investing in and supporting Community Development Financial Institutions (CDFIs), Community Development Entities (CDEs), and other financial institutions through the following programs and initiatives: CDFI Program Financial Assistance (FA) Awards Technical Assistance (TA) Grants Native Initiatives Program Bank Enterprise Award (BEA) Program New Markets Tax Credit (NMTC) Program Mention also the Fund’s other initiatives: Research Training RuralMention also the Fund’s other initiatives: Research Training Rural

    6. CDFI Snap Shot (thru 2006) Types of certified CDFIs: Loan Funds Credit Unions FDIC-insured Community Banks Bank Holding Companies Community Development Venture Capital Funds Average asset size of depository institution CDFIs is $35.4 million. Average asset size of non-depository institution CDFIs is $19.5 million. Data cumulative through 2006 via CIIS It should be noted that for depository institutions, banks have an average asset of $104.3M while credit unions have an average asset of $13.5M. See attached for details. Data cumulative through 2006 via CIIS It should be noted that for depository institutions, banks have an average asset of $104.3M while credit unions have an average asset of $13.5M. See attached for details.

    7. CDFI Program CDFI Program Financial Assistance (FA) Technical Assistance (TA) Promote economic revitalization and community development through investment in and assistance to CDFIs. Help build the capacity of CDFIs to serve eligible Target Markets (e.g., low-income people, economically distressed areas, communities lacking adequate access to affordable financial products and services). Discuss Investment Areas by Census Tract, LITP, OTP Leverage CDFI Fund resources through the provision of a range of investment types (i.e. loans, deposits, grants). Investments can be in the form of financial assistance (which requires matching funds) or technical assistance). Promote economic revitalization and community development through investment in and assistance to CDFIs. Help build the capacity of CDFIs to serve eligible Target Markets (e.g., low-income people, economically distressed areas, communities lacking adequate access to affordable financial products and services). Discuss Investment Areas by Census Tract, LITP, OTP Leverage CDFI Fund resources through the provision of a range of investment types (i.e. loans, deposits, grants). Investments can be in the form of financial assistance (which requires matching funds) or technical assistance).

    8. Allowable Uses of Funds Financial Assistance Award Uses Financial Products Financial Services Development services Loan Loss Reserves Capital Reserves Operations The Fund meets its Mission & Purpose by providing awards for these purposes… Financial Assistance only available to organizations that the Fund has certified as a community development f.i……(on next slide) Should mention the 85% rule when discussing Financial AssistanceThe Fund meets its Mission & Purpose by providing awards for these purposes… Financial Assistance only available to organizations that the Fund has certified as a community development f.i……(on next slide) Should mention the 85% rule when discussing Financial Assistance

    9. FA Eligibility Factors FA awards are available to: Certified CDFIs: entities with Fund certification that has not expired or been terminated. Certifiable CDFIs: entities that are not certified, but currently meet all seven certification requirements. Must have submitted Certification Application by March 18, 2009, and be certified before entering into an Assistance Agreement.

    10. Certification Criteria An entity must meet all of the following requirements to be certified as a CDFI: Be a Legal existing entity, Have a Primary Mission of promoting community development, Be a Financing Entity, Primarily serve an eligible Target Market. Provide Development Services in conjunction with its financing activities, Maintain Accountability to its defined Target Market. Be a Non-Governmental Entity, and not be controlled by any governmental entities. Only use full certification application if both of the following apply: Applicant has complete confidence that all requirements are met. The Applicant is requesting FA Discuss each test generallyOnly use full certification application if both of the following apply: Applicant has complete confidence that all requirements are met. The Applicant is requesting FA Discuss each test generally

    11. FA Applicant Categories Category I: Small & Emerging CDFI Assistance (SECA) Generally younger and/or smaller in asset size. Maximum prior cumulative/aggregate FA award limit = $500,000. Maximum FA request = $600,000. Category II: Core All applicants that do not qualify for SECA category. Generally older, larger CDFIs. Maximum FA request = $2 million. SECA category provides qualifying applicants a less competitive round; allows the younger, less sophisticated CDFIs to compete with the big ones. SECA groups are ranked separately. Core is more competitive. The Specifics of SECA: - Must have received <$500,000 in FA prior to 10/31/07; AND - Must meet an asset test or an age test as follows: Began operations on or after January 1, 2003; OR Has Total Assets as of 09/30/07 as follows: - Insured Depository Institution/Holding Company: up to $250 million - Credit Union or Venture Capital Fund: up to $10 million - Other CDFIs (Loan Funds): up to $5 million - Award Caps: $500,000 (FA) and $100,000 (TA). THe Specifics of CORE: An applicant that requests more than $500,000 in FA regardless of size, years in operation, or prior Fund awards. - Award Caps: up to $2 million maximum in FA plus up to $100,000 in TA. SECA category provides qualifying applicants a less competitive round; allows the younger, less sophisticated CDFIs to compete with the big ones. SECA groups are ranked separately. Core is more competitive. The Specifics of SECA: - Must have received <$500,000 in FA prior to 10/31/07; AND - Must meet an asset test or an age test as follows: Began operations on or after January 1, 2003; OR Has Total Assets as of 09/30/07 as follows: - Insured Depository Institution/Holding Company: up to $250 million - Credit Union or Venture Capital Fund: up to $10 million - Other CDFIs (Loan Funds): up to $5 million - Award Caps: $500,000 (FA) and $100,000 (TA). THe Specifics of CORE: An applicant that requests more than $500,000 in FA regardless of size, years in operation, or prior Fund awards. - Award Caps: up to $2 million maximum in FA plus up to $100,000 in TA.

    12. Recovery Act American Reinvestment and Recovery Act (ARRA) Additional $90M to CDFI Program Waives Match Fund Requirements Waives $5M Prior Awards Cap

    13. Recovery Act American Reinvestment and Recovery Act (ARRA) CDFI Fund Re-opened Application New FA Applications Due May 27 No match requirement; Awards as Grants No TA; can use FA to Pay for TA Activities

    14. Comprehensive Business Plan (CBP) Overview Tips (4 C’s) Scoring Summary Executive Summary Narrative Questions 1 thru 25 Application Charts

    15. CBP – Changes for 2009 Changes for the FY2009 Round No Paper Attachments Accepted – All submissions electronic Page Limits on Sections

    16. CBP - Tips The 4 C’s of a Good Application: Concise (mind the page limits) Complete Correct Calendar Conscious – Do not be LATE! The Applicant should be concise – answering each question completely. The Applicant is responsible for ensuring that all applicable CBP questions and the Application Charts are answered completely – at the time of submission. The Fund will not provide the Applicant an opportunity to provide supplemental or “corrected” information for the CBP or the Application charts. Tell your story Follow Directions Application includes tips and guidance for each question Narrative should discuss and flow with the information provided in the Charts. The CBP template includes guidance on the expected length of each narrative based on the applicant type. If an Applicant is seeking TA Only, it must answer the same questions as an Applicant seeking FA. However, the Fund expects that the response from a TA-Only Applicant will be shorter (e.g., 1-2 paragraphs versus 1-2 pages) and have less detail than for an FA Applicant. The Applicant should be concise – answering each question completely. The Applicant is responsible for ensuring that all applicable CBP questions and the Application Charts are answered completely – at the time of submission. The Fund will not provide the Applicant an opportunity to provide supplemental or “corrected” information for the CBP or the Application charts. Tell your story Follow Directions Application includes tips and guidance for each question Narrative should discuss and flow with the information provided in the Charts. The CBP template includes guidance on the expected length of each narrative based on the applicant type. If an Applicant is seeking TA Only, it must answer the same questions as an Applicant seeking FA. However, the Fund expects that the response from a TA-Only Applicant will be shorter (e.g., 1-2 paragraphs versus 1-2 pages) and have less detail than for an FA Applicant.

    17. CBP – Scoring Summary Although TA is not separately scored; it is evaluated within each of the 5 key sections.Although TA is not separately scored; it is evaluated within each of the 5 key sections.

    18. CBP - Executive Summary Key Components: Mission & Vision of the Organization Highlights of the Comprehensive Business Plan Use of FA Award Applicant Profile Provide a general overview and timeline of what you’ll be doing.Provide a general overview and timeline of what you’ll be doing.

    19. CBP - Market Analysis Narrative: Briefly describe the Applicant’s current or proposed Target Market. Discuss the demand for the Applicant’s Financial Products, Development Services, and/or Financial Services within the Target Market. Address areas needing improvement and, if applicable, justify requested TA activities that will help. The Basics: Tell your Story What are you doing and Why? What is the Need vs. Demand? Provide Qualitative & Quantitative evidence of distress and demand. What are your weaknesses? Are you requesting TA for it? TA-only Applicants: 25 points; Category I/SECA: 25 points; Category II/Core: 20 points The Fund will evaluate: (i) the extent and nature of the economic distress within the designated Target Market including the Applicant's understanding of its current and prospective customers; and (ii) the extent of demand for the Applicant’s Financial Products, Development Services, and Financial Services within the designated Target Market. The Basics: Tell your Story What are you doing and Why? What is the Need vs. Demand? Provide Qualitative & Quantitative evidence of distress and demand. What are your weaknesses? Are you requesting TA for it? TA-only Applicants: 25 points; Category I/SECA: 25 points; Category II/Core: 20 points The Fund will evaluate: (i) the extent and nature of the economic distress within the designated Target Market including the Applicant's understanding of its current and prospective customers; and (ii) the extent of demand for the Applicant’s Financial Products, Development Services, and Financial Services within the designated Target Market.

    20. CBP - Business Strategy Narrative: Describe the Applicant’s relevant Financial Products and Financial Services. Describe the Applicant’s Development Services. Describe the Applicant’s marketing, outreach, and delivery strategy. Discuss the Applicant’s collaboration, coordination, and partnerships. Address areas needing improvement. The Basics: Products & Services What are they? How do they meet demand? How do they differ from what is already available? What is the Marketing & Outreach strategy? Who are your partners? What are your weaknesses? Are you requesting TA for it? (TA-only Applicants: 25 points; Category I/SECA: 25 points; Category II/Core: 20 points) The Fund will evaluate the Applicant’s business strategy for addressing market demand and creating community development impact through: (i) its Financial Products, Development Services, and/or Financial Services; (ii) its marketing, outreach, and delivery strategy; and (iii) the extent, quality and nature of coordination with other similar providers of Financial Products and Financial Services, government agencies, and other key community development entities within the Target Market. The Fund will take into consideration whether the Applicant is proposing to expand into a new Target Market. The Basics: Products & Services What are they? How do they meet demand? How do they differ from what is already available? What is the Marketing & Outreach strategy? Who are your partners? What are your weaknesses? Are you requesting TA for it? (TA-only Applicants: 25 points; Category I/SECA: 25 points; Category II/Core: 20 points) The Fund will evaluate the Applicant’s business strategy for addressing market demand and creating community development impact through: (i) its Financial Products, Development Services, and/or Financial Services; (ii) its marketing, outreach, and delivery strategy; and (iii) the extent, quality and nature of coordination with other similar providers of Financial Products and Financial Services, government agencies, and other key community development entities within the Target Market. The Fund will take into consideration whether the Applicant is proposing to expand into a new Target Market.

    21. CBP - Business Strategy Charts and Attachments: Activities Level Chart (Chart D) (TA-only Applicants: 25 points; Category I/SECA: 25 points; Category II/Core: 20 points) The Fund will evaluate the Applicant’s business strategy for addressing market demand and creating community development impact through: (i) its Financial Products, Development Services, and/or Financial Services; (ii) its marketing, outreach, and delivery strategy; and (iii) the extent, quality and nature of coordination with other similar providers of Financial Products and Financial Services, government agencies, and other key community development entities within the Target Market. The Fund will take into consideration whether the Applicant is proposing to expand into a new Target Market. (TA-only Applicants: 25 points; Category I/SECA: 25 points; Category II/Core: 20 points) The Fund will evaluate the Applicant’s business strategy for addressing market demand and creating community development impact through: (i) its Financial Products, Development Services, and/or Financial Services; (ii) its marketing, outreach, and delivery strategy; and (iii) the extent, quality and nature of coordination with other similar providers of Financial Products and Financial Services, government agencies, and other key community development entities within the Target Market. The Fund will take into consideration whether the Applicant is proposing to expand into a new Target Market.

    22. CBP – CDP/ Effective Use Narrative: Describe the Applicant's track record in providing Financial Products, Development Services, and/or Financial Services. Describe the Applicant's projected activities and how progress toward these goals is measured. Discuss why the Applicant should receive a government subsidy in the form of a CDFI Fund award given the Fund’s limited resources. The Fund is looking for clearly defined specific outcomes or impacts that will be achieved during the performance period. For example, as a result of the Applicant’s activities, it may successfully increase homeownership opportunities for Low Income residents of the Target Market. In structuring this discussion, keep in mind that outcomes are ultimate goals. Benchmarks or outputs are interim activities or products that lead to the ultimate achievement of the Applicant’s goals. The Fund is looking for clearly defined specific outcomes or impacts that will be achieved during the performance period. For example, as a result of the Applicant’s activities, it may successfully increase homeownership opportunities for Low Income residents of the Target Market. In structuring this discussion, keep in mind that outcomes are ultimate goals. Benchmarks or outputs are interim activities or products that lead to the ultimate achievement of the Applicant’s goals.

    23. CBP – CDP/ Effective Use Prior Awardees’ past performance. Address areas needing improvement.

    24. CBP – CDP/ Effective Use Charts and Attachments: Activities Level Chart (Chart D) – shown previously Community Development Impacts Chart (Chart E) The Fund is looking for clearly defined specific outcomes or impacts that will be achieved during the performance period. For example, as a result of the Applicant’s activities, it may successfully increase homeownership opportunities for Low Income residents of the Target Market. In structuring this discussion, keep in mind that outcomes are ultimate goals. Benchmarks or outputs are interim activities or products that lead to the ultimate achievement of the Applicant’s goals. The Fund is looking for clearly defined specific outcomes or impacts that will be achieved during the performance period. For example, as a result of the Applicant’s activities, it may successfully increase homeownership opportunities for Low Income residents of the Target Market. In structuring this discussion, keep in mind that outcomes are ultimate goals. Benchmarks or outputs are interim activities or products that lead to the ultimate achievement of the Applicant’s goals.

    25. CBP - Management Narrative: Describe the capacity, skills, size and experience of the Applicant’s Governing Board. Describe the capacity, skills, and experience of the Applicant’s management team and key staff. Describe the Applicant’s underwriting policies and procedures. Describe the Applicant’s portfolio management policies and procedures. The Basics: Who is implementing your Strategy? What are your Policies & Procedures? Underwriting, Portfolio Monitoring, Financial/Risk Management How will you ensure compliance with an Award? What are your weaknesses? Are you requesting TA for it? The Basics: Who is implementing your Strategy? What are your Policies & Procedures? Underwriting, Portfolio Monitoring, Financial/Risk Management How will you ensure compliance with an Award? What are your weaknesses? Are you requesting TA for it?

    26. CBP - Management Describe the Applicant’s financial management policies and procedures. Describe the Applicant’s Management Information Systems (MIS). Address areas needing improvement.

    27. CBP - Management Corresponding Charts and Attachments: Organizational Chart Up-to-date resumes of all personnel involved in implementing the CBP Show all positions and reporting relationships as of Application deadline, including (1) Governing Board; (2) management; (3) staff including shared or donated staff from other organizations or Affiliates; and (4) volunteers and consultants who are an integral part of the Applicant’s operations. Show all positions and reporting relationships as of Application deadline, including (1) Governing Board; (2) management; (3) staff including shared or donated staff from other organizations or Affiliates; and (4) volunteers and consultants who are an integral part of the Applicant’s operations. Need resumes of those Applicant is asking for support for. Show all positions and reporting relationships as of Application deadline, including (1) Governing Board; (2) management; (3) staff including shared or donated staff from other organizations or Affiliates; and (4) volunteers and consultants who are an integral part of the Applicant’s operations. Show all positions and reporting relationships as of Application deadline, including (1) Governing Board; (2) management; (3) staff including shared or donated staff from other organizations or Affiliates; and (4) volunteers and consultants who are an integral part of the Applicant’s operations. Need resumes of those Applicant is asking for support for.

    28. CBP - Financial Health and Viability Narrative: Describe the type of Financial Statements included with the Application – audited, reviewed, internally prepared. Provide key assumptions underlying the projections for the three years (FY 200-FY 2011) identified in the Financial Data Input Chart. Financial Ratios. The Basics: This is the Reality Check – Can you financially meet your goals and objectives to successfully carry-out the business plan? What are the assumptions and discrepancies between the Financial Data Input Chart and your annual financial statements? If you don’t meet MPS, why not? How do you anticipate improving the ratio(s)? What is your capitalization strategy? What are your weaknesses? Are you requesting TA for it? For each Financial Ratio: State the ratio calculated on the Financial Data Input chart and whether it meets the MPS. Explain the expectation or goal for this ratio and how those expectations were developed and documented. For regulated Applicants, discuss any regulatory constraints or agreements affecting the MPS. If the ratio does not meet the MPS: Explain why the Applicant is financially sound although it does not meet the MPS; or Explain how requested FA or TA will affect the ratio. Capital Ratio: Explain why the Applicant’s debts exceed 80% of its total assets and how the organization protects itself from financial risks related to this debt level. Earnings Ratio. Explain such factors as unusual losses, plans for preventing such losses in the future, strategy for increasing earnings, and how the requested FA and/or TA will help the Applicant increase its earning potential. The Fund expects CDFIs to sustain positive net revenue each year but recognizes the nature of CDFI funding sources makes that difficult. The Fund’s MPS is therefore based on a three-year time frame. Operating Liquidity [Non-Regulated] or Capital Liquidity [Regulated] Ratio. Address the factors affecting the Applicant’s ability to meet its liabilities with off-balance sheet resources or other strategies. Self-Sufficiency Ratio. (N/A for ICUs, IDIs, and DIHCs.) Describe strategy and timeline for increasing total earned income and/or decreasing expenses. Explain any inflexible impediments to self-sufficiency and why they are considered inflexible (e.g., product mix or market served discussions.) Portfolio Management Ratios. Compare 3-year average historical ratios calculated on the Loan Portfolio Quality Chart (Chart G) to the applicable MPS. Use the narrative responses to explain any discrepancies. Overall MPS should be based on the product with the largest dollar percentage in your portfolio at the close of your last fiscal year. For each portfolio management ratio, the Applicant will address the following: State whether the Applicant met the MPS. For the Delinquency (PAR) Ratio, the narrative should address each product grouping PAR ratio. For Net Loan Loss (NLL) and Loan Loss Reserve (LLR), address the aggregate portfolio result as they compare to the MPS. Explain the organization’s expectation or goal for the portfolio ratio and how it was developed and documented. If the Applicant failed the portfolio MPS further explain why the Applicant believes it has reasonable risk management despite not meeting the MPS or, describe the steps being taken to address this failure.The Basics: This is the Reality Check – Can you financially meet your goals and objectives to successfully carry-out the business plan? What are the assumptions and discrepancies between the Financial Data Input Chart and your annual financial statements? If you don’t meet MPS, why not? How do you anticipate improving the ratio(s)? What is your capitalization strategy? What are your weaknesses? Are you requesting TA for it? For each Financial Ratio: State the ratio calculated on the Financial Data Input chart and whether it meets the MPS. Explain the expectation or goal for this ratio and how those expectations were developed and documented. For regulated Applicants, discuss any regulatory constraints or agreements affecting the MPS. If the ratio does not meet the MPS: Explain why the Applicant is financially sound although it does not meet the MPS; or Explain how requested FA or TA will affect the ratio. Capital Ratio: Explain why the Applicant’s debts exceed 80% of its total assets and how the organization protects itself from financial risks related to this debt level. Earnings Ratio. Explain such factors as unusual losses, plans for preventing such losses in the future, strategy for increasing earnings, and how the requested FA and/or TA will help the Applicant increase its earning potential. The Fund expects CDFIs to sustain positive net revenue each year but recognizes the nature of CDFI funding sources makes that difficult. The Fund’s MPS is therefore based on a three-year time frame. Operating Liquidity [Non-Regulated] or Capital Liquidity [Regulated] Ratio. Address the factors affecting the Applicant’s ability to meet its liabilities with off-balance sheet resources or other strategies. Self-Sufficiency Ratio. (N/A for ICUs, IDIs, and DIHCs.) Describe strategy and timeline for increasing total earned income and/or decreasing expenses. Explain any inflexible impediments to self-sufficiency and why they are considered inflexible (e.g., product mix or market served discussions.) Portfolio Management Ratios. Compare 3-year average historical ratios calculated on the Loan Portfolio Quality Chart (Chart G) to the applicable MPS. Use the narrative responses to explain any discrepancies. Overall MPS should be based on the product with the largest dollar percentage in your portfolio at the close of your last fiscal year. For each portfolio management ratio, the Applicant will address the following: State whether the Applicant met the MPS. For the Delinquency (PAR) Ratio, the narrative should address each product grouping PAR ratio. For Net Loan Loss (NLL) and Loan Loss Reserve (LLR), address the aggregate portfolio result as they compare to the MPS. Explain the organization’s expectation or goal for the portfolio ratio and how it was developed and documented. If the Applicant failed the portfolio MPS further explain why the Applicant believes it has reasonable risk management despite not meeting the MPS or, describe the steps being taken to address this failure.

    29. CBP - Financial Health and Viability The Basics: This is the Reality Check – Can you financially meet your goals and objectives to successfully carry-out the business plan? What are the assumptions and discrepancies between the Financial Data Input Chart and your annual financial statements? If you don’t meet MPS, why not? How do you anticipate improving the ratio(s)? What is your capitalization strategy? What are your weaknesses? Are you requesting TA for it? For each Financial Ratio: State the ratio calculated on the Financial Data Input chart and whether it meets the MPS. Explain the expectation or goal for this ratio and how those expectations were developed and documented. For regulated Applicants, discuss any regulatory constraints or agreements affecting the MPS. If the ratio does not meet the MPS: Explain why the Applicant is financially sound although it does not meet the MPS; or Explain how requested FA or TA will affect the ratio. Capital Ratio: Explain why the Applicant’s debts exceed 80% of its total assets and how the organization protects itself from financial risks related to this debt level. Earnings Ratio. Explain such factors as unusual losses, plans for preventing such losses in the future, strategy for increasing earnings, and how the requested FA and/or TA will help the Applicant increase its earning potential. The Fund expects CDFIs to sustain positive net revenue each year but recognizes the nature of CDFI funding sources makes that difficult. The Fund’s MPS is therefore based on a three-year time frame. Operating Liquidity [Non-Regulated] or Capital Liquidity [Regulated] Ratio. Address the factors affecting the Applicant’s ability to meet its liabilities with off-balance sheet resources or other strategies. Self-Sufficiency Ratio. (N/A for ICUs, IDIs, and DIHCs.) Describe strategy and timeline for increasing total earned income and/or decreasing expenses. Explain any inflexible impediments to self-sufficiency and why they are considered inflexible (e.g., product mix or market served discussions.) Portfolio Management Ratios. Compare 3-year average historical ratios calculated on the Loan Portfolio Quality Chart (Chart G) to the applicable MPS. Use the narrative responses to explain any discrepancies. Overall MPS should be based on the product with the largest dollar percentage in your portfolio at the close of your last fiscal year. For each portfolio management ratio, the Applicant will address the following: State whether the Applicant met the MPS. For the Delinquency (PAR) Ratio, the narrative should address each product grouping PAR ratio. For Net Loan Loss (NLL) and Loan Loss Reserve (LLR), address the aggregate portfolio result as they compare to the MPS. Explain the organization’s expectation or goal for the portfolio ratio and how it was developed and documented. If the Applicant failed the portfolio MPS further explain why the Applicant believes it has reasonable risk management despite not meeting the MPS or, describe the steps being taken to address this failure.The Basics: This is the Reality Check – Can you financially meet your goals and objectives to successfully carry-out the business plan? What are the assumptions and discrepancies between the Financial Data Input Chart and your annual financial statements? If you don’t meet MPS, why not? How do you anticipate improving the ratio(s)? What is your capitalization strategy? What are your weaknesses? Are you requesting TA for it? For each Financial Ratio: State the ratio calculated on the Financial Data Input chart and whether it meets the MPS. Explain the expectation or goal for this ratio and how those expectations were developed and documented. For regulated Applicants, discuss any regulatory constraints or agreements affecting the MPS. If the ratio does not meet the MPS: Explain why the Applicant is financially sound although it does not meet the MPS; or Explain how requested FA or TA will affect the ratio. Capital Ratio: Explain why the Applicant’s debts exceed 80% of its total assets and how the organization protects itself from financial risks related to this debt level. Earnings Ratio. Explain such factors as unusual losses, plans for preventing such losses in the future, strategy for increasing earnings, and how the requested FA and/or TA will help the Applicant increase its earning potential. The Fund expects CDFIs to sustain positive net revenue each year but recognizes the nature of CDFI funding sources makes that difficult. The Fund’s MPS is therefore based on a three-year time frame. Operating Liquidity [Non-Regulated] or Capital Liquidity [Regulated] Ratio. Address the factors affecting the Applicant’s ability to meet its liabilities with off-balance sheet resources or other strategies. Self-Sufficiency Ratio. (N/A for ICUs, IDIs, and DIHCs.) Describe strategy and timeline for increasing total earned income and/or decreasing expenses. Explain any inflexible impediments to self-sufficiency and why they are considered inflexible (e.g., product mix or market served discussions.) Portfolio Management Ratios. Compare 3-year average historical ratios calculated on the Loan Portfolio Quality Chart (Chart G) to the applicable MPS. Use the narrative responses to explain any discrepancies. Overall MPS should be based on the product with the largest dollar percentage in your portfolio at the close of your last fiscal year. For each portfolio management ratio, the Applicant will address the following: State whether the Applicant met the MPS. For the Delinquency (PAR) Ratio, the narrative should address each product grouping PAR ratio. For Net Loan Loss (NLL) and Loan Loss Reserve (LLR), address the aggregate portfolio result as they compare to the MPS. Explain the organization’s expectation or goal for the portfolio ratio and how it was developed and documented. If the Applicant failed the portfolio MPS further explain why the Applicant believes it has reasonable risk management despite not meeting the MPS or, describe the steps being taken to address this failure.

    30. CBP - Financial Health and Viability Narrative: Portfolio Management Ratios. Equity Investor Financial Health. Address areas needing improvement. The Basics: This is the Reality Check – Can you financially meet your goals and objectives to successfully carry-out the business plan? What are the assumptions and discrepancies between the Financial Data Input Chart and your annual financial statements? If you don’t meet MPS, why not? How do you anticipate improving the ratio(s)? What is your capitalization strategy? What are your weaknesses? Are you requesting TA for it? For each Financial Ratio: State the ratio calculated on the Financial Data Input chart and whether it meets the MPS. Explain the expectation or goal for this ratio and how those expectations were developed and documented. For regulated Applicants, discuss any regulatory constraints or agreements affecting the MPS. If the ratio does not meet the MPS: Explain why the Applicant is financially sound although it does not meet the MPS; or Explain how requested FA or TA will affect the ratio. Capital Ratio: Explain why the Applicant’s debts exceed 80% of its total assets and how the organization protects itself from financial risks related to this debt level. Earnings Ratio. Explain such factors as unusual losses, plans for preventing such losses in the future, strategy for increasing earnings, and how the requested FA and/or TA will help the Applicant increase its earning potential. The Fund expects CDFIs to sustain positive net revenue each year but recognizes the nature of CDFI funding sources makes that difficult. The Fund’s MPS is therefore based on a three-year time frame. Operating Liquidity [Non-Regulated] or Capital Liquidity [Regulated] Ratio. Address the factors affecting the Applicant’s ability to meet its liabilities with off-balance sheet resources or other strategies. Self-Sufficiency Ratio. (N/A for ICUs, IDIs, and DIHCs.) Describe strategy and timeline for increasing total earned income and/or decreasing expenses. Explain any inflexible impediments to self-sufficiency and why they are considered inflexible (e.g., product mix or market served discussions.) Portfolio Management Ratios. Compare 3-year average historical ratios calculated on the Loan Portfolio Quality Chart (Chart G) to the applicable MPS. Use the narrative responses to explain any discrepancies. Overall MPS should be based on the product with the largest dollar percentage in your portfolio at the close of your last fiscal year. For each portfolio management ratio, the Applicant will address the following: State whether the Applicant met the MPS. For the Delinquency (PAR) Ratio, the narrative should address each product grouping PAR ratio. For Net Loan Loss (NLL) and Loan Loss Reserve (LLR), address the aggregate portfolio result as they compare to the MPS. Explain the organization’s expectation or goal for the portfolio ratio and how it was developed and documented. If the Applicant failed the portfolio MPS further explain why the Applicant believes it has reasonable risk management despite not meeting the MPS or, describe the steps being taken to address this failure.The Basics: This is the Reality Check – Can you financially meet your goals and objectives to successfully carry-out the business plan? What are the assumptions and discrepancies between the Financial Data Input Chart and your annual financial statements? If you don’t meet MPS, why not? How do you anticipate improving the ratio(s)? What is your capitalization strategy? What are your weaknesses? Are you requesting TA for it? For each Financial Ratio: State the ratio calculated on the Financial Data Input chart and whether it meets the MPS. Explain the expectation or goal for this ratio and how those expectations were developed and documented. For regulated Applicants, discuss any regulatory constraints or agreements affecting the MPS. If the ratio does not meet the MPS: Explain why the Applicant is financially sound although it does not meet the MPS; or Explain how requested FA or TA will affect the ratio. Capital Ratio: Explain why the Applicant’s debts exceed 80% of its total assets and how the organization protects itself from financial risks related to this debt level. Earnings Ratio. Explain such factors as unusual losses, plans for preventing such losses in the future, strategy for increasing earnings, and how the requested FA and/or TA will help the Applicant increase its earning potential. The Fund expects CDFIs to sustain positive net revenue each year but recognizes the nature of CDFI funding sources makes that difficult. The Fund’s MPS is therefore based on a three-year time frame. Operating Liquidity [Non-Regulated] or Capital Liquidity [Regulated] Ratio. Address the factors affecting the Applicant’s ability to meet its liabilities with off-balance sheet resources or other strategies. Self-Sufficiency Ratio. (N/A for ICUs, IDIs, and DIHCs.) Describe strategy and timeline for increasing total earned income and/or decreasing expenses. Explain any inflexible impediments to self-sufficiency and why they are considered inflexible (e.g., product mix or market served discussions.) Portfolio Management Ratios. Compare 3-year average historical ratios calculated on the Loan Portfolio Quality Chart (Chart G) to the applicable MPS. Use the narrative responses to explain any discrepancies. Overall MPS should be based on the product with the largest dollar percentage in your portfolio at the close of your last fiscal year. For each portfolio management ratio, the Applicant will address the following: State whether the Applicant met the MPS. For the Delinquency (PAR) Ratio, the narrative should address each product grouping PAR ratio. For Net Loan Loss (NLL) and Loan Loss Reserve (LLR), address the aggregate portfolio result as they compare to the MPS. Explain the organization’s expectation or goal for the portfolio ratio and how it was developed and documented. If the Applicant failed the portfolio MPS further explain why the Applicant believes it has reasonable risk management despite not meeting the MPS or, describe the steps being taken to address this failure.

    31. CBP - Financial Health and Viability Charts and Attachments: Financial Data Input Chart (Chart F1, F2, or F3 depending on organization type) Financial Statements for the 3 most recently completed fiscal years Loan Portfolio Quality Chart (Chart G) Equity Investment Portfolio Valuation Chart (Chart H) Non-Regulated Applicants: Submit audited or reviewed Financial Statements. If audited or reviewed Financial Statements are not available, submit internally generated balance sheets (statements of financial position) and Income and Expense Statements (statements of activities), and respond to question 25, below. Applicants with Affiliate(s): If the audited Financial Statements of the Applicant are consolidated with its Affiliate(s) and do not include separate schedules of the Applicant’s financial position and Income and Expense Statements, submit a separate set of internally generated Financial Statements for the Applicant. ICUs, IDIs, and DIHCs: Submit Financial Statements for the last three completed fiscal years that have been reviewed by the Applicant’s Appropriate Federal Banking Agency (e.g., National Credit Union Administration Form 5300, or Uniform Bank Performance Report). Submit Financial Performance Ratios (FPR) prepared by the Applicant’s Appropriate Federal Banking Agency for the last three completed fiscal years.Non-Regulated Applicants: Submit audited or reviewed Financial Statements. If audited or reviewed Financial Statements are not available, submit internally generated balance sheets (statements of financial position) and Income and Expense Statements (statements of activities), and respond to question 25, below. Applicants with Affiliate(s): If the audited Financial Statements of the Applicant are consolidated with its Affiliate(s) and do not include separate schedules of the Applicant’s financial position and Income and Expense Statements, submit a separate set of internally generated Financial Statements for the Applicant. ICUs, IDIs, and DIHCs: Submit Financial Statements for the last three completed fiscal years that have been reviewed by the Applicant’s Appropriate Federal Banking Agency (e.g., National Credit Union Administration Form 5300, or Uniform Bank Performance Report). Submit Financial Performance Ratios (FPR) prepared by the Applicant’s Appropriate Federal Banking Agency for the last three completed fiscal years.

    32. CBP - Financial Health and Viability Failure to meet any of the historic and/or projected MPS does not necessarily preclude the Applicant from receiving a Financial Assistance and/or Technical Assistance award. However, the Applicant must explain why it believes it is financially sound despite not meeting the MPS. True for the Banks and Credit Unions especiallyTrue for the Banks and Credit Unions especially

    33. CBP - Application Charts Award Request D. Activities Level Chart E. Community Development Impact Chart F. Financial Data Input Chart (3 versions) G. Loan Portfolio Quality Chart H. Equity Investment Portfolio Valuation Chart

    34. myCDFIFund Account Applications are submitted through myCDFI An Applicant’s myCDFIFund account is the Fund’s primary mode of communication Applicant’s are REQUIRED to: Create a myCDFIFund account Submit Application Attachments and Signature Page via the account Applicants who already have myCDFI accounts must update their accounts prior to submitting an Application

    35. myCDFIFund Account Download Application from CDFIFund.gov Complete Application Signature Page: Log on to myCDFI account. Click Applications (on left). Choose “2009 CDFI Program (FA) Application” Follow submitting instructions. Upload application as attachments to the Signature Page Remember to print, sign, scan the SF-424 Mandatory – a match between SF 424 and signature pageMandatory – a match between SF 424 and signature page

    36. Review Process

    37. Review Process Completeness Review. Eligibility Review. Two-part Substantive Review. Selecting Official Award Decisions. Grants Management Review. Financial Management Award Obligation. Award notifications. Determine if a complete Application was received by deadlines. Determine if Application meets eligibility requirements. Forward Application for 2-part substantive review. Team of 3 readers experienced in community development evaluate and score CBP on a 100-point scale with certain points assigned for each of the five sections. Highest Ranked Applicants receive Follow-Up Review to determine appropriate award amount based on Phase 1 readers’ comments, base score, and Matching Funds. Score does not change. Performed by single Reviewer (Fund staff). Reviewer may contact Applicant for clarifying information. TA Only Applications are reviewed and scored by a single reviewer. Selecting Official makes award decisions. Grants management reviews award selections to ensure compliance with policies and procedures, federal laws and regulations. Financial management obligates awards. Award notifications (notice of award) expected by September. - FA and FA/TA Applications: Team of three readers score based on evaluation criteria. - TA-Only Applications: One reader scores based on evaluation criteria. Determine if a complete Application was received by deadlines. Determine if Application meets eligibility requirements. Forward Application for 2-part substantive review. Team of 3 readers experienced in community development evaluate and score CBP on a 100-point scale with certain points assigned for each of the five sections. Highest Ranked Applicants receive Follow-Up Review to determine appropriate award amount based on Phase 1 readers’ comments, base score, and Matching Funds. Score does not change. Performed by single Reviewer (Fund staff). Reviewer may contact Applicant for clarifying information. TA Only Applications are reviewed and scored by a single reviewer. Selecting Official makes award decisions. Grants management reviews award selections to ensure compliance with policies and procedures, federal laws and regulations. Financial management obligates awards. Award notifications (notice of award) expected by September. - FA and FA/TA Applications: Team of three readers score based on evaluation criteria. - TA-Only Applications: One reader scores based on evaluation criteria.

    38. Scoring: Compliance Last 2 complete fiscal years from application deadline date under active awards or recently terminated awards will be evaluated. See NOFA for specifics or contact CME. Points will be deducted from overall score, not from a specific section. Any questions, contact the Fund ASAP! Applies to any active award or award that terminated in calendar year 2005 Will consider performance during the Applicant’s two complete fiscal years prior to the Application deadline of January 23, 2006. Prior Awardees or Allocatees applying for FA and/or TA: Assessment of ability to carry out CBP includes evaluation and possible point deductions for: - Noncompliance with any active award or award that terminated in calendar year 2006. - Failure to make timely loan payments to the Fund during two complete fiscal years prior to 10/31/2007. - Overall performance on a prior Agreement. - Deobligated Funds >$200,000 and within the timeframe outlined in the NOFA. Contact the Fund with any questions. Applies to any active award or award that terminated in calendar year 2005 Will consider performance during the Applicant’s two complete fiscal years prior to the Application deadline of January 23, 2006. Prior Awardees or Allocatees applying for FA and/or TA: Assessment of ability to carry out CBP includes evaluation and possible point deductions for: - Noncompliance with any active award or award that terminated in calendar year 2006. - Failure to make timely loan payments to the Fund during two complete fiscal years prior to 10/31/2007. - Overall performance on a prior Agreement. - Deobligated Funds >$200,000 and within the timeframe outlined in the NOFA. Contact the Fund with any questions.

    39. Ranking and Awardee Selection All Applicants: Must receive minimum number of points in each category. Ranked from highest to lowest, based on each Applicant’s cumulative scores for all five criteria categories added together. Applicants are ranked within their own categories: TA-only, SECA, Core. Does Minimum number always mean half of available points?Does Minimum number always mean half of available points?

    40. Application Checklist

    41. Contacting the Fund Programmatic Support: cdfihelp@cdfi.treas.gov or 202.622.6355; option #2 Grants Management Support: grantsmanagement@cdfi.treas.gov or 202.622.8226 Compliance Support: cme@cdfi.treas.gov or 202.622.6330 Technical Support: ithelpdesk@cdfi.treas.gov or 202.622.2455 Legal Counsel Support: See “How to Request a Legal Review” at www.cdfifund.gov The Fund will provide technical support for the electronic application up through the date and time indicated on this slide. As usual, Fund staff will be available to answer questions about the funding program and application process during its normal business hours until the date and time indicated on this slide. To request paper application: paper_request@cdfi.treas.gov or by facsimile to (202) 622-6453. The Fund will provide technical support for the electronic application up through the date and time indicated on this slide. As usual, Fund staff will be available to answer questions about the funding program and application process during its normal business hours until the date and time indicated on this slide. To request paper application: paper_request@cdfi.treas.gov or by facsimile to (202) 622-6453.

    42. FY2010 and Beyond

    43. Technical Assistance (TA) Awards

    44. TA Grants - Purpose A TA Grant allows a CDFI or an entity proposing to become a CDFI to build its capacity to serve its Target Market. TA Grants can be requested to help an entity become certified as a CDFI. TA Grants do not require Matching Funds. The Fund will not make a TA award over this amount, nor will the Fund make an award over the amount requested by the Applicant. This is the capacity building award. Mention the TA booklet Requires documentation & narrative to verify and justify costs. Tell us how it builds capacity.The Fund will not make a TA award over this amount, nor will the Fund make an award over the amount requested by the Applicant. This is the capacity building award. Mention the TA booklet Requires documentation & narrative to verify and justify costs. Tell us how it builds capacity.

    45. TA Grants All uses of TA must support one of the key sections of the Comprehensive Business Plan (CBP) or the Applicant’s ability to meet a CDFI certification requirement (if applicable). TA Award Ceiling: $100,000. The Fund will not make a TA award over this amount. Generally, all TA awards must be used within 2 years. The Fund will not provide funding for the same activities funded by prior awards. Therefore, an Applicant should consider its organizational needs and projected costs carefully in developing the TA award request.The Fund will not provide funding for the same activities funded by prior awards. Therefore, an Applicant should consider its organizational needs and projected costs carefully in developing the TA award request.

    46. Allowable Uses of Funds The Fund meets its Mission & Purpose by providing awards for these purposes… Financial Assistance only available to organizations that the Fund has certified as a community development f.i……(on next slide) Should mention the 85% rule when discussing Financial AssistanceThe Fund meets its Mission & Purpose by providing awards for these purposes… Financial Assistance only available to organizations that the Fund has certified as a community development f.i……(on next slide) Should mention the 85% rule when discussing Financial Assistance

    47. Eligible Uses of TA Professional Services Examples of goods/services: Conduct financial audit Procure information technology services Develop publications Develop policies and procedures for: lending, underwriting, risk management, or personnel Develop a strategic plan Conduct market research or product feasibility analysis Develop job descriptions Develop capitalization plan

    48. Eligible Uses of TA Equipment – some examples Laptops Personal computers Hardware for Internet compatibility Database to manage fundraising and investor relations Portfolio management software Network software

    49. Matching Funds Matching Funds - Only a Category I/SECA Applicant may identify Matching Funds “To Be Raised.” - A Category II/Core Applicant must have all funds “In Hand” or “Committed.” - Only a Category I/SECA Applicant may identify Matching Funds “To Be Raised.” - A Category II/Core Applicant must have all funds “In Hand” or “Committed.”

    50. Matching Funds Matching Funds are required for all FA awards. TA does not require Matching Funds Three categories of Matching Funds: In-Hand Firmly Committed To Be Raised - Only a Category I/SECA Applicant may identify Matching Funds “To Be Raised.” - A Category II/Core Applicant must have all funds “In Hand” or “Committed.” - Only a Category I/SECA Applicant may identify Matching Funds “To Be Raised.” - A Category II/Core Applicant must have all funds “In Hand” or “Committed.”

    51. Matching Funds Must be comparable in form: grant to grant, loan to loan. Fund does not match in-kind contributions. Fund can match Retained Earnings with grant. Must be comparable in value: $1 to $1. Must be from non-Federal sources. Must not have been used to match another Federal program. Must be disbursed or committed to the Applicant (not an affiliate). Comparable Form: Matching Funds must be at least comparable in form and value to the FA award provided by the Fund. E.g., if an Applicant seeks a grant, the Applicant must obtain Matching Funds through grants from non-Federal sources that are at least equal to the amount requested from the Fund. For loans or Deposits, the terms will be matched by the Fund to the extent possible and in the sole discretion of the Fund. E.g., if requested award is a 10-year loan at 2% interest, with interest only payments, the Applicant present match with same terms. If several loans with different terms and rates are used as Match, the Fund will calculate a blended term and rate of the loan portion of the Fund’s FA award. Non-Federal Source: Matching Funds must come from sources other than the Federal government and, regardless of the source, consist of non-Federal funds. CDBG and other funds provided pursuant to the Housing and Community Development Act of 1974 are considered Federal government funds and cannot be used as Matching Funds. Previously Used Matching Funds: Funds used by an Applicant as Matching Funds for a prior award under the CDFI Program or under another Federal grant or award program cannot be used to satisfy the Matching Funds requirement for this FA request. If an Applicant seeks to use as Matching Funds, monies received from an organization that was a prior Awardee under the CDFI Program, the Fund will deem such funds to be Federal funds, unless the funding entity establishes, to the reasonable satisfaction of the Fund, that such funds do not consist, in whole or in part, of CDFI Program funds or other Federal funds. An Applicant using Matching Funds from an Affiliate entity must be able to demonstrate that the Affiliate entity received the same amount from an eligible, non-Affiliate source within the eligible Matching Funds window, described above. Comparable Form: Matching Funds must be at least comparable in form and value to the FA award provided by the Fund. E.g., if an Applicant seeks a grant, the Applicant must obtain Matching Funds through grants from non-Federal sources that are at least equal to the amount requested from the Fund. For loans or Deposits, the terms will be matched by the Fund to the extent possible and in the sole discretion of the Fund. E.g., if requested award is a 10-year loan at 2% interest, with interest only payments, the Applicant present match with same terms. If several loans with different terms and rates are used as Match, the Fund will calculate a blended term and rate of the loan portion of the Fund’s FA award. Non-Federal Source: Matching Funds must come from sources other than the Federal government and, regardless of the source, consist of non-Federal funds. CDBG and other funds provided pursuant to the Housing and Community Development Act of 1974 are considered Federal government funds and cannot be used as Matching Funds. Previously Used Matching Funds: Funds used by an Applicant as Matching Funds for a prior award under the CDFI Program or under another Federal grant or award program cannot be used to satisfy the Matching Funds requirement for this FA request. If an Applicant seeks to use as Matching Funds, monies received from an organization that was a prior Awardee under the CDFI Program, the Fund will deem such funds to be Federal funds, unless the funding entity establishes, to the reasonable satisfaction of the Fund, that such funds do not consist, in whole or in part, of CDFI Program funds or other Federal funds. An Applicant using Matching Funds from an Affiliate entity must be able to demonstrate that the Affiliate entity received the same amount from an eligible, non-Affiliate source within the eligible Matching Funds window, described above.

    52. Matching Funds Using Retained Earnings As Matching Funds: Matched as a Grant. Complete the Retained Earnings Chart (Chart B1, B2, or B3 depending on organization type). For Credit Unions using Since Inception: Need to show growth of shares or loans equal to 25% of requested FA Award between December 31, 2007 and December 31, 2008, as demonstrated by the NCUA report.

    53. CDFI Fund James Yagley Advisor, CDFI Programs yagleyj@cdfi.treas.gov

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