Since its inception in 2008, the Capital Magnet Fund (CMF) has awarded nearly $1.1 billion in funding to create and preserve affordable housing for Low-Income families and economically distressed communities. Through the program, the Community Development Financial Institutions Fund (CDFI Fund) awards competitive grants to Certified Community Development Financial Institutions (CDFIs) and non-profit housing organizations to develop, rehabilitate, preserve, and purchase affordable housing, particularly housing targeted to Low-, Very Low-, and Extremely Low-Income families.
Resources provided by CMF have played an important role in leveraging private and public capital to finance a substantial number of affordable housing units. At the end of fiscal year (FY) 2022, CMF Award Recipients had collectively financed the completion of 37,650 affordable rental housing units and more than 5,500 affordable homeownership units and leveraged an additional $7.9 billion in capital (including $6.7 billion in private capital). Roughly two-thirds of all CMF-financed units are location in Areas of Economic Distress1 or High Housing Need Areas2.
There is even more predicted to come. Over 52,000 units of additional affordable rental housing units are either under development or construction and will be completed in the next few years.3
Over the past seven rounds of the CMF program, the CDFI Fund has learned how vital these resources are and the positive impact the program has in financing much needed affordable housing. The CDFI Fund has also learned that there may be ways for the CMF program to improve outcomes, reduce burden on CMF Applicants and CMF Award Recipients, and to be more responsive to changing market dynamics and trends in the affordable housing field.
To this end, the CDFI Fund recently published a Request for Information (RFI) in the Federal Register asking for input on a variety of subject areas related to CMF program operations, priorities, and compliance. Specifically, the CDFI Fund is seeking information on subject matters such as:
- aligning CMF with other federal affordable housing assistance programs;
- CMF Award commitment deadlines;
- CMF leverage requirements;
- program income, loan loss reserve and loan guarantee rules;
- manufactured housing, assisted living, and economic development activity guidelines; and
- homeownership purchase price limitations.
Comments are due September 5, 2023. CDFIs, non-profit housing organizations, as well as affordable housing stakeholders are all encouraged to review the RFI and provide comments that could be vital in setting the future path of this key affordable housing finance program.
Andrew Schlack is the Program Manger for the Capital Magnet Fund
1 An Area of Economic Distress is a census tract: (a) Where at least 20% of households that are Very Low-Income (50% of AMI or below) spend more than half of their income on housing; or (b) that are designated Qualified Opportunity Zones under 26 U.S.C 1400Z–1; or (c) that are Low-Income Housing Tax Credit Qualified Census Tracts; or (d) where greater than 20% of households have incomes below the poverty rate and the rental vacancy rate is at least 10%; or (e) where greater than 20% of the households have incomes below the poverty rate and the homeownership vacancy rate is at least 10%; or (f) are Underserved Rural Areas, as defined in the CMF Interim Rule (as amended February 8, 2016; 12 C.F.R. Part 1807)
2 A High Housing Need Area is a census tract that either: (a) has Very Low-Income renters paying more than half their income for rent; (b) are high poverty neighborhoods with high vacancy; or (c) are Underserved Rural Areas, as defined in 12 C.F.R. § 1807.104. Note that “Area of Economic Distress” replaced “High Housing Need Area” beginning with the FY 2017 CMF funding round.
3 CDFI Fund, Agency Financial Report, Fiscal Year 2022,
https://www.cdfifund.gov/sites/cdfi/files/2023-01/CDFI_Fund_FY22_AFR_FINAL508.pdf
