The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) released a revised Community Development Financial Institution (CDFI) Certification Application Frequently Asked Questions (FAQs) document, Pre-Approved Target Market Assessment Methodology guidance, and an adjusted CDFI Certification Application timeline today. 

The FAQs and guidance supersede those published December 07, 2023, by adding, revising, or updating select questions from the earlier editions. Noteworthy updates cover:

• Inclusion of home equity lines of credit (HELOCs) to the list of exceptions for mortgage loans that satisfy the responsible financing standards.
• Addition of two new Target Market methodologies—
  • Housing Unit Income Restrictions, which allows for an assessment based on income restrictions on any financed housing units.
  • Legal Guardianship/Caretaker, which allows for an assessment based on an individual’s status as legal guardian or caretaker of a person with a disability.
• Date change for when an Applicant serving a non-metropolitan Customized Investment Area (CIA) (or non-Metro County or parish Investment Areas) must begin to direct at least 85% of its financing activity within qualified census tracts of the CIA (in order for non-qualifying activity to count towards the 60% Target Market benchmark).
• Timing for when a CDFI must begin abiding by new pre-approved Target Market Assessment Methodologies.
• Types of Information that an Applicant should include to explain why they do not consider a borrower’s ability to pay back a loan for any of its covered mortgage, consumer, or small business loan products.
• Guidance on demonstrating how certain overdraft programs or nonsufficient funds (NSF) fees may still be consistent with a community development mission.
• Information on loan purchases and loan participations.
• Replaced census tract as the comparison geographic area used to determine whether an individual’s income adjusted for family size qualifies as Low-Income impacting the assessment methods for Low-Income Targeted Population (LITP), including the CDFI Fund’s Low-Income Calculator.

Additionally, the CDFI Fund is also publishing the CDFI Certification Agreement template. Successful CDFI Certification Applicants will be required to sign and be subject to the terms and conditions within the Agreement in order to maintain their status as a Certified CDFI.

Please review the FAQs and CDFI Certification Agreement template in the Related Materials section below for a complete explanation of updated guidance information. Complete and updated guidance information can also be found on the CDFI Fund’s website at www.cdfifund.gov/cdficert under Step 2: Apply.

Early Submission Timeline 
To accommodate the release of the amended FAQs, the CDFI Fund is making an adjustment to the early reapplication submission window. Organizations that previously notified the CDFI Fund they wished to apply before the general recertification application deadline, will now reapply for CDFI Certification between October 28, 2024, and January 6, 2025. As previously indicated by the CDFI Fund:

• Early applicants whose applications are declined and therefore are not recertified will remain in a grace period and retain Certification through December 31, 2025, but must submit a new CDFI Certification Application by December 31, 2025, to remain Certified.
• Early applicants that choose not to apply during the revised early reapplication window must submit their applications according to the general reapplication deadlines outlined in the following General Reapplication Submission Deadlines chart.
• All other currently Certified CDFIs must submit their reapplication in the Awards Management Information System (AMIS) by the general reapplication deadlines. No additional grace periods or extensions will be granted to CDFIs that miss the revised deadline. 

General Reapplication Submission Deadlines
All currently Certified CDFIs must reapply for CDFI Certification following the submission schedule provided below, which remains unchanged since it was published on June 20, 2024. Organizations that do not submit an Application by 11:59 pm Eastern Time (ET) on their appointed deadline will lose their CDFI Certification.

General Reapplication Submission Deadlines, by FYE Date

Until their submission due date, currently Certified CDFIs will: 1) retain their status as Certified CDFIs; and 2) remain eligible to apply for all CDFI Fund programs where CDFI Certification is an eligibility requirement—provided they abide by Annual Certification and Data Collection Report (ACR) requirements and have no material event affecting their CDFI Certification status. After submitting their revised CDFI Certification Application, CDFIs will retain their Certified status unless notified otherwise by the CDFI Fund.

Questions

Questions regarding the:

• CDFI Certification Application should be directed to the Office of Certification Policy and Evaluation (OCPE) via an AMIS Service Request (preferred), or by email to ocpecert@cdfi.treas.gov.
• ACR and Transaction Level Report should be directed to the Office of Financial Strategies and Research (FS&R), via an AMIS Service Request (preferred), or by email to CDFI-FinancialStrategiesandResearch@cdfi.treas.gov.

Related Materials

• Frequently Asked Questions: CDFI Certification Application and Related Tools 
  (Updated September 6, 2024)
• CDFI Certification Agreement Template
  (Released September 6, 2024)
• Pre-Approved Target Market Assessment Methodologies 
  (Updated September 6, 2024)
• Quick Facts for Currently Certified CDFIs 
  (Updated September 6, 2024)

All CDFI Certification Application guidance materials and resources can be found on the CDFI Fund’s website at www.cdfifund.gov/cdficert under ‘Step 2:Application Process’.