If a CDFI fails to deliver at least 85% of its financing activity within the individually qualified census tracts of a Metro customized Investment Area or, prior to October 1, 2027, at least 75% (and at least 85% beginning October 1, 2027) within the individually qualified census tracts of a non-Metro customized Investment Area or county-wide or parish-wide Investment Area, it will still be able to treat the activity within the individually qualified census tracts of the respective geography as Investment Area Target Market activity, but will not be able to recognize the activity within non-qualified tracts as such. In such situations, the CDFI may still retain CDFI Certification if that CDFI’s customized Investment Area and/or county or parish Investment Area activity – in combination with activity to any other of the CDFI’s Target Market components – meets the 60% Target Market threshold necessary for CDFI Certification.
If a CDFI has started a TLR and discovers that it does not meet the threshold requirements to count the non-qualifying census tract financing activity for any of its customized Investment Areas or non-Metro county or parish Investment Areas, it will need to go back into the uncertified TLR and retag any transactions in qualified tracts of that geography as “IA—Pre-qualified” instead of ”IA-Customized,” “IA-Non-Metro Customized,” or “IA-Non-Metro Counties/Parishes” for the “Designated Target Market Type” data field in order to still count that activity towards its Target Market benchmarks. In such cases, transactions in non-qualified tracts may still be recognized as Target Market activity if tagged as “LITP” or one of the various “OTP” types based on a determination using one of the pre-approved Target Market assessment methodologies. If a transaction cannot qualify for a Target Market component, then it should be tagged as “Non-Target Market.”
The process will be slightly different for the Consumer Loans TLR involving regulated entities. For the Consumer Loans TLR, the number and dollar amount of the transaction(s) needs to be removed from Investment Area data fields and added to the data fields for LITP or OTP if appropriate or not included for any Target Market component data field at all.