To become a Certified CDFI, an Applicant must demonstrate that it serves at least one eligible Target Market (either an Investment Area or a Targeted Population) through its Financial Products and/or Financial Services activity (see Question 43 of this FAQ) in its proposed Target
Markets. In addition, it must direct at least 60% of both the number and dollar volume of arm’s-length, on-balance sheet Financial Products to one or more eligible Target Market(s). To confirm activity to the Target Market, transaction level data will be submitted annually through the Transaction Level Report (TLR)8.
All Applicants must meet the applicable Target Market percentage benchmarks as stated above or as described in Question 48 of this FAQ for certain Investment Areas. If an Applicant falls below the required level for any of the applicable Target Market percentage benchmarks, it will not be eligible for CDFI Certification.
To meet the Target Market requirements, an Applicant may serve multiple eligible Target Market types. (For example, an Applicant may demonstrate compliance with the Target Market percentage benchmarks by serving both an Investment Area and one or more Targeted Populations). However, for the purposes of calculating the overall Target Market percentage of an Applicant’s activity, each Financial Product transaction or Financial Service item shall be counted towards only one Target Market component (even if the transaction or account qualifies
as having been directed to more than one Target Market component), via the ‘Designated Target Market Type’ data point within the TLR.
NOTE: The benchmarks must be met without any rounding of decimal points, i.e., 59.9% will not be rounded to 60% for Certification purposes.
8 For the purpose of the CDFI Certification Application, all references to the Transaction Level Report include the abbreviated TLR (for entities that are not CDFI Fund Financial Assistance [FA] award recipients with a TLR reporting requirement) and the full-length TLR (for entities that are recipients of CDFI Fund Financial Assistance [FA] awards with a TLR reporting requirement).