The Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) requests public comments on how it can enhance and improve the impact of the Capital Magnet Fund (CMF), streamline or minimize the administrative burden on CMF Applicants and Award Recipients, as well as safeguard public funds. Information provided in response to this Request for Information (RFI) will inform the CDFI Fund’s development of program policies and administrative practices that better support the activities of CMF Recipients to spur investment in affordable housing and related economic development efforts that serve Low-Income Families and communities.
Established by the Housing and Economic Recovery Act of 2008 (HERA; Pub. L. 110-289), CMF awards provide funds to Certified CDFIs and non-profit organizations through a competitive grant program administered by the CDFI Fund. The primary purpose of the CMF program is to attract capital, particularly private capital, to economically distressed areas, including underserved rural areas, to finance and support affordable housing and economic development activities.
Awards made under the CMF program can be used to finance affordable housing activities, related economic development activities and community service facilities. Funding for the CMF comes from allocations made by the Government-Sponsored Enterprises Fannie Mae and Freddie Mac and varies from year to year. CMF awards must be used to leverage housing and economic development investments at least ten times the size of the award amount. Recipients are able to utilize CMF awards to create financing tools such as affordable housing loan funds, loan loss reserves, revolving loan funds, risk-sharing loans, and loan guarantees. While CMF is primarily focused on increasing affordable housing, CMF Award Recipients may use up to 30% of CMF award funds to finance economic development activities linked to affordable housing.
In order to ease program administration, reduce Applicant and Award Recipient burden, and maximize the impact of the program to create and preserve affordable housing across the country, the CDFI Fund is assessing opportunities to make improvements to the CMF program. Feedback collected through this RFI will be considered and used to inform potential revisions to the CMF program.
Specifically, the goals of this RFI are to:
- clarify terms, concepts, and requirements of the CMF program to improve CMF Recipients’ understanding of their obligations and requirements under the program;
- ensure CMF program requirements adequately address activities and current business practices in the affordable housing industry;
- identify opportunities to reduce the burden of administering CMF awards while ensuring accountability;
- identify opportunities to better align the CMF program with the rules, terms, practices, and definitions of other significant federal funding sources for affordable housing, as a way to facilitate compatibility and reduce CMF Recipient burden; and
- determine how the CMF program can better promote and incorporate complementary policy priorities such as economic development linked to affordable housing and homeownership.
Comments must be submitted by September 5, 2023 via the Federal eRulemaking Portal, www.regulations.gov. For questions, contact Andrew Schlack, Program Manager, Capital Magnet Fund, CDFI Fund, 1500 Pennsylvania Avenue NW, Washington, DC 20220, or by email at cmf@cdfi.treas.gov, and include “CMF RFI” in the subject line of the email.
Related Materials:
- Federal Register Notice: Notice and Request for Information