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News from Rapoza Associates November 9, 2011
Congress Working to Wrap-Up Fiscal 2012 Spending Bills
Six weeks into Fiscal Year (FY) 2012 and Congress is hoping to send its first full-year FY 2012 spending bill to the President’s desk...soon.
The Senate passed the first of what will be a series of FY 2012 “minibus” appropriations bills last week. This first minibus (HR 2112) included 3 of the 12 annual appropriations bills: Agriculture; Transportation and Housing; and Commerce, Justice, and Science. Immediately after the Senate voted last week a Conferees Committee of House and Senate appropriators was organized and the committee is expected to have a conference report on the first minibus ready for floor action next week when both the House and Senate are in session. The conference report on HR 2112 will likely become the vehicle for a second continuing resolution (CR) since the current CR expires on November 18th . The second CR will likely keep federal agencies operating through mid-December at the FY 2011 enacted funding level.
The Senate will take up the second FY 2012 minibus tomorrow. Like the first minibus, this bill combines three FY 2012 spending bills reported out the Senate Appropriations Committee including Energy and Water; Financial Services and General Government, and Foreign Operations bills. The senate is scheduled to take up the bill tomorrow and debate will continue into next week.
Analysis of New CDFI Fund FA Application
The CDFI Fund FA/TA program NOFA and application were released on November 3.
December 14 is the due date for BOTH Material Events form and new CDFI Certification applications. Mark your calendars! The funding application due date is January 11, 2012.
The Fund indicates that, subject to appropriations, it will make approximately $123 million available in FA or TA awards. The maximum award amounts for FA and TA remain the same as in the past,($2 million CORE, $600,000 SECA and $100,000 for TA). However, the maximum HFFI award will be $3.5 million in FY 12, and like last year, the application will be released after the FA application is submitted. Comparing the proposed funding to last FY 11:
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FY 2011 (actual) (millions)
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FY 2012 (NOFA) (millions)
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Total
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$142
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$123
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CORE
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$122
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$105
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SECA
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$17
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$15
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TA
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$3
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$3
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HFFI
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$25
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$25
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.
Matching Funds: This year the President’s budget did not propose a waiver of the dollar for dollar Matching Funds requirement. This waiver, plus a waiver of the $5 million cap, discussed below, are not in the House bill, but they are in the Senate bill. This is the same situation we were in last year, but this year the Fund is taking a different approach to Matching Funds. Last year applicants were allowed to submit an application without Matching Funds, and the Fund indicated that if the waiver was not passed, applicants would have 30 days to submit Matching Funds documentation. This year, evidence of Matching Funds must be submitted with the application on the January 11, 2012 due date. Applicants (whether CORE or SECA), must have Matching Funds in hand, or legally committed, equal to 25% of the requested award.
$5 Million/3-Year Cap: This year the President’s budget did not propose a waiver of the $5 million cap. The Fund notes that the $5 million/3-year award cap has been waived the past 3 years, and accordingly the Fund will not count awards made the last 3 years in calculating the $5 million cap. However, unless waived again this year, it is possible that an applicant could receive $5 million in total funding (FA plus HFFI) in this FY 12 round that could effectively make them ineligible for funding for the next 2 years.
Grants.gov: The Fund has moved all the narrative and charts into a Grants.gov form, found here, and accessible by going to www.grants.gov, and then putting in the Federal Catalog number 21.020. The SF 424 and all attachments will be sent using the grants.gov platform. The application will pre-populate certain fields based on the SF 424, and you can save the document as you go along. When finished you must validate that you have checked for errors and then use the save and submit button. Each applicant must also register, or ensure that its registration is renewed, in the Central Contactor Registry.
It is recommended that you complete your narratives in Word and then cut and paste them into the PDF. This year there are character limits, rather than page limits, and the narrative boxes won’t accept text beyond the character counts. Bold and underlined text is not permitted. Charts lose their formatting if pasted into the new text boxes.
Comments on CDFI Fund FA Application Substance:
Priority Points: There are now up to 4 priority points based on committing to serve up to 50 census tracts. The listing of all census tracts and the points, based on unemployment, poverty and area median income, are included in the application materials on the Fund’s website. The Fund indicates that awardees will be required to deploy an amount equal to their award in one or more selected census tracts. Applicants are not required to designate priority census tracts, and the Fund notes that.
The substance of the application is nearly identical to the FY 2011 application, with a few exceptions. The charts are all in the grants.gov document and run from A to Q. A list of the new charts is below.
- In Q2 (High Impact Narrative), the fifth bullet point regarding impacts in the Target Market has been dropped.
- New Q 3 incorporates the TA Budget Request that was previously in a separate application.
- Q 4 is now the Target Market needs question which has minor wording changes. The Distress Indicator Census Tracts are on the Fund’s website. If you are selecting 7 or fewer census tracts, you should put that information in the D chart in the grants.gov PDF. If you are selecting more than 7 census tracts, you should fill out and attach the Table D found on the Fund’s website.
- Q5a is now the question about your Financial Products or Financial Services, and the example of prior borrowers has been dropped. Q 5b asks about your development services. It has added a bullet asking you to “Discuss the extent to which your efforts will be part of, and contributing to, an area’s broader neighborhood revitalization strategy. “
- Q 6a is the question regarding demand for your financial products or services. All of last year’s Q 7 has now become Q 6b. There are small changes, such as dropping the question about key vacancies, adding a discussion on key staff, and asking that you discuss your organization’s goals for the next 5 years.
- The projections are 3 years back, the current year, and 5 years forward, not the traditional 3 years forward we have seen in the past. Both the J Table (Financial Activities), and the M Table (Financial Data Input) ask for 5 years of projected activity.
- Note that within the grants.gov PDF there is another Q 7 regarding whether you have failed 2 MPS, had an unqualified opinion, or been subject to a corrective action by a regulator. If you answer yes to any of those questions a text box will open and you have 5,000 characters to respond.
Tables: Note that you cannot cut and paste into these tables from Excel or Word 2010. The Fund has indicated that most of the charts are carried over from FY 2011, and the substance of the charts (other than the additional 2 year on J and M) of those has not changed. There are a couple of new charts, noted below:
Table A: TA Budget Worksheet
Table B: Other Applications with the CDFI Fund by Applicant or Affiliates (new chart)
Table C: Prior Fund Awards (10 most recent)(new chart)
Table D: Score for Quantitative Baseline / Economic Distress (on Fund website)(new chart)
Table E: Customer Profile (same)
Table F: Matching Funds Summary, the Matching Funds Documentation Cover Sheet (on Fund website)(same)
Tables G1, G2, and G3: Retained Earnings Calculator(same)
Table H: Financial Products Rate Sheet (same)
Table I: Financial Services Rate Sheet (same)
Table J: Financial Activities Level Chart (same)
Table K: Board Summary Information (five entry limit)(similar)
Table L: Staff Summary Information (five entry limit)(similar)
Table M1, M2, & M3: Financial Data Input Charts (same)
Table N1, N2, N3: MPS Charts (same)
Table O: Loan Portfolio Quality (same)
Table P: Loan Loss Reserves and Write-Offs (same)
Table Q: Equity Investment Portfolio Valuation(same)
Pleae visit the CDFI Fund's website for more on the NMTC Program.
(Analysis prepared by Linda Davenport)
Rapoza Associates
www.rapoza.org
email: rapoza@rapoza.org
phone: 202-393-5225
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