Planning to Apply for CDFI Certification? What You Need to Know to Avoid a Six-Month Delay
The Community Development Financial Institutions (CDFI) Fund is preparing to launch its revised CDFI certification application and reporting requirements. As a result, the CDFI Fund will pause the acceptance of new CDFI certification applications and requests for target market modifications for six months, from Oct. 1. 2022, through April 3, 2023.
The revised CDFI certification application, annual certification and data collection report (ACR), and updated methods for collecting transactional level data from certified CDFIs will be released in the coming weeks for a second round of public comment by the Office of Management and Budget. This will be the last opportunity for public input before the revised CDFI certification application and reporting requirements are implemented April 3, 2023. Novogradac will post the CDFI Fund’s announcement when the revised materials become available for public comment.
The new CDFI certification application will be in effect April 3, 2023, for organizations applying for CDFI certification. Meanwhile, existing CDFIs will have a one-year grace period to comply with the new CDFI certification criteria.
CDFI certification is a designation given by the CDFI Fund to specialized organizations that provide financial services in low-income communities and to those who lack access to financing. Obtaining a CDFI certification allows organizations to apply for funding through various programs at the CDFI Fund. Being certified also serves as a qualifier to access certain other federal government programs.
In May 2020, the CDFI Fund requested public comment on the application and reporting requirements for CDFIs. At that time, the CDFI Fund undertook an extensive review and comment period on its CDFI certification requirements to ensure that its policies and procedures continue to meet statutory and regulatory requirements. The CDFI Fund revised the CDFI certification application, as well as the ACR, and introduced the collection of transactional level data from all certified CDFIs.
What to Know During this Time of Transition
Between Oct. 1. 2022, and April 3, 2023, CDFIs will be required to be in good standing with respect to their certification status. The CDFI Fund will review by April 3, 2023, all currently pending CDFI certification applications and target market modification requests as well as all new applications and target market modification requests submitted before Oct. 1, 2022. Organizations in the process of applying for CDFI certification or that intend to apply will have until 11:59 p.m. ET on Sept. 30, 2022, to submit CDFI certification applications or target market modification applications through the Awards Management Information System. On the other hand, organizations wishing to apply for CDFI certification, or to modify their target markets after Oct. 1, 2022, must apply after April 3, 2023, using the new CDFI certification application.
It’s important to note that this pause does not affect the submission of reports required by the Office of Compliance Monitoring and Evaluation. Organizations must remain in compliance with all outstanding CDFI Fund awards. This includes CDFI/NACA Program financial assistance and technical assistance, Bank Enterprise Award Program, Small Dollar Loan Program, Capital Magnet Fund and Rapid Response Program awards, new markets tax credit allocations, or CDFI Bond Guarantee Program reporting requirements.
Novogradac can assist CDFIs to determine how these plans affect them, specifically. To learn more, reach out to a Novogradac professional.