On July 18, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) opened the Fiscal Year (FY) 2018 funding round for the Capital Magnet Fund (CMF). The CDFI Fund this year will award approximately $142 million to CDFIs and qualified nonprofit housing organizations to finance affordable housing activities, related economic development activities and community service facilities. Awardees must spend at least 70 percent of their award on affordable housing activities and may utilize the funds to create financing tools such as loan loss reserves, revolving loan funds, risk-sharing loans, and loan guarantees.
The Notice of Funds Availability (NOFA), instructions, and supplemental materials for the FY 2018 round can be found on the CDFI Fund website. Interested parties must file an Application for Federal Assistance (SF-424) form by August 20 at 11:59 PM ET and complete the CMF application by September 17 at 5:00 PM ET. The CDFI Fund expects to announce awards in winter 2019.
CMF funding comes from assessments on Fannie Mae and Freddie Mac using a formula based on the total principal of new loans they insure each year. The money from these assessments is split between the CMF and the National Housing Trust Fund (HTF). The FY 2018 CMF awards are financed by Fannie Mae’s and Freddie Mac’s allocations from calendar year 2017.
The CDFI Fund was forced to delay opening the 2018 CMF Application Round after the White House proposed to rescind $10.45 billion in budget authority, including the $142 million from CMF. These funds were impounded until the Senate rejected the rescissions package at which time the funds were released back to the relevant agencies to be obligated.
Last year, the CDFI Fund awarded $120 million in CMF funding to five state Housing Finance Agencies (HFAs) and 35 other recipients. The HFA awardees included Colorado Housing and Finance Authority, New Mexico Mortgage Finance Authority, Pennsylvania Housing Finance Agency, Rhode Island Housing, and Wisconsin Housing and Economic Development Authority. For more information on these awards, please see NCSHA’s earlier blog.