CDFI Fund Announces “Cure Period” and Additional Guidelines for Recertification Applications

The CDFI recently released additional guidance on the review process for applications submitted as part of a major recertification process announced earlier this year.  The CDFI Fund’s mandatory recertification guidelines affect more than 700 certified CDFIs whose original or last date of CFDI certification occurred at least three years ago.

The new FAQ addresses a number of issues about the overall review process as well as its impact on CDFIs that submitted applications as part of the FY 2013 FATA and NACA funding rounds.  Most notably, the FAQ discusses the CDFI Fund’s follow up procedures as well a “cure period” that will allow some applicants to remedy certain deficiencies in their application without loss of certification status.

In terms of the CDFI Fund’s follow up protocol:

“The CDFI Fund will, during its recertification application review, make at least one contact to any applicant whose application is deficient of materials needed to make a certification determination and establish a reasonable period of time during which supplementary or clarifying documentation is needed from the applicant to proceed with certification determination.”

In regards to the cure period:

“The CDFI Fund, in its sole discretion, may allow a CDFI whose recertification application has a deficiency in one or more criteria for certification the opportunity for a period of time to cure the deficiency without loss of its certification. This cure period will only be granted if the CDFI Fund believes the recertification deficiency can be remedied in the allotted time period.”

However, not all deficiencies will be granted a cure period:

“Deficiencies that do not warrant a cure period may include the following, among others: inability to demonstrate legal status at time of application; inability to demonstrate primary mission of community development; and evidence of government affiliation or control.”

Finally, FY 2013 FATA and NACA applicants that are offered a cure period or are decertified as part of the CDFI Fund’s current recertification efforts will not be eligible to receive an award under this funding round.  While the cure period will have no effect on existing awards, a CDFI that is decertified may be found to be default of existing award agreements.

We are encouraged to see that the CDFI Fund is actively working with certified CDFIs to provide them with an opportunity to provide additional information and clarification, which we believe will make for a fair and informed recertification process.  The CDFI Fund has indicated that the review process is currently under way and application reviewers have been reaching out to CDFIs in the event that follow up is needed.  If your organization has any concerns about the status of its recertification application, FUND encourages you to contact the CDFI Fund directly.