CDFI Fund Announces Interim Rule on the CDFI Bond Guarantee Program

The CDFI Fund has released the long-anticipated interim rule on the CDFI Bond Guarantee Program.  The interim rule was published in the Federal Register on Tuesday, February 5 and the CDFI Fund seeks public comment on the rule through April 8, 2013, at which time the rule will go into effect.

The CDFI Bond Program was originally established by the Small Business Jobs Act of 2010 and directs the Treasury Department to guarantee the full amount of bonds or notes issued to support CDFIs that make investments for eligible community or economic development purposes.  The bonds or notes will support CDFI lending and investment by providing a source of low-cost, long-term capital to CDFIs.

The Treasury may guarantee up to 10 bonds per year, each at a minimum of $100 million, but the total of all bonds cannot exceed $1 billion per year; the program is currently authorized through fiscal year 2014.  Eligible uses of the bond or note proceeds include various uses of financial assistance authorized under the Riegle Act, as well as the provision of community or economic development in ‘‘low-income or underserved rural areas’’ (complete definitions of eligible uses can be found in the rule).

Many FUND Consulting clients are pleased to see that implementation is moving forward, and we look forward to seeing the Bond Program deliver on its promise of injecting new and substantial capital into low-income and underserved communities.  If your CDFI is interesting in learning more about the Bond Program, a copy of the presentation from the information sessions held last month is now available on the CDFI Fund’s website.  Additionally, the CDFI Fund will be holding a series of application workshops and webinars in the coming months.

How would the Bond Program impact your CDFI?  Does your organization plan to participate in the program?