The CDFI Fund tentatively plans on opening the next funding round for the Capital Magnet Fund in June of 2017, with estimates of up to $120 million in available funding. $92.47 million was awarded in last year’s funding round.

On May 10, the CDFI Fund held an informational conference call regarding the CMF, that presentation is now available online. The CDFI Fund has also provided the following list of eligible activities within the CMF:

  • An Affordable Housing Fund can be capitalized with a CMF Award. Combined with other public and private funds, an Affordable Housing Fund can be used to make loans, grants, or equity investments in Affordable Housing.  The type of financing which may be offered from the Affordable Housing Fund varies and can be either short- or long-term in nature. For example, an Affordable Housing Fund may be used for predevelopment lending; construction loans; or permanent financing for rental housing, down payment loans, or subordinate mortgages for homeownership.
  • A Revolving Loan Fund can be capitalized with a CMF Award. A revolving loan fund is usually a pool of funds that is used to make loans for either Affordable Housing and/or Economic Development Activities. Revolving loans tend to be short term in nature and usually are intended to be re-paid so that the loan proceeds can be used to provide additional loans.
  • A CMF Award can be used to create Loan Loss Reserves, which are funds set-aside to cover losses on loans, in the form of cash reserves, or through accounting-based accrual reserves. This financing tool can help developers incur debt for riskier projects, or reduce the cost of debt used to finance development.
  • Risk-sharing loans can also be made using a CMF Award. These are loans in which the risk of default is shared by the CMF Recipient and other lenders (e.g., top loss or participation loans). These types of loans can provide access to financing that is not readily available for affordable housing development, particularly in distressed areas.
  • Loan Guarantees can be made with a CMF Award to repay all or a portion of a loan in case of default by the borrower. Loan Guarantees also help to provide access to financing that is not readily available for Affordable Housing Activities, particularly in distressed areas.
  • CMF Awards can also be used to capitalize an Economic Development Activities Fund, which can be used to finance the development, preservation, acquisition and/or rehabilitation of buildings that house businesses or Community Service Facilities (e.g., health clinics). CMF-financed Economic Development Activities must be part of a community Concerted Strategy and in proximity to Affordable Housing.