The Capital Magnet Fund (CMF) awards competitive grants to community development financial institutions (CDFIs) and other organizations to develop affordable housing and other projects. Administered through the federal CDFI Fund, the CMF was established as a permanent trust fund in the Housing and Economic Recovery Act of 2008. The Congressional Budget Office estimates that the CMF will receive approximately $226 million annually between FY 2010-2018. However, Fannie Mae and Freddie Mac were supposed to provide a large portion of that funding and since those contributions were suspended indefinitely in late 2008, the actual sum will likely be reduced unless Congress authorizes alternative sources of funding. The FY 2010 budget passed by Congress provided $80 million.
Capital Magnet Fund grants can be used for a wide variety of affordable housing and economic development projects, including the development, preservation, rehabilitation, and purchase of housing for low-income families. The grants may also be used for economic development activities that stabilize low-income areas or underserved rural areas, including day care centers, workforce development centers, and health care centers. Additionally, grants may be used to provide loan loss reserves, to capitalize a revolving loan or to capitalize an affordable housing fund.
Treasury-certified Community Development Financial Institutions or non-profits that incorporate the development or management of affordable housing as part of their mission are eligible for grants. The selection is a competitive process that includes four main factors. First, the CDFI Fund aims to make grants to geographically diverse areas, with the goal of serving all 50 states. Second, a single grantee may only receive up to 15 percent of the total available funds in a single round. Third, a grantee must leverage the award by ten times the grant amount. Finally, grant funds must be committed for use within two years of allocation.
Links:
- The CDFI Fund's official overview of the CMF is available here: www.cdfifund.gov/what_we_do/programs_id.asp?programID=11
Further information on the CDFI Fund is available here:
www.cdfifund.gov - The National Low Income Housing Coalition provides a good overview of the CMF, available here:
(link no longer active) - The Opportunity Finance Network ("OFN") is a network of private financial intermediaries that work with projects focused on low-income persons, including CFDI Fund projects. The OFN website is available here: http://www.opportunityfinance.net/#2