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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

April 2009: 

New Markets Tax Credit: 

Minority Entities Are Less Successful in Obtaining Awards Than Non-
Minority Entities: 

GAO-09-536: 

GAO Highlights: 

Highlights of GAO-09-536, a report to congressional requesters. 

Why GAO Did This Study: 

The Community Development Financial Institutions (CDFI) Fund in the 
Department of the Treasury has awarded $19.5 billion of the $26 billion 
in New Markets Tax Credits (NMTC) it is authorized to award through 
2009 to encourage investment in low-income communities. The NMTC allows 
investors to claim a tax credit in exchange for investing in Community 
Development Entities (CDE) that reinvest the funds in qualified 
communities. Recent congressional interest has focused on participation 
by minority CDEs. 

As requested, this report (1) identifies the number of minority and non-
minority CDEs that have applied to the CDFI Fund and received NMTC 
awards, (2) explains the process by which the CDFI Fund makes NMTC 
awards and summarizes application scores, (3) describes challenges, if 
any, minority and non-minority CDEs face in applying for and receiving 
NMTC awards and (4) identifies efforts the CDFI Fund and others are 
taking to assist minority CDEs in applying for NMTC awards. GAO 
analyzed CDFI Fund application data and interviewed minority and non-
minority CDE officials, the CDFI Fund, and industry groups. 

What GAO Found: 

From 2005 through 2008, minority-owned CDEs were successful with about 
9 percent of the NMTC applications that they submitted to the CDFI Fund 
and received about $354 million of the $8.7 billion for which they 
applied, or about 4 percent. By comparison, non-minority CDEs were 
successful with about 27 percent of their applications and received 
$13.2 billion of the $89.7 billion for which they applied, or about 15 
percent. 

The CDFI Fund relies primarily on application scores to determine which 
CDEs receive awards. As the figure shows, minority CDEs received lower 
scores than non-minority CDEs in each of the four application sections. 

Figure: Minority and Non-Minority CDE Application Scores, 2005 through 
2008: 

[Refer to PDF for image: horizontal bar graph] 

Application section: Business strategy; 
Average score, Minority CDEs: 15.6; 
Average score, Non-Minority CDEs: 18.3. 

Application section: Community impact; 
Average score, Minority CDEs: 15.4; 
Average score, Non-Minority CDEs: 17.7. 

Application section: Management capacity; 
Average score, Minority CDEs: 16.1; 
Average score, Non-Minority CDEs: 18.6. 

Application section: Capitalization strategy; 
Average score, Minority CDEs: 14.7; 
Average score, Non-Minority CDEs: 18.5. 

Source: GAO analysis of CDFI Fund Data. 

[End of figure] 

Although a CDE’s resources and experience in applying are important 
factors in a CDE’s success rate with the NMTC program, when controlling 
for factors that GAO could measure, minority status is associated with 
a lower probability of receiving an allocation. It is not clear from 
our analysis why this relationship exists or whether any actions taken 
or not taken by the Department of the Treasury contributed to minority 
CDEs’ lower probability of success. Characteristics associated with 
minority status of some CDEs for which data are unavailable may affect 
this relationship. If Congress views increased participation by 
minority CDEs as a goal for the NMTC program, policy options, such as 
providing certain preferences in the application process that may 
benefit minority CDEs, could be considered. 

The CDFI Fund provides assistance that is available to all CDEs 
applying for awards, including a written debriefing to CDEs that do not 
receive awards detailing some of the weaknesses in the applications. 
Other stakeholders, including industry associations and consultants, 
hold conferences and offer services to help CDEs submit competitive 
applications. Should Congress view additional assistance to minority 
CDEs as important to increasing minority CDEs’ participation in the 
NMTC program, it could consider requiring the CDFI Fund to provide 
targeted assistance to minority CDEs. 

What GAO Recommends: 

GAO makes no recommendations, but summarizes options Congress could 
consider, such as providing certain preferences or technical assistance 
to minority CDEs. The CDFI Fund did not comment on GAO’s options, but 
agreed with GAO’s key conclusion. 

View [hyperlink, http://www.gao.gov/products/GAO-09-536] or key 
components. For more information, contact Michael Brostek at (202) 512-
9110 or brostekm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Minority CDEs Received Proportionally Fewer NMTC Allocations and Lower 
Dollar Amounts Than Non-Minority CDEs: 

In the NMTC Two-Phase Application Process, Minority CDEs Received Lower 
Application Scores Than Non-Minority CDEs: 

Multiple Factors Appear to Be Associated with Whether a CDE Receives a 
NMTC Allocation, Including Minority Status: 

The CDFI Fund and Others Assist CDEs in Submitting Competitive NMTC 
Applications, Although Assistance Is Not Generally Directed 
Specifically to Minority CDEs: 

Concluding Observations: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Description of Data and Methodology for Statistical 
Analysis of Factors Associated with the Probability That CDEs Receive 
NMTC Allocations: 

Appendix III: NMTC Applications and Dollars for Which CDEs Applied and 
Received Allocations by CDE Type and Allocation Year, 2005 through 
2008: 

Appendix IV: Summary of Application Scores for Minority and Non-
Minority CDEs by CDE Type and Year, 2005 through 2008: 

Appendix V: Summary of Application Scores for Minority and Non-Minority 
CDEs by CDE Type and Asset Size, 2005 through 2008: 

Appendix VI: NMTC Applications and Dollars for Minority and Non-
Minority CDEs by Asset Size and CDE Type, 2005 through 2008: 

Appendix VII: Comments from the Department of the Treasury: 

Appendix VIII: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: NMTC Applications and Dollars for Which CDEs Applied and 
Received Allocations by CDE Type, 2005 through 2008: 

Table 2: Applications and Dollar Amounts for Which Minority CDEs 
Applied and Received NMTC Allocations, 2005 through 2008: 

Table 3: NMTC Application Sections and Subcategories: 

Table 4: Minority CDEs Average NMTC Application Scores by Application 
Section, 2005 through 2008: 

Table 5: NMTC Applications for Which CDEs Applied and Received 
Allocations by Asset Size, 2005 through 2008: 

Table 6: NMTC Applications for Which Minority CDEs Applied and Received 
Allocations by Asset Size, 2005 through 2008: 

Table 7: Success Rate of CDEs That Applied for and Received One or More 
NMTC Allocations, 2005 through 2008: 

Table 8: Results of Statistical Analysis on Characteristics That May Be 
Associated with the Probability That a CDE Will Obtain an Allocation, 
All Applicants from 2005 to 2008: 

Table 9: Associations between CDE and Project Characteristics and the 
Probability That a CDE Will Receive an Allocation, 2005-2008: 

Figures: 

Figure 1: NMTC Process for Using Allocated Tax Credits to Make QLICIs: 

Figure 2: Minority and Non-Minority CDEs Application Scores, 2005 
through 2008: 

Figure 3: Overall NMTC Average Application Scores for Minority and Non-
Minority CDEs by CDE Type, 2005 through 2008: 

Abbreviations: 

CDE: Community Development Entity: 

CDFI: Community Development Financial Institutions: 

FDIC: Federal Deposit Insurance Corporation: 

NBA: National Bankers Association: 

NMTC: New Markets Tax Credit: 

QALICB: qualified active low-income community business: 

QEI: qualified equity investment: 

QLICI: qualified low-income community investment: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

April 30, 2009: 

The Honorable Barney Frank: 
Chairman: 
Committee on Financial Services: 
House of Representatives: 

The Honorable Charles B. Rangel: 
Chairman: 
Committee on Ways and Means: 
House of Representatives: 

The Honorable Melvin L. Watt: 
Chairman: 
Subcommittee on Oversight and Investigations: 
Committee on Financial Services: 
United States House of Representatives: 

The Honorable Richard Neal: 
Chairman: 
Subcommittee on Select Revenue Measures: 
Committee on Ways and Means: 
United States House of Representatives: 

Congress established the New Markets Tax Credit (NMTC) program as part 
of the Community Renewal Tax Relief Act of 2000[Footnote 1] to 
encourage investors to make investments in low-income communities that 
traditionally lack access to capital. Conventional access to credit and 
investment capital for developing small businesses, retaining jobs, and 
revitalizing neighborhoods is often limited in economically distressed 
communities or in communities with large low-income populations. The 
NMTC provides investors (financial institutions, individuals, 
corporations, etc.) with a tax credit for investing in a Community 
Development Entity (CDE) that, in turn, reinvests the funds in 
qualified low-income communities. CDEs are domestic partnerships or 
corporations with a primary mission of serving or providing investment 
capital for low-income communities or low-income purposes.[Footnote 2] 

The NMTC program is administered by the Community Development Financial 
Institutions (CDFI) Fund in the Department of the Treasury which 
allocates tax credit authority--the amount of investment for which 
investors can claim a tax credit--to CDEs that apply for and obtain 
allocations. As of April 2009, the CDFI Fund had allocated $19.5 
billion out of $26 billion in total available NMTC allocation 
authority. At the time of this report's publishing, the NMTC is set to 
expire following the 2009 allocation round, if Congress does not extend 
the program. 

Recent congressional interest in the NMTC has focused on minority CDEs' 
participation in the NMTC program. Based on consultations with your 
offices, as requested this report (1) identifies how many minority- 
owned or controlled and non-minority-owned or controlled CDEs have 
applied for and received allocations and how much they have applied for 
and received from 2005 through 2008; (2) explains the NMTC application 
process and summarizes NMTC application scores for minority and non- 
minority-owned or controlled CDEs by CDE type from 2005 through 2008; 
(3) describes the challenges, if any, minority-owned or controlled and 
non-minority-owned or controlled CDEs have faced in applying for and 
receiving NMTC allocations; and (4) identifies efforts the CDFI Fund 
and others are taking to assist minority-owned or controlled CDEs in 
applying for NMTC allocations. As agreed, where appropriate, we 
identify potential policy options which Congress may wish to consider 
based on its interpretation of our results. 

To accomplish these reporting objectives, we obtained documentation on 
the NMTC application process and NMTC application data from 2005 
through 2008 from the CDFI Fund and interviewed CDFI Fund officials and 
representatives from a range of CDEs. To identify the number of 
minority-owned or controlled and other types of CDEs that applied for 
and received NMTC allocations and the amounts for which they applied 
and received, we analyzed NMTC application data from the CDFI Fund for 
the period from 2005 through 2008. We limited our analyses to the 2005 
through 2008 NMTC allocation rounds because the CDFI Fund did not begin 
collecting data on minority-owned or controlled CDE participation in 
the NTMC program until 2005. To describe the NMTC application process, 
we obtained and reviewed documents from the CDFI Fund and interviewed 
CDFI Fund officials. We relied on NMTC application data from the CDFI 
Fund to summarize application scores for minority and non-minority- 
owned or controlled CDEs by CDE type from 2005 through 2008. 

We interviewed representatives from a nongeneralizable sample of 13 
minority-owned or controlled CDEs and 12 similarly-sized non-minority- 
owned CDEs that applied for NMTC awards from 2005 through 2008 to 
identify challenges, if any, that CDEs face in obtaining NMTC awards, 
using the frequency of their responses as the criterion for identifying 
challenges. We interviewed officials from randomly selected minority 
CDEs that obtained and did not obtain NMTC awards, including, minority 
banks and CDEs that did not identify themselves as banks. For each 
minority CDE we contacted, we attempted to interview officials from a 
similarly sized non-minority CDE, based on the asset size of the CDE as 
reported in the CDFI Fund's NMTC application data. 

We conducted statistical analysis on the 2005 through 2008 NMTC 
allocation rounds to measure the association between certain CDE 
characteristics (e.g., asset size, minority status, CDE type, and 
project characteristics) and the probability that a CDE will receive a 
NMTC allocation. To identify efforts the CDFI Fund and other 
stakeholders are taking to help minority-owned or controlled CDEs be 
competitive for NMTC allocations, we interviewed CDFI Fund officials 
and other stakeholders, including industry association representatives 
from organizations such as the New Markets Tax Credit Coalition and the 
National Bankers Association. Appendix I provides more details on our 
scope and methodology. 

We interviewed CDFI Fund officials with knowledge of the NMTC 
application data about the steps they take to ensure its accuracy. We 
determined that the data we use in this report were sufficiently 
reliable for our purposes. We conducted this performance audit from 
October 2008 through March 2009 in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Background: 

The CDFI Fund in the Department of the Treasury is authorized to 
allocate $26 billion[Footnote 3] in tax credit authority to CDEs that 
manage NMTC investments in low-income community development projects. 
[Footnote 4] Eligible organizations may apply for and receive NMTC 
allocations once they have been certified as a CDE by the CDFI Fund (a 
CDE that receives an allocation is often referred to as an allocatee). 
[Footnote 5] Since the first round of NMTC allocations in 2003, demand 
for the NMTC has exceeded available allocation authority by at least 
six times in each allocation round. As of April 2009, the CDFI Fund had 
awarded $19.5 billion in NMTC authority through 2008, with only the 
2009 allocation round and recently provided allocation authority under 
the American Recovery and Reinvestment Act of 2009[Footnote 6] 
remaining. Congress has expressed interest in the implementation and 
effectiveness of the NMTC and mandated that we report to Congress by 
the end of January 2004,[Footnote 7] 2007,[Footnote 8] and 2010. 

As figure 1 illustrates, after the CDFI Fund makes allocations to CDEs, 
investors make equity investments by acquiring stock or a capital 
interest in the CDEs, called qualified equity investments (QEIs), in 
exchange for the right to claim tax credits on a portion of their 
investment. The CDEs, in turn, are required to invest "substantially 
all" of the proceeds they receive into qualified low-income community 
investments (QLICIs).[Footnote 9] Qualified low-income community 
investments include (but are not limited to) investments in businesses, 
referred to as qualified active low-income community businesses 
(QALICBs), to be used for residential, commercial and industrial 
projects and other types of investments such as purchasing loans from 
other CDEs. 

Figure 1: NMTC Process for Using Allocated Tax Credits to Make QLICIs: 

[Refer to PDF for image: illustration] 

Investors: 
* Make a qualified equity investment in Community Development Entity 
(CDE) with allocation (for-profit[A]); 
* Claim tax credit and receive return on investment. 

Community Development Financial Institutions Fund: 
* Allocates tax credit issuance rights to Community Development Entity 
(CDE) with allocation (for-profit[A]). 

Community Development Entity (CDE) with allocation (for-profit[A]): 
* Invests capital in, makes loans to, and buys loans from CDEs, either 
for-profit or nonprofit; 
* Receives return on investment from CDEs, either for-profit or 
nonprofit; 
* Invests capital in or makes loans to Qualified low-income community
investments; 
* Receives return on investment from Qualified low-income community
investments; 
* Provides financial services or counseling to Qualified low-income 
community investments; 
* Receives return on investment from Qualified low-income community
investments; 

CDEs, either for-profit or nonprofit: 
* Invests capital in or makes loans to Qualified low-income community
investments; 
* Receives return on investment from Qualified low-income community
investments; 
* Provides financial services or counseling to Qualified low-income 
community investments; 
* Receives return on investment from Qualified low-income community
investments. 

Source: GAO. 

[A] Only a for-profit CDE can receive qualified equity investment from 
NMTC investors. These CDEs can then make investments in other CDEs that 
could be for-profit CDEs or nonprofit CDEs or they can directly invest 
the NMTC funds in low-income communities. However, both for-profit and 
nonprofit CDEs can receive allocations from the CDFI Fund. If a 
nonprofit CDE receives a NMTC allocation from the CDFI Fund, it must 
transfer the allocation authority to a for-profit CDE before NMTC 
investments can be made. 

[End of figure] 

Although for-profit and nonprofit CDEs can apply for and receive NMTC 
allocations, only for-profit CDEs can offer NMTCs to investors, 
because, by definition, nonprofit organizations generally do not have 
access to equity investment. When a nonprofit CDE receives a NMTC 
allocation, it must transfer the allocation to one or more of its for- 
profit subsidiaries. The for-profit subsidiaries do not have to be 
formed when the nonprofit CDE applies for an allocation. However, the 
subsidiary must submit a CDE certification application to the CDFI Fund 
within 30 days of receiving a Notification of Allocation from the CDFI 
Fund and must be a certified CDE prior to entering into an allocation 
agreement. 

Once a CDE with an allocation has obtained a qualified equity 
investment from NMTC investors and the CDE has invested the funds in an 
eligible low-income community, an investor can claim NMTCs over a 
period of 7 years totaling 39 percent of their original QEI.[Footnote 
10] The NMTC is a nonrefundable tax credit, meaning taxpayers do not 
receive payments for tax credits that exceed their total tax liability. 
Investors can cease to qualify for the NMTC, and can trigger a 
recapture event if the CDE (1) ceases to be a certified CDE, (2) does 
not satisfy the "substantially all" requirement, or (3) redeems the 
investment. A recapture event means that an investor will no longer be 
able to claim the credit, and that the investor that originally 
purchased the equity investment and subsequent holders of the 
investment are required to increase their income tax liability by the 
credits previously claimed plus interest for each resulting 
underpayment of tax.[Footnote 11] 

Different Types of CDEs Participate in the NMTC Program: 

The NMTC application includes an "Applicant Information" section, where 
CDEs categorize their respective organizations into several categories. 
The 2008 NMTC application included CDE categories such as for-profit 
entities, nonprofit entities, certified Community Development Financial 
Institutions,[Footnote 12] publicly traded companies, thrift or bank 
holding companies, government-controlled entities, minority-owned or 
controlled entities, and several other categories.[Footnote 13] The 
CDFI Fund directs CDEs to classify themselves as minority, if more than 
50 percent of the CDE is owned or controlled by members of a minority 
ethnic group. In the case of a for-profit CDE, more than 50 percent of 
the CDEs' owners must be minorities; if the entity applying is a 
nonprofit organization, more than 50 percent of its board of directors 
must be minorities (or its Chief Executive Officer, Executive Director, 
General Partner, or Managing Member must be a minority).[Footnote 14] 

The CDE classification categories are not mutually exclusive, meaning 
that CDEs may identify themselves as more than one type of CDE. For 
example, a minority-owned bank applying as a CDE could also be a for- 
profit organization and a certified CDFI. In addition, partnerships 
formed between different types of organizations to apply for the NMTC 
could cause CDEs to place themselves in a number of different 
categories. For example, a minority-owned bank could form a partnership 
with a state economic development authority, or another organization, 
to apply for a NMTC allocation. In such a case, a CDE might classify 
itself as being part of both a government-controlled entity and as 
minority owned. 

Controlling entities--entities that control applicant CDEs and 
essentially act as parent companies--also regularly create CDEs for the 
purposes of applying for allocation authority. In these instances, the 
CDE may be established specifically to apply for and make use of the 
NMTC, but the track record and characteristics of the controlling 
entity may better reflect the capacity of a CDE to complete NMTC 
transactions than the CDE itself. For example, a nonprofit organization 
may be the controlling entity of a for-profit subsidiary formed to 
apply for a NMTC allocation. In such a case, the mission and goals of 
the nonprofit controlling entity may provide a better indication of the 
applicant's intended use of the NMTC than the for-profit subsidiary 
formed specifically to apply for the NMTC. The CDFI Fund also collects 
information on certain characteristics, including the asset size, of 
the controlling entities of CDEs that apply for NMTC authority. 

Minority Populations and Minority CDEs May Benefit from the NMTC in 
Multiple Ways: 

Representatives from several minority-owned entities and industry 
associations that we interviewed indicated that minority CDEs and other 
locally based, community lending organizations may have a better 
understanding of the economic conditions and availability of capital in 
the communities they serve than other investment organizations serving 
those same communities. However, in addition to minority CDEs obtaining 
NMTC authority and making investments in low-income communities, 
minority populations may benefit from the NMTC in other ways. For 
example, non-minority CDEs have also made investments in minority 
businesses that serve residents in low-income communities. Minority- 
owned businesses located in eligible NMTC census tracts may hire or 
provide services to minority residents in low-income communities. 
According to CDFI Fund officials, it is possible that non-minority 
owned businesses located in NMTC-eligible census tracts with highly 
concentrated minority populations could provide economic benefits for 
minority residents. 

Recent analysis completed for the Federal Reserve Bank of San Francisco 
indicates that NMTC-eligible census tracts and census tracts in which 
NMTC investments were made through 2006 had higher non-white 
populations than census tract averages across the entire United States. 
For example, on average, non-white residents account for nearly 42 
percent of residents in NMTC-eligible census tracts across the United 
States, compared to an average of about 26 percent in all U.S. census 
tracts. In addition, on average, non-white residents account for nearly 
47 percent of residents living in census tracts in which CDEs have made 
NMTC investments through 2006.[Footnote 15] 

Minority CDEs Received Proportionally Fewer NMTC Allocations and Lower 
Dollar Amounts than Non-Minority CDEs: 

From 2005 through 2008, non-minority CDEs that applied for NMTC 
allocations received about 27 percent and 15 percent of the NMTC 
allocations and dollar amounts for which they applied, respectively. As 
the bottom of table 1 illustrates, by comparison, minority CDEs were 
successful with about 9 percent of their applications and received 
about 4 percent of allocation dollars that they requested. 

Table 1: NMTC Applications and Dollars for Which CDEs Applied and 
Received Allocations by CDE Type, 2005 through 2008: 

CDE type: For-profit, Non-minority; 
Applications: Number: 518; 
Applications: Number successful: 130; 
Applications: Percentage successful: 25.1%; 
Dollar amounts: Applied for: $58,198,243,339; 
Dollar amounts: Awarded: $7,881,750,000; 
Dollar amounts: Percentage awarded: 13.5%. 

CDE type: For-profit, Minority; 
Applications: Number: 60; 
Applications: Number successful: 4; 
Applications: Percentage successful: 6.7%; 
Dollar amounts: Applied for: $6,468,858,125; 
Dollar amounts: Awarded: $182,000,000; 
Dollar amounts: Percentage awarded: 2.8%. 

CDE type: Nonprofit, Non-minority; 
Applications: Number: 319; 
Applications: Number successful: 94; 
Applications: Percentage successful: 29.5%; 
Dollar amounts: Applied for: $30,742,464,063; 
Dollar amounts: Awarded: $5,199,250,000; 
Dollar amounts: Percentage awarded: 16.9%. 

CDE type: Nonprofit, Minority; 
Applications: Number: 28; 
Applications: Number successful: 4; 
Applications: Percentage successful: 14.3%; 
Dollar amounts: Applied for: $2,228,600,000; 
Dollar amounts: Awarded: $172,000,000; 
Dollar amounts: Percentage awarded: 7.7%. 

CDE type: Certified CDFIs, Non-minority; 
Applications: Number: 117; 
Applications: Number successful: 54; 
Applications: Percentage successful: 46.2%; 
Dollar amounts: Applied for: $10,382,929,719; 
Dollar amounts: Awarded: $3,069,000,000; 
Dollar amounts: Percentage awarded: 29.6%. 

CDE type: Certified CDFIs, Minority; 
Applications: Number: 29; 
Applications: Number successful: 3; 
Applications: Percentage successful: 10.3%; 
Dollar amounts: Applied for: $2,357,500,000; 
Dollar amounts: Awarded: $82,000,000; 
Dollar amounts: Percentage awarded: 3.5%. 

CDE type: Publicly traded company, Non-minority; 
Applications: Number: 89; 
Applications: Number successful: 30; 
Applications: Percentage successful: 33.7%; 
Dollar amounts: Applied for: $12,627,300,000; 
Dollar amounts: Awarded: $2,262,250,000; 
Dollar amounts: Percentage awarded: 17.9%. 

CDE type: Publicly traded company, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $300,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type: Government-controlled, Non-minority; 
Applications: Number: 125; 
Applications: Number successful: 30; 
Applications: Percentage successful: 24.0%; 
Dollar amounts: Applied for: $13,838,812,183; 
Dollar amounts: Awarded: $1,472,000,000; 
Dollar amounts: Percentage awarded: 10.6%. 

CDE type: Government-controlled, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar amounts: Applied for: $486,600,000; 
Dollar amounts: Awarded: $100,000,000; 
Dollar amounts: Percentage awarded: 20.6%. 

CDE type: Thrift or bank holding company, Non-minority; 
Applications: Number: 154; 
Applications: Number successful: 47; 
Applications: Percentage successful: 30.5%; 
Dollar amounts: Applied for: $17,907,596,839; 
Dollar amounts: Awarded: $3,443,250,000; 
Dollar amounts: Percentage awarded: 19.2%. 

CDE type: Thrift or bank holding company, Minority; 
Applications: Number: 18; 
Applications: Number successful: 2; 
Applications: Percentage successful: 11.1%; 
Dollar amounts: Applied for: $1,705,500,000; 
Dollar amounts: Awarded: $80,000,000; 
Dollar amounts: Percentage awarded: 4.7%. 

CDE type: Other[A], Non-minority; 
Applications: Number: 18; 
Applications: Number successful: 2; 
Applications: Percentage successful: 11.1%; 
Dollar amounts: Applied for: $1,400,736,700; 
Dollar amounts: Awarded: $110,000,000; 
Dollar amounts: Percentage awarded: 7.9%. 

CDE type: Other[A], Minority; 
Applications: Number: 11; 
Applications: Number successful: 1; 
Applications: Percentage successful: 9.1%; 
Dollar amounts: Applied for: $976,600,000; 
Dollar amounts: Awarded: $30,000,000; 
Dollar amounts: Percentage awarded: 3.1%. 

CDE type: All applicants[B], Non-minority; 
Applications: Number: 846; 
Applications: Number successful: 227; 
Applications: Percentage successful: 26.8%; 
Dollar amounts: Applied for: $89,672,707,402; 
Dollar amounts: Awarded: $13,155,000,000; 
Dollar amounts: Percentage awarded: 14.7%. 

CDE type: All applicants[B], Minority; 
Applications: Number: 88; 
Applications: Number successful: 8; 
Applications: Percentage successful: 9.1%; 
Dollar amounts: Applied for: $8,697,458,125; 
Dollar amounts: Awarded: $354,000,000; 
Dollar amounts: Percentage awarded: 4.1%. 

Source: GAO Analysis of CDFI Fund Data: 

[A] This category includes application data from the CDFI Fund for the 
following additional CDE types: Small Business Investment Companies, 
Specialized Small Business Investment Companies, New Markets Venture 
Capital Companies, credit unions, faith-based organizations, and tribal 
organizations. Each of these categories accounts for less than 1 
percent of the total population of applicants. 

[B] The sum of the individual categories is not equal to the summary 
numbers for the entire applicant pool because the CDE categories are 
not mutually exclusive. For example, in addition to a CDE classifying 
itself as a bank, it could also categorize itself as a for-profit 
organization or in other applicable categories. 

Note: Application data is self-reported by CDEs to the CDFI Fund. 

[End of table] 

Table 1 also shows that minority CDEs generally received a smaller 
percentage of the allocations and dollar amounts for which they applied 
than similar types of non-minority CDEs. Minority CDEs received a 
larger percentage of the dollars for which they applied in only the 
government controlled category, a CDE type in which relatively few 
minority CDEs applied. Appendix III shows the number of NMTC 
applications and allocation dollars for which minority and non-minority 
CDEs applied and received by year from 2005 through 2008. 

Since 2005, the first year in which the CDFI Fund collected data on 
minority CDEs, CDFI Fund application data indicate that 68 minority 
CDEs have applied for NMTC allocations from the CDFI Fund for a total 
of 88 applications. Fifteen minority CDEs applied for NMTC allocations 
in multiple years. From 2005 through 2008, the CDFI Fund received 934 
NMTC applications from 566 different CDEs. The 88 applications that 
minority CDEs submitted account for about 9 percent of the total number 
of NMTC applications that the CDFI Fund received from 2005 through 
2008. Of the 67 minority CDEs that applied, 6 CDEs received a total of 
eight NMTC allocations (2 minority CDEs each received two separate 
allocations).[Footnote 16] 

As table 2 shows, minority applicants received about $354 million in 
allocation authority from 2005 through 2008, which was about 4 percent 
of the allocation dollars for which they applied. Allocations awarded 
to minority CDEs accounted for about 2.6 percent of the $13.5 billion 
in total NMTC allocation authority that the CDFI Fund awarded during 
this period. Minority CDEs received the largest dollar amount of NMTC 
allocation authority for which they applied in 2008, the most recent 
NMTC award round, owing in large part to a $100 million allocation that 
went to a single CDE. 

Table 2: Applications and Dollar Amounts for Which Minority CDEs 
Applied and Received NMTC Allocations, 2005 through 2008: 

Year: 2005; 
Applications: Number: 13; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0%; 
Dollar amounts: Applied for: $1,652,000,000; 
Dollar amounts: Awarded: $0; Dollar amounts: 
Percentage awarded: 0.0%. 

Year: 2006; 
Applications: Number: 22; 
Applications: Number successful: 3; 
Applications: Percentage successful: 13.6%; 
Dollar amounts: Applied for: $2,281,000,000; 
Dollar amounts: Awarded: $92,000,000; 
Dollar amounts: Percentage awarded: 4.0%. 

Year: 2007; 
Applications: Number: 23; 
Applications: Number successful: 1; 
Applications: Percentage successful: 4.3%; 
Dollar amounts: Applied for: $2,250,358,125; 
Dollar amounts: Awarded: $75,000,000; 
Dollar amounts: Percentage awarded: 3.3%. 

Year: 2008; 
Applications: Number: 30; 
Applications: Number successful: 4; 
Applications: Percentage successful: 13.3%; 
Dollar amounts: Applied for: $2,514,100,000; 
Dollar amounts: Awarded: $187,000,000; 
Dollar amounts: Percentage awarded: 7.4%. 

Year: Total; 
Applications: Number: 88; 
Applications: Number successful: 8; 
Applications: Percentage successful: 9.1%; 
Dollar amounts: Applied for: $8,697,458,125; 
Dollar amounts: Awarded: $354,000,000; 
Dollar amounts: Percentage awarded: 4.1%. 

Source: GAO analysis of CDFI Fund data. 

[End of table] 

In the NMTC Two-Phase Application Process, Minority CDEs Received Lower 
Application Scores Than Non-Minority CDEs: 

The CDFI Fund's process for making NMTC awards takes place in two 
phases. Under the first phase, NMTC applicants submit standardized 
application packages in which they respond to a series of questions 
about the CDE's track record, the dollar amount of allocated tax 
credits requested, and the organization's plans for using the credits 
to support activities in low-income communities. NMTC applications are 
first reviewed and scored by a group of external reviewers selected by 
the CDFI Fund who have demonstrated experience in business, real 
estate, or community development finance.[Footnote 17] Reviewers 
receive an applicant's entire NMTC application, including applicant 
information that identifies the applicant CDE's type and the amount of 
total assets held by the CDE. If the applicant has a controlling 
entity, similar information is provided to the reviewers about the 
controlling entity. 

Each application is reviewed by three external reviewers, and, if the 
CDFI Fund identifies a scoring anomaly by one of the reviewers, a 
fourth reviewer also reviews and scores the application. Applications 
are scored based on a range of criteria and applicants can receive 
scores of up to 25 points by each reviewer in each of the following 
four sections: (1) business strategy, (2) community impact, (3) 
management capacity, and (4) capitalization strategy. Applicants can 
also receive up to 10 "priority" points by demonstrating a record of 
successful investment in disadvantaged communities or businesses (5 
points) and by investing in businesses unrelated to the applicant (5 
points). However, priority points are not included in calculating an 
applicant's score until the second phase of the application review 
process. Table 3 summarizes the four areas under which the applications 
are scored. 

Table 3: NMTC Application Sections, Descriptions, and Subcategories: 

Application section: Business strategy[A]; 
Subcategories: Reviewers score applications in the following 
subcategories: (1) products, services, and investment criteria, (2) 
prior performance, (3) projected business activity, and (4) value 
added. 

Application section: Community impact; 
Subcategories: Reviewers score applications in the following 
subcategories: (1) targeting areas of high distress, (2) prior
performance, (3) economic development impacts, (4) community 
development impacts, and (5) other community benefits. 

Application section: Management capacity; 
Subcategories: Reviewers score applications in the following 
subcategories: (1) experience deploying capital or services, (2) 
experience raising capital, (3) financial capacity and asset 
management, (4) program compliance experience, and (5) community 
accountability. 

Application section: Capitalization strategy; 
Subcategories: Reviewers score applications in the following 
subcategories: (1) track record of raising investor capital, (2) 
strategy for raising investor capital, (3) relationship with investors, 
(4) NMTC economic benefit, and (5) sources and uses of capital. 

Source: GAO analysis of CDFI Fund data: 

[A] Applicants may also receive a total of 10 "priority" points for 
demonstrating a track record of investing in low-income communities (5 
points) and for demonstrating that the CDE will make NMTC investments 
in one or more businesses in which persons unrelated to the applicant 
CDE hold the majority equity interest (5 points). These priority points 
do not count toward an applicant's score in the first phase of the NMTC 
review process. 

[End of table] 

CDEs that meet or exceed an overall scoring threshold and a threshold 
in each of the four application sections advance to a second phase of 
the application process in which CDFI Fund officials determine--based 
on a final ranking score--which CDEs will receive allocations and how 
much they will receive.[Footnote 18] The final ranking score is the sum 
of the aggregate business strategy score, the community impact score, 
and half of the priority points that a CDE received for demonstrating a 
track record of investing in low-income communities or investing in 
unrelated entities. 

To determine how much allocation authority a CDE will receive, CDFI 
Fund staff review the amount of allocation authority that the CDE 
requested and, based on the information in the application materials, 
award allocation amounts in the order of CDEs' final ranking scores. 
When recommending allocation amounts, CDFI Fund staff members are 
instructed to consider the amount of equity investment the CDE can 
expect to raise in 2 years, the amount of NMTC investment in low-income 
communities that can be deployed within 3 years, the quality of the 
financial products being offered, and the projected impact on low- 
income communities or low-income persons. Not all of the CDEs that 
satisfy the minimum application score thresholds receive allocations. 
Allocation authority is generally awarded in order of final ranking 
scores until the allocation authority is exhausted. 

Minority CDEs' Average Scores Generally Do Not Meet the CDFI Fund's 
Minimum Thresholds for Advancing to the Second Phase of the Review 
Process: 

On average for the four year period from 2005 through 2008, minority 
CDEs do not meet the minimum threshold for advancing past the first 
phase of the NMTC review process (an average score of 16 points) in 
three of the four application sections, as table 4 illustrates. 
Overall, from 2005 through 2008, minority CDEs on average met this 
minimum threshold in the management capacity section of the application 
only. However, in 2008, minority CDEs' average application scores met 
or exceeded the minimum threshold in three sections--(1) business 
strategy, (2) management capacity, and (3) capitalization strategy. In 
addition, minority CDEs' average application scores fell short of the 
minimum threshold for the community impact section of the application 
by only one-tenth of a point in 2008. In general, minority CDEs scored 
lowest on average in the capitalization strategy section of the 
application and highest in the management capacity section of the 
application from 2005 to 2008. 

Table 4: Minority CDEs Average NMTC Application Scores by Application 
Section, 2005 through 2008: 

Year: 2005; 
Business strategy: 13.5; 
Community impact: 13.8; 
Management capacity: 15.2; 
Capitalization strategy: 13.4; 
Average total: 55.9. 

Year: 2006; 
Business strategy: 16.4; 
Community impact: 15.4; 
Management capacity: 16.2; 
Capitalization strategy: 14.0; 
Average total: Year2007: 62.0. 

Year: 2007; 
Business strategy: 15.4; 
Community impact: 15.7; 
Management capacity: 15.8; 
Capitalization strategy: 14.7; 
Average total: 61.6. 

Year: 2008; 
Business strategy: 16.0; 
Community impact: 15.9; 
Management capacity: 16.6; 
Capitalization strategy: 16.0; 
Average total: 64.4. 

Year: Average all years[A]; 
Business strategy: 15.6; 
Community impact: 15.4; 
Management capacity: 16.1; 
Capitalization strategy: 14.7; 
Average total: 61.8. 

Source: GAO analysis of CDFI Fund application data. 

[A] The scores for each year consist of the average score in each 
section for applications submitted to the CDFI Fund in that year. The 
average for all years consists of the average score in each category 
for all CDEs that applied from 2005 to 2008 combined, not the average 
of the scores for each year. 

[End of table] 

According to our analysis of NMTC application data, of the 88 
applications submitted by minority CDEs, 31 applications met the 
minimum threshold scores to advance to the second phase of the NTMC 
review process from 2005 to 2008. By comparison, during this same time 
period 518 of the 846 applications submitted by non-minority CDEs met 
the minimum thresholds to advance to the second phase of the review 
process. Eight minority CDE applications that advanced to the second 
phase of the review process, or about 26 percent of minority CDE 
applications that met minimum scoring thresholds, received allocations. 
By comparison, 227, or about 44 percent, of non-minority CDEs that 
advanced to the second phase of the review process received 
allocations. 

While most minority CDEs that applied for NMTC allocations did not 
advance past the first phase of the application process from 2005 
through 2008, minority CDEs' total average application scores increased 
by about 15 percent during this period.[Footnote 19] Average scores 
also generally increased in each of the four main application sections. 
Minority CDEs that were also classified as banks scored higher in the 
NMTC application than all CDEs that applied for allocations. For 
example, minority-owned banks had an average total application score of 
70.2 while all minority CDEs had average total application scores of 
61.8. 

Minority CDEs Scored Lower than Non-Minority CDEs: 

Minority CDEs have generally received lower application scores overall 
and in each of the four NMTC application sections than non-minority 
CDEs. As figure 2 shows, non-minority CDEs scored higher on their NMTC 
applications in each of the four application sections than minority 
CDEs for all years with available data. Overall, non-minority CDEs 
scored about 11 points higher than minority CDEs on NMTC applications 
from 2005 through 2008. Minority CDEs' scores differed the most from 
non-minority CDEs' scores in the capitalization strategy section of the 
application, where non-minority CDEs scored 25 percent higher than 
minority CDEs. Non-minority CDEs scored between 15 percent and 17 
percent higher than minority CDEs in the business strategy, community 
impact, and management capacity sections of the application. 

Figure 2: Minority and Non-Minority CDEs Application Scores, 2005 
through 2008 Average Score: 

[Refer to PDF for image: horizontal bar graph] 

Application section: Business strategy; 
Average score, Minority CDEs: 15.6; 
Average score, Non-Minority CDEs: 18.3. 

Application section: Community impact; 
Average score, Minority CDEs: 15.4; 
Average score, Non-Minority CDEs: 17.7. 

Application section: Management capacity; 
Average score, Minority CDEs: 16.1; 
Average score, Non-Minority CDEs: 18.6. 

Application section: Capitalization strategy; 
Average score, Minority CDEs: 14.7; 
Average score, Non-Minority CDEs: 18.5. 

Source: GAO analysis of CDFI Fund Data. 

Note: The average scores presented above reflect the average aggregate 
application scores for each section divided by three--the number of 
reviewers scoring the applications. 

[End of figure] 

Lower application scores for minority CDEs also varied by CDE type. For 
example, as figure 3 shows, minority CDEs that reported being for- 
profit organizations, nonprofit organizations, certified CDFIs and 
thrift organizations or bank holding companies all had lower 
application scores than non-minority CDEs of the same type. Minority 
and non-minority CDEs scores differed the most in for-profit 
organizations. On average, non-minority-owned for-profit organizations 
scored about 14 points higher than minority-owned for-profit 
organizations between 2005 and 2008. Appendix IV provides further 
details on CDE application scores by CDE type and year from 2005 
through 2008. 

Figure 3: Overall NMTC Average Application Scores for Minority and Non- 
Minority CDEs by CDE Type, 2005 through 2008 Average Score: 

[Refer to PDF for image: vertical bar graph] 

CDE Type: For-profit; 
Average score, Minority CDEs: 59.5; 
Average score, Non-Minority CDEs: 73. 

CDE Type: Nonprofit; 
Average score, Minority CDEs: 66.8; 
Average score, Non-Minority CDEs: 72.9. 

CDE Type: Certified CDFI; 
Average score, Minority CDEs: 70.7; 
Average score, Non-Minority CDEs: 79.1. 

CDE Type: Thrift or bank holding; 
Average score, Minority CDEs: 70.2; 
Average score, Non-Minority CDEs: 77. 

CDE Type: Other[A]; 	
Average score, Minority CDEs: 65.7; 
Average score, Non-Minority CDEs: 74.3. 

Note: Application data are self-reported by CDEs to the CDFI Fund. 

[A] This category includes application data from the CDFI Fund for the 
following additional CDE types: Small Business Investment Companies, 
Specialized Small Business Investment Companies, New Markets Venture 
Capital Companies, credit unions, faith-based organizations, and tribal 
organizations. Each of these categories accounts for less than 1 
percent of the total population of applicants. This category also 
includes publicly traded companies and government controlled entities. 
We did not report these categories separately because only three 
minority CDEs reported being publicly traded companies and only six 
government-controlled entities also reported being minority controlled. 

[End of figure] 

Multiple Factors Appear to be Associated with Whether a CDE Receives a 
NMTC Allocation, Including Minority Status: 

To identify challenges minority and non-minority CDEs face in obtaining 
NMTC allocations, we obtained testimonial evidence from representatives 
from minority and non-minority CDEs, and we analyzed CDFI Fund 
application data. While both our testimonial evidence and statistical 
analysis have limitations, they generally show that a CDE's capacity, 
measured by asset size in this case, is associated with an increased 
probability of obtaining an award. Our statistical analysis, among 
other significant factors, indicates that the minority status of a CDE 
is associated with a lower probability of obtaining an allocation. 

Representatives from Minority and Non-Minority CDEs We Interviewed 
Identified Similar Challenges to Receiving Allocations: 

Officials from minority and non-minority CDEs we interviewed to 
identify challenges to receiving allocations generally identified 
similar challenges in applying for and receiving NMTC allocations, and 
representatives from minority CDEs we interviewed generally did not 
identify minority status as an impediment to receiving an allocation. 
Specifically, they said it can be difficult in the NMTC application to 
demonstrate the capacity to effectively use the NMTC and the experience 
in investing in low-income communities necessary to obtain allocations. 
According to officials from several CDEs we interviewed, demonstrating 
the relative impact of NMTC projects through the NMTC application may 
be particularly difficult when smaller, community-based CDEs compete 
for allocations against large banks and financial institutions that may 
have the capacity to undertake larger projects with more easily 
identifiable economic impacts. 

Based on the most frequent responses provided, officials from minority 
and non-minority CDEs we interviewed identified the following 
challenges that CDEs may face in applying for NMTC allocations: 

* Some CDEs, particularly smaller CDEs, may have difficulties 
demonstrating the ability to use the amount of NMTC capital for which 
they apply. 

* Some CDEs may have difficulty demonstrating a track record for both 
making investments in low-income communities and investing in large 
projects that would appear to generate significant impacts. 

* Smaller CDEs may have a difficult time demonstrating that they have 
the capacity to complete proposed projects that will have community 
impacts that compare favorably to the impacts described by larger CDEs. 

* The complexity of the NMTC can result in relatively high transaction 
costs, which may favor larger CDEs that typically undertake larger 
projects. Specifically, NMTC transactions can involve multiple 
stakeholders, including lawyers and consultants. Increasingly complex 
transactions also generally mean that transaction costs, to the extent 
that they are largely fixed costs, account for a greater percentage of 
an overall project's cost for smaller projects as opposed to larger 
projects. 

* Although CDEs do not submit an application fee to apply, external 
costs associated with applying for NMTC allocations, such as consulting 
fees and staff time dedicated to completing the application, deter some 
CDEs from applying. 

CDEs with Lower Asset Value and Less Experience in Applying May Be Less 
Likely to Obtain NMTC Allocations: 

Because our interviews with minority and non-minority CDE officials had 
identified the CDEs' overall capacity to apply for and use NMTC and its 
ability to demonstrate through the NMTC application that it can 
effectively use the tax credit as factors that may lead to successful 
applications, we analyzed CDFI Fund application data by CDE asset size 
and experience in submitting NMTC applications. The asset size of a 
CDE, or the CDE's controlling entity when one exists, may serve as an 
indication of its overall capacity and resources available to dedicate 
to applying for a NMTC allocation and to execute NMTC transactions once 
the CDE receives an allocation. CDE experience with the application 
process may reflect how much CDE officials learn from CDFI Fund 
feedback in previous application rounds (e.g., newly proposed projects 
may have reduced transaction costs in comparison to previously proposed 
projects, more data may be collected on potential community impacts). 

Smaller CDEs applying for allocations between 2005 and 2008, 
particularly those in the bottom 40 percent of asset size, received 
fewer allocations and received lower application scores than larger 
CDEs. Table 5 shows that NMTC applicants in the smallest two quintiles 
of asset size received only about 13.1 percent and 5.8 percent of the 
allocation dollars for which they applied. Applicants in the three 
largest quintiles by asset size received closer to 16 percent of the 
allocation dollars for which they applied. Similarly, allocation 
dollars for which CDEs applied and received decrease as CDEs become 
smaller. 

Table 4: NMTC Applications for Which CDEs Applied and Received 
Allocations by Asset Size, 2005 through 2008: 

Quintile[A]: Largest; 
Applications: Number: 187; 
Applications: Number successful: 54; 
Applications: Percentage successful: 28.9%; 
Dollar amounts: Applied for: $25,010,875,000; 
Dollar amounts: Awarded: $3,962,250,000; 
Dollar amounts: Percentage awarded: 15.8%. 

Quintile[A]: Second largest; 
Applications: Number: 187; 
Applications: Number successful: 52; 
Applications: Percentage successful: 27.8%; 
Dollar amounts: Applied for: $20,785,475,000; 
Dollar amounts: Awarded: $3,260,000,000; 
Dollar amounts: Percentage awarded: 15.7%. 

Quintile[A]: Middle; 
Applications: Number: 187; 
Applications: Number successful: 56; 
Applications: Percentage successful: 30.0%; 
Dollar amounts: Applied for: $18,157,630,000; 
Dollar amounts: Awarded: $2,974,000,000; 
Dollar amounts: Percentage awarded: 16.4%. 

Quintile[A]: Second smallest; 
Applications: Number: 187; 
Applications: Number successful: 47; 
Applications: Percentage successful: 25.1%; 
Dollar amounts: Applied for: $18,007,254,467; 
Dollar amounts: Awarded: $2,365,000,000; 
Dollar amounts: Percentage awarded: 13.1%. 

Quintile[A]: Smallest; 
Applications: Number: 186; 
Applications: Number successful: 26; 
Applications: Percentage successful: 14.0%; 
Dollar amounts: Applied for: $16,408,931,060; 
Dollar amounts: Awarded: $974,750,000; 
Dollar amounts: Percentage awarded: 5.8%. 

All applicants: 
Applications: Number: 934; 
Applications: Number successful: 235; 
Applications: Percentage successful: 25.2%; 
Dollar amounts: Applied for: $98,370,165,527; 
Dollar amounts: Awarded: $13,509,000,000; 
Dollar amounts: Percentage awarded: 13.7%. 

Source: GAO analysis of CDFI Fund data. 

[A] CDEs report the asset size for the applicant CDE and the 
controlling entity of the applicant CDE. In cases where a controlling 
entity reported its asset size we used the controlling entity's asset 
size as long as it was greater than the applicant's asset size. In 
cases where no controlling entity was present, we used the applicant's 
reported asset size for this analysis. The asset size ranges for each 
of the five quintiles are as follows: (1) largest quintile, 
$2,182,706,000,000 to $2,378,496,000, (2) second largest quintile, 
$2,378,495,999 to $226,832,000, (3) middle quintile, $226,831,999 to 
$35,779,943, (4) second smallest quintile, $35,779,942 to $3,740,000, 
and (5) smallest quintile, $3,739,999 to $0. 

[End of table] 

As expected, given that the top three quintiles in asset size received 
more NMTC allocations than the bottom two quintiles, CDEs with larger 
amounts of assets generally received higher application scores in all 
four areas of the NMTC application than smaller CDEs. Appendix V shows 
NMTC application scores by CDE asset size and CDE type over the same 
time period. 

In general, minority CDEs that applied for NMTC allocations from 2005 
through 2008 had relatively few assets when compared to non-minority 
CDEs that applied for allocations. For example, half of the minority 
CDEs that applied for NMTC allocations from 2005 through 2008 were 
among the smallest 40 percent of NMTC applicants, and, of those 
applicants, only two received allocations. The remaining six successful 
NMTC applications by minority CDEs went to minority CDEs in the largest 
40 percent of all CDEs. 

Table 6: NMTC Applications for Which Minority CDEs Applied and Received 
Allocations by Asset Size, 2005 through 2008: 

Quintile[A]: Largest; 
Applications: Number: 2; 
Applications: Number successful: 1; 
Applications: Percentage successful: 50.0%; 
Dollar amounts: Applied for: $245,000,000,000; 
Dollar amounts: Awarded: $1,000,000; 
Dollar amounts: Percentage awarded: 40.8%. 

Quintile[A]: Second largest; 
Applications: Number: 27; 
Applications: Number successful: 5; 
Applications: Percentage successful: 18.5%; 
Dollar amounts: Applied for: $3,095,000,000; 
Dollar amounts: Awarded: $222,000,000; 
Dollar amounts: Percentage awarded: 7.2%. 

Quintile[A]: Middle; 
Applications: Number: 15; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0%; 
Dollar amounts: Applied for: $1,260,600,000; 
Dollar amounts: Awarded: $0; 
Dollar amounts: Percentage awarded: 0.0%. 

Quintile[A]: Second smallest; 
Applications: Number: 14; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0%; 
Dollar amounts: Applied for: $1,149,358,125; 
Dollar amounts: Awarded: $0; 
Dollar amounts: Percentage awarded: 0.0%. 

Quintile[A]: Smallest; 
Applications: Number: 30; 
Applications: Number successful: 2; 
Applications: Percentage successful: 6.7%; 
Dollar amounts: Applied for: $2,947,500,000; 
Dollar amounts: Awarded: $32,000,000; 
Dollar amounts: Percentage awarded: 1.1%. 

All applicants: 
Applications: Number: 88; 
Applications: Number successful: 8; 
Applications: Percentage successful: 9.1%; 
Dollar amounts: Applied for: $8,697,458,125; 
Dollar amounts: Awarded: $354,000,000; 
Dollar amounts: Percentage awarded: 4.1%. 

Source: GAO analysis of CDFI Fund data. 

[A] CDEs report the asset size for the applicant CDE and the 
controlling entity of the applicant CDE. In cases where a controlling 
entity reported its asset size we used the controlling entity's asset 
size as long as it was greater than the applicant's asset size. In 
cases where no controlling entity was present, we used the applicant's 
reported asset size for this analysis. The asset size ranges for each 
of the five quintiles are as follows: (1) largest quintile, 
$2,182,706,000,000 to $2,378,496,000, (2) second largest quintile, 
$2,378,495,999 to $226,832,000, (3) middle quintile, $226,831,999 to 
$35,779,943, (4) second smallest quintile, $35,779,942 to $3,740,000, 
and (5) smallest quintile, $3,739,999 to $0. 

[End of table] 

As table 6 shows, larger minority CDEs that applied for allocations 
(those in the top 40 percent of asset size) had more success in 
obtaining allocations than smaller minority CDEs. However, in comparing 
table 5 to table 6, minority CDEs also received proportionally fewer 
allocations and dollar amounts in each quintile than all CDEs that 
applied (with the exception of the largest quintile in which only two 
minority CDE applicants fell). Analysis of different types of CDEs, 
such as for-profit CDEs, nonprofit CDEs, and certified CDFIs, shows a 
similar pattern.[Footnote 20] Larger CDEs in those categories generally 
experienced greater success in obtaining NMTC allocations and minority 
CDEs generally received a proportionally smaller share of NMTC 
allocations than non-minority CDEs when comparing CDE types. Appendix 
VI shows NMTC applications by CDE type, including the dollar amounts 
for which CDEs applied and received allocations from 2005 through 2008. 

As table 7 shows, CDEs that applied multiple times obtained more NMTC 
allocations than CDEs that only applied one time. For example, CDEs 
that applied only once received an allocation 10 percent of the time, 
while CDEs that applied twice received at least one award about 30 
percent of the time and were successful in both allocation rounds 9 
percent of the time. 

Table 7: Success Rate of CDEs' that Applied for and Received One or 
More NMTC Allocations, 2005 through 2008: 

Number of applications: One; 
Percentage receiving at least one award: 10.7%; 
Percentage receiving at least two awards: Not applicable; 
Percentage receiving at least three awards: Not applicable; 
Percentage receiving four awards:Not applicable. 

Number of applications: Two; 
Percentage receiving at least one award: 29.5%; 
Percentage receiving at least two awards: 9.3%; 
Percentage receiving at least three awards: Not applicable; 
Percentage receiving four awards: Not applicable. 

Number of applications: Three; 
Percentage receiving at least one award: 67.2%; 
Percentage receiving at least two awards: 41.4%; 
Percentage receiving at least three awards: 6.9%; 
Percentage receiving four awards: Not applicable. 

Number of applications: Four; 
Percentage receiving at least one award: 90.2%; 
Percentage receiving at least two awards: 70.7%; 
Percentage receiving at least three awards: 34.1%; 
Percentage receiving four awards: 4.9%. 

Source: GAO analysis of CDFI Fund data. 

[End of table] 

Analysis Indicates That After Controlling for Measurable 
Characteristics, Minority Status Is Associated with a Lower Probability 
of Obtaining an Allocation: 

As the analysis above shows, the size of the CDE, how often it applies, 
and its minority status are associated with the frequency with which it 
receives a NMTC allocation. However, this analysis does not isolate the 
separate effects of these characteristics. For example, we cannot say 
whether it is the tendency of minority CDEs to be smaller that accounts 
for their lower success rate rather than their minority status alone. 
We conducted additional statistical analysis to control for certain CDE 
characteristics, including some of those that we identified through our 
interviews as being challenges to CDEs receiving allocations. We also 
control for other characteristics using available NMTC application data 
(e.g., CDE type, asset size, minority status, and other factors such as 
the characteristics of proposed projects).[Footnote 21] 

Our additional statistical analysis of all CDEs that applied from 2005 
to 2008 demonstrates that the probability that a NMTC applicant will 
receive an award is associated with certain factors. For example, after 
controlling for other characteristics, larger CDEs, as measured by 
asset size, appear to be more likely to receive NMTC awards while 
smaller CDEs are less likely to receive awards. Our analysis also shows 
that after controlling for characteristics such as CDE type, asset 
size, and proposed project characteristics, minority status is 
associated with a lower probability of receiving an allocation. Table 8 
illustrates our results for the factors we could measure. 

Table 8: Results of Statistical Analysis on Characteristics That May Be 
Associated with the Probability That a CDE Will Obtain an Allocation, 
All Applicants from 2005 to 2008: 

Characteristic: CDE characteristic: Asset size; 
Result[A]: Significant, positive[A]; 
Interpretation of results, holding other characteristics constant: 
Greater asset size is associated with an increased probability of 
receiving an allocation while smaller asset size is associated with 
decreased probability. 

Characteristic: CDE characteristic: Minority-owned or controlled; 
Result[A]: Significant, negative[A]; 
Interpretation of results, holding other characteristics constant: 
Minority-owned or controlled status is associated with a decreased 
probability of receiving an allocation while not being minority owned 
or controlled is associated with increased probability. 

Characteristic: CDE characteristic: Certified CDFI; 
Result[A]: Significant, positive[A]; 
Interpretation of results, holding other characteristics constant: 
Being a certified CDFI is associated with a greater probability of 
obtaining an allocation while not being a certified CDFIs is associated 
with a lower probability. 

Characteristic: CDE characteristic: Nonprofit; 
Result[A]: Not significant; 
Interpretation of results, holding other characteristics constant: 
Being a nonprofit organization (or not being nonprofit) is not 
statistically significantly associated with the probability of 
receiving an allocation. 

Characteristic: CDE characteristic: Bank; 
Result[A]: Not significant; 
Interpretation of results, holding other characteristics constant: 
Being a bank (or not being a bank) is not statistically significantly 
associated with the probability of receiving an allocation. 

Characteristic: CDE characteristic: Publicly traded; 
Result[A]: Not significant; 
Interpretation of results, holding other characteristics constant: 
Being a publicly traded company (or not being publicly traded) is not 
statistically significantly associated with the probability of 
receiving an allocation. 

Characteristic: Project characteristics: Non-real estate property; 
Result[A]: Not significant; 
Interpretation of results, holding other characteristics constant: 
Proposing (or not proposing) non-real estate property NMTC investments 
is not statistically significantly associated with the probability of 
receiving an allocation. 

Characteristic: Project characteristics: Severely distressed area[B]; 
Result[A]: Significant, positive[A]; 
Interpretation of results, holding other characteristics constant: 
Proposing projects with a greater share of investment in severely 
distressed areas is associated with an increased probability of 
obtaining an allocation while proposing projects with a smaller share 
is associated with decreased probability. 

Characteristic: Project characteristics: Investment in urban area; 
Interpretation of results, holding other characteristics constant: 
Result[A]: Significant, positive[A]; 
Proposing projects with a greater share of investment in urban areas is
associated with an increased probability of obtaining an allocation 
while proposing projects with a smaller share is associated with a 
decreased probability. 

Source: GAO analysis of CDFI Fund data: 

[A] The association is statistically significant at the 99 percent 
level (p-value of 1 percent or less). 

[B] For the purposes of the 2009 NMTC allocation round, the CDFI Fund 
includes 18 different types of low-income communities as "areas of 
higher distress." 

[End of table] 

It is not clear from our analysis why minority status is associated 
with a lower probability of obtaining an allocation or whether any 
actions taken or not taken by the Department of the Treasury or the 
CDFI Fund contributed to this statistical relationship. Other factors 
for which our statistical analysis is unable to account, such as 
experience with the application process, may also be reasons why 
minority CDEs have not been as successful in obtaining NMTC allocations 
as non-minority CDEs. 

For example, according to a 2006 GAO report, certain minority-owned 
banks have higher loan loss reserves and operating costs than non- 
minority owned peers.[Footnote 22] These types of characteristics could 
potentially affect the competitiveness of minority CDE NMTC 
applications, particularly in the business strategy and management 
capacity section of the applications. Also, according to industry 
association representatives, minority-owned banks have traditionally 
had a more difficult time accessing capital markets than their non- 
minority peers, and our analysis of the CDFI Fund application data show 
that minority CDEs score lowest in the capitalization strategy section 
of the application. Our analysis indicates that these differences are 
not explained by the size of the CDE--that is, they are not problems 
shared by other small, non-minority CDEs that applied for NMTC 
allocations. However, these differences could be associated with some 
other feature that minority CDEs share with non-minority CDEs for which 
we do not have data to include in our analysis. 

Potential Options: 

The relative lack of success of minority CDEs may have implications for 
the communities they serve. In 2002, the Federal Deposit Insurance 
Corporation (FDIC) issued a policy statement[Footnote 23] indicating 
that minority-owned depository institutions often promote the economic 
viability of minority and underserved communities, and Congress, 
through the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989, has indicated an intention to preserve and support 
minority-owned banks in the past.[Footnote 24] Our discussions with 
representatives from minority and non-minority CDEs and industry 
associations generally indicated that locally based community lending 
organizations, of which many minority CDEs would likely be subset, may 
have a better understanding of the economic conditions and availability 
of capital in the communities that they serve than other investment 
organizations serving those same communities. For example, a 
representative of an industry organization that assists businesses and 
individuals in traditionally underserved communities obtain capital, 
indicated that minority owned banks that also serve as community banks 
may have a unique understanding of the communities that they serve. 

The legislative history for the NMTC does not address whether Congress 
intended for minority CDEs to benefit directly from the NMTC program. 
However, if Congress intends for minority CDEs' participation in the 
NMTC program to exceed the current levels and Congress believes that 
minority CDEs have unique characteristics that position them to target 
the NMTC to its most effective use, Congress may want to consider 
legislative changes to the program should the New Markets Tax Credit be 
extended beyond 2009. Potential changes that could be considered 
include, but would not be limited to the following: (1) similar to 
provisions for certain federal grant programs, requiring that a certain 
portion of the overall amount of allocation authority be designated for 
minority CDEs; (2) in accordance with information we obtained in 
discussions with several experts in economic development, exploring the 
potential for creating a pool of NMTC allocation authority to be 
dedicated specifically for community banks (minority-banks that are 
certified CDEs, in most cases, would likely compete with non-minority 
community banks with similar characteristics for NMTC allocations); or 
(3) similar to other federal programs where preferences are given to 
targeted populations, offering priority points to minority CDEs that 
apply for NMTC allocations. 

Although these options could increase the amount of NMTC authority 
awarded to minority CDEs, in part because we could not definitively 
identify the reasons why minority CDEs have scored lower on the NMTC 
application than non-minority CDEs, the options may not address the 
underlying reasons for lower minority CDE success. In addition, 
implementing these changes would require addressing a number of issues, 
including legal and administrative concerns, associated with such 
changes in the NMTC application process. 

The CDFI Fund and Others Assist CDEs in Submitting Competitive NMTC 
Applications, Although Assistance Is Not Generally Directed 
Specifically to Minority CDEs: 

According to CDFI Fund officials, the CDFI Fund has conducted outreach 
intended to reach all CDEs that may have an interest in applying for 
NMTCs. In the early NMTC rounds, CDFI Fund officials conducted video 
teleconferences as part of a general outreach strategy. Participants 
took part in a live question and answer session about applying for the 
NMTC. CDFI Fund officials said they have more recently converted these 
video conferences to Web-based seminars. Early in the program, the CDFI 
Fund conducted NMTC outreach in 10 to 12 selected cities per year, 
conducting seminars and creating general awareness about the NMTC 
program. According to CDFI Fund officials, in recent years, as the 
program has matured, CDFI Fund officials have conducted fewer on-site 
meetings with prospective program participants. 

The CDFI Fund has written guidance and application materials on its Web 
site. These materials include question and answer documents on the CDE 
certification process and applying for the NMTC once an organization 
has become a certified CDE. The guidance includes information on the 
NMTC statute, rules and regulations associated with the NMTC program, 
and information on ensuring that NMTC investments will remain compliant 
with the program's rules. 

Representatives from minority and non-minority CDEs we interviewed 
offered a range of opinions on the CDFI Fund's written guidance. 
Officials from CDEs we interviewed found the CDFI Fund's guidance to be 
clear and generally understandable. However, some CDE representatives 
indicated that available guidance could be clearer about the type of 
information CDEs should include in their application, especially the 
types of projects for which they intend to use NMTC allocation 
authority. 

The CDFI Fund also provides a written debriefing to each CDE that does 
not receive an allocation to assist the CDE in future application 
rounds. The debriefing document provides the unsuccessful CDE with 
information about its scores in each of the application sections and 
written comments on areas of weakness within each of the four main 
application sections. Officials from some CDEs we interviewed noted 
that the debriefing document helped them submit more competitive 
application materials in future rounds. Officials from a few CDEs noted 
that the debriefing comments were not consistent from one year to 
another. Therefore, it was not clear to the representatives from those 
CDEs from the feedback that they received in the debriefing document 
that the application reviewer fully understood the projects and 
investment structures being proposed. 

Additionally, at the request of trade associations, CDFI Fund officials 
attend trade association conferences and give presentations about the 
NMTC program. According to CDFI Fund officials, CDFI Fund staff has 
given presentations for industry associations such as the New Markets 
Tax Credit Coalition; the National Bankers Association (NBA), an 
industry organization that represents minority-owned banks; and at FDIC 
conferences targeted to minority-owned institutions. Representatives 
from a member organization of the NBA said that the CDFI Fund's 
presentations on the NMTC are helpful in gaining an understanding of 
the program; however, these officials also noted that due to time and 
other constraints associated with conference presentations, member 
organizations may not come away from these presentations with a 
detailed understanding of how their minority-owned banks could submit 
competitive applications. 

External Stakeholders, Including Industry Associations and Consultants, 
Provide Information on How to Submit Competitive NMTC Applications: 

External stakeholders, including representatives from industry 
associations such as the New Markets Tax Credit Coalition and a 
consulting firm we identified, hold conferences and offer varying 
degrees of assistance to CDEs submitting NMTC applications. For 
example, the New Markets Tax Credit Coalition, in addition to 
distributing information about the NMTC to interested parties through 
its Web site and e-mail lists, holds two annual conferences to address 
issues of interest to CDEs. For example, the fall 2008 conference held 
by the New Markets Tax Credit Coalition included a panel discussion on 
emerging trends in NMTC awards, which included a discussion of NMTC 
practitioners offering insights on the application process. CDFI Fund 
staff also participated by discussing the 2009 NMTC application 
process. 

In addition, an official from a consulting firm with experience in the 
NMTC program that we identified also indicated that their consulting 
firm provides in-person and online training sessions about the NMTC 
application process for clients and for organizations which have not 
retained the services of the firm. Further, representatives from one 
CDE we interviewed indicated that they have participated in 
presentations and discussions within their communities to educate 
potential NMTC participants on the application process. However, 
representatives from organizations with experience in the NMTC program 
and community development programs in general that we identified also 
indicated that they did not target specific groups, including minority 
CDEs or other types of CDEs, for their outreach and assistance with 
respect to the NMTC application process. 

CDEs Hire Consultants to Assist with Their NMTC Applications for a 
Range of Purposes: 

CDEs often hire consultants to assist them with completing their NMTC 
applications. Consultants offer a range of services to CDEs, including 
reviewing NMTC applications for completeness and depth of responses to 
completing the entire NMTC application for an applicant. Officials from 
some CDEs we interviewed indicated that they limited the consultant's 
role to reviewing their application because they felt they would be 
better able to describe their organization's history of investment in 
low-income communities and their intended use of the NMTC. On the other 
hand, representatives from one particular CDE we interviewed felt that 
their CDE would have a better chance of obtaining an allocation if they 
allowed consultants with greater NMTC program and technical expertise 
to complete their applications. 

Representatives from CDEs we interviewed said that fees paid to 
consultants can span a relatively wide range depending on the services 
being provided by the consultant and the contracts established between 
the CDE and the consultant. For example, officials from several CDEs 
indicated that they paid consultants less than $5,000 to review their 
NMTC applications while others paid consultants as much as $50,000 for 
a more complete set of services. In addition, in a couple of instances, 
officials from CDEs with which we spoke indicated that consultants 
agreed to provide NMTC application consulting services on the condition 
that they would receive a basic fee at the beginning of the contract 
and would only receive additional compensation if the CDE received an 
allocation. 

Potential Options: 

In previous legislation, Congress has directed banking regulators, in 
consultation with the Department of the Treasury, to provide technical 
assistance and training to help preserve the character of minority 
banks in cases involving mergers and acquisitions of these 
organizations.[Footnote 25] If Congress perceives a similar interest in 
preserving and expanding the participation of minority CDEs in the NMTC 
program, Congress could direct that the Department of the Treasury and 
the CDFI Fund explore options for providing technical assistance in 
applying for and using NMTC allocations to minority CDEs. Such 
assistance could focus on broadening the pool of minority CDE 
applicants and providing minority CDEs with instructions on how to 
highlight the impact that proposed NMTC projects may have on the 
communities they serve. Providing such assistance might increase the 
number of minority CDE applicants and the quality of their 
applications, but would not necessarily ensure that minority CDEs would 
receive more NMTC allocations. 

Concluding Observations: 

The NMTC program was designed to promote investment and development in 
low-income communities. Minority CDEs comprise one type of CDE that may 
have a special perspective on the challenges facing certain low-income 
communities and low-income populations. However, the legislative 
history for the NMTC does not address whether Congress intended for 
minority CDEs' participation in the NMTC to be higher than it has been. 
Our analysis indicates that minority CDEs have received proportionally 
fewer allocations than non-minority CDEs that applied, and when 
controlling for other CDE characteristics, minority status is 
associated with a lower probability of obtaining an allocation. 

Our analysis is not sufficient to conclude that actions taken or not 
taken by the Department of the Treasury or the CDFI Fund have 
contributed to minority CDEs receiving proportionally fewer allocations 
than non-minority CDEs. Rather, while identifying CDE size (or the size 
of the CDE's controlling entity) and experience in applying for the 
credit as important factors in obtaining an allocation, our analysis 
does not identify all of the factors that may contribute to minority 
CDEs' success rate with the NMTC program. Our analysis also does not 
indicate the extent to which minority businesses and minority residents 
in low-income communities have benefited from the NMTC, which would 
appear to be an outcome consistent with the NMTC program's goal of 
deploying capital to underserved communities. Additional information 
about the specific projects and their benefits in low-income 
communities is needed to determine the extent to which minority 
communities may benefit from the NMTC. 

Recent congressional interest about the participation of minority CDEs 
in the NMTC program has been introduced in the context of a program for 
which demand already exceeds supply. In all years, applications for 
NMTC authority have greatly exceeded the amount of allocation authority 
the CDFI Fund is authorized to award, and the CDFI Fund faces 
challenges in identifying the applicants with the best plans for using 
NMTC allocation authority. However, according to some representatives 
we interviewed from minority and non-minority CDEs and industry 
associations, CDEs with a focus on serving the communities in which 
they are located, of which many minority CDEs would likely be a subset, 
may have a unique understanding of the conditions that exist in the 
communities they serve. In addition Congress has shown an interest in 
supporting minority owned banks in the past. If Congress is interested 
in increasing minority CDEs' participation in the NMTC program and the 
NMTC is reauthorized beyond 2009, Congress could consider several 
options that might offer minority CDEs opportunities to be more 
competitive for allocations in the future. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Director of the Community 
Development Financial Institutions (CDFI) Fund. 

We are sending copies of this report to the Secretary of the Treasury, 
the Director of the CDFI Fund, and interested Congressional committees. 
The report also is available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staffs have questions about this report, please contact 
me at (202) 512-9110 or brostekM@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Staff who made major contributions to 
this report are listed in appendix VII. 

Signed by: 

Michael Brostek: 
Director, Strategic Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Based on consultations with your offices, as requested this report (1) 
identifies how many minority-owned or controlled and non-minority-owned 
or controlled CDEs have applied for and received allocations and how 
much they have applied for and received from 2005 through 2008; (2) 
explains the NMTC application process and summarizes NMTC application 
scores for minority and non-minority-owned or controlled CDEs by CDE 
type from 2005 through 2008; (3) describes the challenges, if any, 
minority-owned or controlled and non-minority-owned or controlled CDEs 
have faced in applying for and receiving NMTC allocations; and (4) 
identifies efforts the CDFI Fund and others are taking to assist 
minority-owned or controlled CDEs in applying for NMTC allocations. As 
agreed with your staff, where appropriate we identify potential policy 
options that Congress may wish to consider based on its interpretation 
of our results. 

To identify the number of minority-owned or controlled and other types 
of CDEs that applied for and received NMTC allocations and the amounts 
for which they applied and received, we analyzed NMTC application data 
from the CDFI Fund from 2005 through 2008. We limited our analysis to 
the 2005 through 2008 allocation rounds because the CDFI Fund did not 
begin collecting data on minority-owned or controlled CDE participation 
in the NMTC program until 2005. To discuss the number of minority-owned 
or controlled CDEs applying for and receiving NMTC allocations within 
the context of the entire applicant pool, we analyzed application data 
for all CDE types and sizes. Specifically, we used application data to 
develop summary statistics for the total number of allocations and 
amounts awarded for all NMTC applicants. We also used the application 
data to summarize the percentage of CDEs that applied for and received 
allocations, and the amount of NMTC allocation authority awarded as a 
percent of the amount of allocation authority for which CDEs applied by 
CDE type and size. 

Because NMTC application data is self-reported by applicants, the CDFI 
Fund relies on applicants to self-report whether they should be 
classified as "minority-owned or controlled" in accordance with the 
CDFI Fund's definition of a minority-owned or controlled CDE. Some CDE 
applicants could include a minority-owned bank partnering with a 
nonprofit organization. In such cases where partnerships are developed 
for the purpose of applying for the NMTC, the CDE may not always 
indicate that a minority-owned or controlled partner is contributing to 
the CDE's NMTC application. Because it may not be clear in all of these 
cases whether the CDEs meeting the technical definition of "minority 
owned or controlled" classified themselves as such, we were unable to 
generalize about the extent to which such partnerships have been 
formed. Additionally, applicants may self-report multiple 
classifications for CDE types. For example, a CDE classifying itself as 
a bank could also categorize itself as a for-profit organization. 
Consequently, classifications for CDE types are not mutually exclusive. 

To ensure reliability of the application data, we interviewed CDFI Fund 
officials with knowledge of the NMTC application data about the steps 
they take to ensure its accuracy. We determined that the data we use in 
this report were sufficiently reliable for our purposes. 

To describe the NMTC application process we obtained and reviewed 
documents from the CDFI Fund that describe the criteria that the NMTC 
application reviewers used to score applications for each of the 
allocation rounds from 2005 through 2008. We developed summary 
statistics from 2005 through 2008 application data to analyze how CDEs 
of different types and sizes scored on the overall application and in 
each of the four main application sections. To supplement our data 
analysis, we interviewed CDFI Fund officials to clarify the application 
process and the scores in each application section. We also interviewed 
other stakeholders, including representatives from industry 
associations such as the New Markets Tax Credit Coalition, the National 
Bankers Association, the National Community Reinvestment Coalition, and 
a range of CDEs to obtain their views on the NMTC application process. 

We interviewed representatives from a nongeneralizable sample of 13 
minority-owned or controlled CDEs and 12 similarly-sized non-minority- 
owned CDEs that applied for NMTC awards from 2005 through 2008 to 
identify challenges, if any, that CDEs face in obtaining NMTC awards, 
using the frequency of their responses as the criterion for identifying 
challenges. We interviewed officials from randomly selected minority 
CDEs that obtained and did not obtain NMTC awards, including, minority 
banks and CDEs that did not identify themselves as banks. For each 
minority CDE we contacted, we attempted to interview officials from a 
similarly sized non-minority CDE, based on the asset size of the CDE as 
reported in the CDFI Fund's NMTC application data. For each group 
interviewed, we used a structured list of interview questions and 
analyzed the content of the interview summaries to identify recurring 
themes and differences that exist across the categories of CDE and 
banks interviewed. We also interviewed CDFI Fund officials to discuss 
the recurring themes from our discussions with CDEs to place any 
concerns we identified into the proper context with respect to the NMTC 
application process. Given that the CDEs interviewed represented a 
nongeneralizable sample, the challenges that we identified are not 
generalizable to the universe of applicants and potential applicants. 

In addition to the interviews, we conducted multiple regression 
analysis on the 2005 through 2008 application data that measured the 
association between certain CDE characteristics (e.g., asset size, CDE 
type, minority status and characteristics of the projects proposed by 
the CDEs, such as whether the projects are located in severely 
distressed communities and whether these communities are in urban or 
rural areas) and the probability that a CDE will receive a NMTC 
allocation. These methods are more fully described in appendix II. 

To identify efforts that the CDFI Fund and other stakeholders are 
taking to help minority-owned or controlled CDEs be competitive for 
NMTC allocations, we interviewed CDFI Fund officials and other 
stakeholders, including industry association representatives from 
organizations such as the New Markets Tax Credit Coalition and the 
National Bankers Association. Because we cannot be sure we identified 
all sources of support that minority owned CDEs receive in applying for 
the NMTC allocations, the sources of support discussed in this report 
should not be considered definitive or comprehensive. 

We conducted this performance audit from October 2008 through March 
2009 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Description of Data and Methodology for Statistical 
Analysis of Factors Associated with the Probability That CDE's Receive 
NMTC Allocations: 

Community Development Financial Institutions (CDFI) Fund data can be 
used to measure the relative frequency of receiving awards for 
different types of Community Development Entities (CDE). For example, 
we calculate that, based on this data, about 9 percent of minority CDE 
applications receive allocations while about 27 percent of all non- 
minority CDEs receive allocations. Based on this relative frequency 
measure, minority applications are less likely to receive allocations 
than non-minority applications. To determine whether this lower 
likelihood persists when other factors that affect the probability of 
success are controlled for, a multiple regression statistical analysis 
was applied to the data. This appendix describes that methodology and 
the results of the analysis. 

CDFI Fund Data: 

The data are from New Markets Tax Credit (NMTC) applications maintained 
by the CDFI Fund on factors that describe characteristics of the CDEs, 
such as asset size and minority status and characteristics of the 
projects proposed by the CDEs, such as whether the projects are located 
in severely distressed communities and whether these communities are in 
urban or rural areas. We limited our analysis to the 2005 to 2008 NMTC 
allocation rounds because the CDFI fund did not collect data on 
minority-owned or controlled CDEs' participation in the NMTC program 
until 2005. 

Methodology and Results of the Analysis: 

We estimated factors associated with the probability of receiving a 
NMTC allocation using the random effects probit model.[Footnote 26] The 
analysis was done for the 566 CDEs that made 934 applications from 2005 
through 2008. As table 9 shows, asset size, CDFI status, projects 
placed in severely distressed areas and urban areas all are associated 
with increased probability of receiving an allocation, while minority 
status is associated with decreased probability. The table shows the 
marginal effect of each variable on the probability of success, for 
example, status as a CDFI is associated with a 19 percentage point 
greater probability of receiving an allocation. 

Table 9: Associations between CDE and Project Characteristics and the 
Probability That a CDE Will Receive an Allocation, 2005-2008: 

Measure: CDE characteristic: Asset size; 
Coefficient: .0026; 
Standard error: *.0010. 

Measure: CDE characteristic: Minority owned or controlled; 
Coefficient: -.1540; 
Standard error: *.0271. 

Measure: CDE characteristic: Certified CDFI; 
Coefficient: .1900; 
Standard error: *.0613. 

Measure: CDE characteristic: Nonprofit; 
Coefficient: .0525; 
Standard error: .0383. 

Measure: CDE characteristic: Bank; 
Coefficient: .0229; 
Standard error: .0479. 

Measure: CDE characteristic: Publicly traded; 
Coefficient: .0021; 
Standard error: .0570. 

Measure: Project characteristic: Non-real estate property; 
Coefficient: .0326; 
Standard error: .0350. 

Measure: Project characteristic: Severely distressed area; 
Coefficient: .0044; 
Standard error: *.0015. 

Measure: Project characteristic: Urban area; 
Coefficient: .0011; 
Standard error: *.0004. 

* Indicates that the measure is significant at the at the 99 percent 
level (p-value of 1 percent or less). 

[End of table] 

According to this analysis which controls for other factors that might 
affect the probability of success, minority status is associated with a 
lower probability of receiving an allocation. For example, the analysis 
shows, as also claimed by several CDEs in our interviews, that smaller 
CDEs (here measured by asset size) are less likely to receive 
allocations. The analysis shows that the lower likelihood of success 
for minority CDEs is not fully explained by the tendency of these CDEs 
to be smaller. Even after controlling for the effect of asset size (and 
other factors), minority status lowers a CDE's probability of getting 
an allocation by 15 percentage points. However, the analysis does not 
exclude the possibility that minority status is associated with other 
characteristics of the CDE, such as management capacity for which we do 
not have independent data, which account for the lower probability. In 
that case, it would not be minority status per se that lowers the 
probability of success but its association with other factors not 
included in the analysis. 

Specification Tests: 

We tested our model for specification errors that might cause our 
estimates to be biased. Our tests did not find evidence of such errors. 
Also, our results for minority status were robust in all of the 
specifications that we tested. 

We tested for and rejected the following types of specification error: 

* Selection bias: The estimates may be biased if there is some 
characteristic of CDEs winning (or not winning) an allocation that is 
associated with belonging (or not belonging) to the applicant pool. If 
such is the case, the regression would not properly distinguish the 
probability of winning from the probability of applying. We tested for 
selection bias using a Hausman test that compared the estimates from a 
subsample of CDEs that applied in every year to estimates based on all 
CDEs. The test did not provide evidence sufficient for us to conclude 
that our estimates are subject to selection bias. 

* Endogenous variable bias: The estimates may be biased if some 
variables used in the regression to explain the probability of winning 
an allocation are "endogenous", i.e. are under the control of one or 
more parties to the application process and can be used to affect the 
probability of winning. While certain variables (such as asset size) 
are unlikely to be endogenous, other variables (such as the location of 
projects in severely distressed areas) could be endogenous to the 
application process. We tested for the exogeneity of the variables 
measuring characteristics of the projects as these seemed to be most 
likely to be used to affect the probability of winning an award. We did 
not find evidence sufficient to conclude that the variables are 
endogenous. 

[End of section] 

Appendix III: NMTC Applications and Dollars for Which CDEs Applied and 
Received Allocations by CDE Type and Allocation Year, 2005 through 
2008: 

CDE type and year: For-profit, 2005, Non-Minority; 
Applications: Number: 120; 
Applications: Number successful: 23; 
Applications: Percentage successful: 19.2%; 
Dollar amounts: Applied for: $13,042,452,000; 
Dollar amounts: Awarded: $1,101,000,000; 
Dollar amounts: Percentage awarded: 8.4%. 

CDE type and year: For-profit, 2005, Minority; 
Applications: Number: 10; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0%; 
Dollar amounts: Applied for: $1,442,000,000; 
Dollar amounts: Awarded: $0; 
Dollar amounts: Percentage awarded: 0.0%. 

CDE type and year: For-profit, 2006, Non-Minority; 
Applications: Number: 136; 
Applications: Number successful: 38; 
Applications: Percentage successful: 27.9%; 
Dollar amounts: Applied for: $16,980,474,440; 
Dollar amounts: Awarded: $2,634,000,000; 
Dollar amounts: Percentage awarded: 15.5%. 

CDE type and year: For-profit, 2006, Minority; 
Applications: Number: 15; 
Applications: Number successful: 1; 
Applications: Percentage successful: 6.7%; 
Dollar amounts: Applied for: $1,749,000,000; 
Dollar amounts: Awarded: $60,000,000; 
Dollar amounts: Percentage awarded: 3.4%. 

CDE type and year: For-profit, 2007, Non-Minority; 
Applications: Number: 144; 
Applications: Number successful: 41; 
Applications: Percentage successful: 28.5%; 
Dollar amounts: Applied for: $16,667,571,360; 
Dollar amounts: Awarded: $2,615,000,000; 
Dollar amounts: Percentage awarded: 15.7%. 

CDE type and year: For-profit, 2007, Minority; 
Applications: Number: 15; 
Applications: Number successful: 1; 
Applications: Percentage successful: 6.7%; 
Dollar amounts: Applied for: $1,437,058,125; 
Dollar amounts: Awarded: $75,000,000; 
Dollar amounts: Percentage awarded: 5.2%. 

CDE type and year: For-profit, 2008, Non-Minority; 
Applications: Number: 118; 
Applications: Number successful: 28; 
Applications: Percentage successful: 23.7%; 
Dollar amounts: Applied for: $11,507,745,539; 
Dollar amounts: Awarded: $1,531,750,000; 
Dollar amounts: Percentage awarded: 13.3%. 

CDE type and year: For-profit, 2008, Minority; 
Applications: Number: 20; 
Applications: Number successful: 2; 
Applications: Percentage successful: 10.0%; 
Dollar amounts: Applied for: $1,840,800,000; 
Dollar amounts: Awarded: $47,000,000; 
Dollar amounts: Percentage awarded: 2.6%. 

CDE type and year: For-profit, total, Non-Minority; 
Applications: Number: 518; 
Applications: Number successful: 130; 
Applications: Percentage successful: 25.1%; 
Dollar amounts: Applied for: $58,198,243,339; 
Dollar amounts: Awarded: $7,881,750,000; 
Dollar amounts: Percentage awarded: 13.5%. 

CDE type and year: For-profit, total, Minority; 
Applications: Number: 60; 
Applications: Number successful: 4; 
Applications: Percentage successful: 6.7%; 
Dollar amounts: Applied for: $6,468,858,125; 
Dollar amounts: Awarded: $182,000,000; 
Dollar amounts: Percentage awarded: 2.8%. 

CDE type and year: Nonprofit, 2005, Non-Minority; 
Applications: Number: 69; 
Applications: Number successful: 17; 
Applications: Percentage successful: 24.6%; 
Dollar amounts: Applied for: $7,744,500,880; 
Dollar amounts: Awarded: $891,000,000; 
Dollar amounts: Percentage awarded: 11.5%. 

CDE type and year: Nonprofit, 2005, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $210,000,000; 
Dollar amounts: Awarded: $0; 
Dollar amounts: Percentage awarded: 0.0%. 

CDE type and year: Nonprofit, 2006, Non-Minority; 
Applications: Number: 80; 
Applications: Number successful: 22; 
Applications: Percentage successful: 27.5; 
Dollar amounts: Applied for: $7,775,842,183; 
Dollar amounts: Awarded: $1,374,000,000; 
Dollar amounts: Percentage awarded: 17.7%. 

CDE type and year: Nonprofit, 2006, Minority; 
Applications: Number: 7; 
Applications: Number successful: 2; 
Applications: Percentage successful:28.6%; 
Dollar amounts: Applied for: $532,000,000; 
Dollar amounts: Awarded: $32,000,000; 
Dollar amounts: Percentage awarded: 6.0%. 

CDE type and year: Nonprofit, 2007, Non-Minority; 
Applications: Number: 79; 
Applications: Number successful: 17; 
Applications: Percentage successful: 21.5%; 
Dollar amounts: Applied for: $7,942,171,000; 
Dollar amounts: Awarded: $1,153,000,000; 
Dollar amounts: Percentage awarded: 14.5%. 

CDE type and year: Nonprofit, 2007, Minority; 
Applications: Number: 8; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $813,300,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Nonprofit, 2008, Non-Minority; 
Applications: Number: 91; 
Applications: Number successful: 38; 
Applications: Percentage successful: 41.8%; 
Dollar amounts: Applied for: $7,279,950,000; 
Dollar amounts: Awarded: $1,781,250,000; 
Dollar amounts: Percentage awarded: 24.5%. 

CDE type and year: Nonprofit, 2008, Minority; 
Applications: Number: 10; 
Applications: Number successful: 2; 
Applications: Percentage successful: 20.0%; 
Dollar amounts: Applied for: $673,300,000; 
Dollar amounts: Awarded: $140,000,000; 
Dollar amounts: Percentage awarded: 20.8%. 

CDE type and year: Nonprofit, Total, Non-Minority; 
Applications: Number: 319; 
Applications: Number successful: 94; 
Applications: Percentage successful: 29.5%; 
Dollar amounts: Applied for: $30,742,464,063; 
Dollar amounts: Awarded: $5,199,250,000; 
Dollar amounts: Percentage awarded: 16.9%. 

CDE type and year: Nonprofit, Total, Minority; 
Applications: Number: 28; 
Applications: Number successful: 4; 
Applications: Percentage successful: 14.3%; 
Dollar amounts: Applied for: $2,228,600,000; 
Dollar amounts: Awarded: $172,000,000; 
Dollar amounts: Percentage awarded: 7.7%. 

CDE type and year: Certified CDFIs, 2005, Non-Minority; 
Applications: Number: 28; 
Applications: Number successful: 11; 
Applications: Percentage successful: 39.3$; 
Dollar amounts: Applied for: $2,170,492,880; 
Dollar amounts: Awarded: $494,000,000; 
Dollar amounts: Percentage awarded: 22.8%. 

CDE type and year: Certified CDFIs, 2005, Minority; 
Applications: Number: 4; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $325,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Certified CDFIs, 2006, Non-Minority; 
Applications: Number: 29; 
Applications: Number successful: 14; 
Applications: Percentage successful: 48.3%; 
Dollar amounts: Applied for: $3,148,910,000; 
Dollar amounts: Awarded: $911,000,000; 
Dollar amounts: Percentage awarded: 28.9%. 

CDE type and year: Certified CDFIs, 2006, Minority; 
Applications: Number: 10; 
Applications: Number successful: 2; 
Applications: Percentage successful: 20.0%; 
Dollar amounts: Applied for: $898,000,000; 
Dollar amounts: Awarded: $62,000,000; 
Dollar amounts: Percentage awarded: 6.9%. 

CDE type and year: Certified CDFIs, 2007, Non-Minority; 
Applications: Number: 25; 
Applications: Number successful: 7; 
Applications: Percentage successful: 28.0%; 
Dollar amounts: Applied for: $2,226,610,000; 
Dollar amounts: Awarded: $517,000,000; 
Dollar amounts: Percentage awarded: 23.2%. 

CDE type and year: Certified CDFIs, 2007, Minority; 
Applications: Number: 5; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $525,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0%. 

CDE type and year: Certified CDFIs, 2008, Non-Minority; 
Applications: Number: 35; 
Applications: Number successful: 22; 
Applications: Percentage successful: 62.9%; 
Dollar amounts: Applied for: $2,836,916,839; 
Dollar amounts: Awarded: $1,147,000,000; 
Dollar amounts: Percentage awarded: 40.4%. 

CDE type and year: Certified CDFIs, 2008, Minority; 
Applications: Number: 10; 
Applications: Number successful: 1; 
Applications: Percentage successful: 10.0%; 
Dollar amounts: Applied for: $609,500,000; 
Dollar amounts: Awarded: $20,000,000; 
Dollar amounts: Percentage awarded: 3.3%. 

CDE type and year: Certified CDFIs, Total, Non-Minority;
Applications: Number: 117; 
Applications: Number successful: 54; 
Applications: Percentage successful: 46.2%; 
Dollar amounts: Applied for: $10,382,929,719; 
Dollar amounts: Awarded: $3,069,000,000; 
Dollar amounts: Percentage awarded: 29.6%. 

CDE type and year: Certified CDFIs, Total, Minority;
Applications: Number: 29; 
Applications: Number successful: 3; 
Applications: Percentage successful: 10.3%; 
Dollar amounts: Applied for: $2,357,500,000; 
Dollar amounts: Awarded: $82,000,000; 
Dollar amounts: Percentage awarded: 3.5%. 

CDE type and year: Publicly traded company, 2005, Non-Minority; 
Applications: Number: 23; 
Applications: Number successful: 6; 
Applications: Percentage successful: 26.1%; 
Dollar amounts: Applied for: $3,341,000,000; 
Dollar amounts: Awarded: $339,000,000; 
Dollar amounts: Percentage awarded: 10.1%. 

CDE type and year: Publicly traded company, 2005, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: 0; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Publicly traded company, 2006, Non-Minority; 
Applications: Number: 23; 
Applications: Number successful: 8; 
Applications: Percentage successful: 34.8%; 
Dollar amounts: Applied for: $3,232,500,000; 
Dollar amounts: Awarded: $762,000,000; 
Dollar amounts: Percentage awarded: 23.6%. 

CDE type and year: Publicly traded company, 2006, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $100,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Publicly traded company, 2007, Non-Minority; 
Applications: Number: 24; 
Applications: Number successful: 9; 
Applications: Percentage successful: 37.5%; 
Dollar amounts: Applied for: $,482,500,000; 
Dollar amounts: Awarded: $790,000,000; 
Dollar amounts: Percentage awarded: 22.7%. 

CDE type and year: Publicly traded company, 2007, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $100,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Publicly traded company, 2008, Non-Minority; 
Applications: Number: 19; 
Applications: Number successful: 7; 
Applications: Percentage successful: 36.8%; 
Dollar amounts: Applied for: $2,571,300,000; 
Dollar amounts: Awarded: $371,250,000; 
Dollar amounts: Percentage awarded: 14.4%. 

CDE type and year: Publicly traded company, 2008, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $100,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Publicly traded company, Total, Non-Minority; 
Applications: Number: 89; 
Applications: Number successful: 30; 
Applications: Percentage successful: 33.7%; 
Dollar amounts: Applied for: $12,627,300,000; 
Dollar amounts: Awarded: $2,262,250,000; 
Dollar amounts: Percentage awarded: 17.9%. 

CDE type and year: Publicly traded company, Total, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: $300,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Government-controlled, 2005, Non-Minority; 
Applications: Number: 23; 
Applications: Number successful: 4; 
Applications: Percentage successful: 17.4%; 
Dollar amounts: Applied for: $3,173,100,000; 
Dollar amounts: Awarded: $160,000,000; 
Dollar amounts: Percentage awarded: 5.0%. 

CDE type and year: Government-controlled, 2005, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $120,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Government-controlled, 2006, Non-Minority; 
Applications: Number: 31; 
Applications: Number successful: 4; 
Applications: Percentage successful: 12.9%; 
Dollar amounts: Applied for: $3,489,032,183; 
Dollar amounts: Awarded: $269,000,000; 
Dollar amounts: Percentage awarded: 7.7%. 

CDE type and year: Government-controlled, 2006, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: 0; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Government-controlled, 2007, Non-Minority; 
Applications: Number: 36; 
Applications: Number successful: 10; 
Applications: Percentage successful: 27.8%; 
Dollar amounts: Applied for: $4,115,000,000; 
Dollar amounts: Awarded: $608,000,000; 
Dollar amounts: Percentage awarded: 14.8%. 

CDE type and year: Government-controlled, 2007, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $38,300,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Government-controlled, 2008, Non-Minority; 
Applications: Number: 35; 
Applications: Number successful: 12; 
Applications: Percentage successful: 34.3%; 
Dollar amounts: Applied for: $3,061,680,000; 
Dollar amounts: Awarded: $435,000,000; 
Dollar amounts: Percentage awarded: 14.2%. 

CDE type and year: Government-controlled, 2008, Minority; 
Applications: Number: 4; 
Applications: Number successful: 1; 
Applications: Percentage successful: 25.0%; 
Dollar amounts: Applied for: $328,300,000; 
Dollar amounts: Awarded: $100,000,000; 
Dollar amounts: Percentage awarded: 30.5%. 

CDE type and year: Government-controlled, Total, Non-Minority; 
Applications: Number: 125; 
Applications: Number successful: 30; 
Applications: Percentage successful: 24.0%; 
Dollar amounts: Applied for: $13,838,812,183; 
Dollar amounts: Awarded: $1,472,000,000; 
Dollar amounts: Percentage awarded: 10.6%. 

CDE type and year: Government-controlled, Total, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar amounts: Applied for: $486,600,000; 
Dollar amounts: Awarded: $100,000,000; 
Dollar amounts: Percentage awarded: 20.6%. 

CDE type and year: Thrift or bank holding company, 2005, Non-Minority; 
Applications: Number: 32; 
Applications: Number successful: 6; 
Applications: Percentage successful: 18.8%; 
Dollar amounts: Applied for: $3,464,900,000; 
Dollar amounts: Awarded: $318,000,000; 
Dollar amounts: Percentage awarded: 9.2%. 

CDE type and year: Thrift or bank holding company, 2005, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $185,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Thrift or bank holding company, 2006, Non-Minority; 
Applications: Number: 44; 
Applications: Number successful: 15; 
Applications: Percentage successful: 34.1; 
Dollar amounts: Applied for: $5,519,000,000; 
Dollar amounts: Awarded: $1,322,000,000; 
Dollar amounts: Percentage awarded: 24.0%. 

CDE type and year: Thrift or bank holding company, 2006, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar amounts: Applied for: $691,000,000; 
Dollar amounts: Awarded: $60,000,000; 
Dollar amounts: Percentage awarded: 8.7%. 

CDE type and year: Thrift or bank holding company, 2007, Non-Minority; 
Applications: Number: 41; 
Applications: Number successful: 13; 
Applications: Percentage successful: 31.7%; 
Dollar amounts: Applied for: $4,808,500,000; 
Dollar amounts: Awarded: $1,040,000,000; 
Dollar amounts: Percentage awarded: 21.6%. 

CDE type and year: Thrift or bank holding company, 2007, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $350,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Thrift or bank holding company, 2008, Non-Minority; 
Applications: Number: 37; 
Applications: Number successful: 13; 
Applications: Percentage successful: 35.1%; 
Dollar amounts: Applied for: $4,115,196,839; 
Dollar amounts: Awarded: $763,250,000; 
Dollar amounts: Percentage awarded: 18.5%. 

CDE type and year: Thrift or bank holding company, 2008, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar amounts: Applied for: $79,500,000; 
Dollar amounts: Awarded: $20,000,000; 
Dollar amounts: Percentage awarded: 4.2%. 

CDE type and year: Thrift or bank holding company, Total, Non-Minority; 
Applications: Number: 154; 
Applications: Number successful: 47; 
Applications: Percentage successful: 30.5%; 
Dollar amounts: Applied for: $17,907,596,839; 
Dollar amounts: Awarded: $3,443,250,000; 
Dollar amounts: Percentage awarded: 19.2%. 

CDE type and year: Thrift or bank holding company, Total, Minority; 
Applications: Number: 18; 
Applications: Number successful: 2; 
Applications: Percentage successful: 11.1%; 
Dollar amounts: Applied for: $1,705,500,000; 
Dollar amounts: Awarded: $80,000,000; 
Dollar amounts: Percentage awarded: 4.7%. 

CDE type and year: Other[A], 2005, Non-Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $350,508,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Other[A], 2005, Minority; 
Applications: Number: 2; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $130,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Other[A], 2006, Non-Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $160,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Other[A], 2006, Minority; 
Applications: Number: 2; 
Applications: Number successful: 1; 
Applications: Percentage successful: 50.0%; 
Dollar amounts: Applied for: $250,000,000; 
Dollar amounts: Awarded: $30,000,000; 
Dollar amounts: Percentage awarded: 12.0%. 

CDE type and year: Other[A], 2007, Non-Minority; 
Applications: Number: 2; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $165,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Other[A], 2007, Minority; 
Applications: Number: 4; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $388,300,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Other[A], 2008, Non-Minority; 
Applications: Number: 10; 
Applications: Number successful: 2; 
Applications: Percentage successful: 20.0%; 
Dollar amounts: Applied for: $725,228,700; 
Dollar amounts: Awarded: $110,000,000; 
Dollar amounts: Percentage awarded: 15.2%. 

CDE type and year: Other[A], 2008, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $208,300,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: Other[A], Total, Non-Minority; 
Applications: Number: 18; 
Applications: Number successful: 2; 
Applications: Percentage successful: 11.1%; 
Dollar amounts: Applied for: $1,400,736,700; 
Dollar amounts: Awarded: $110,000,000; 
Dollar amounts: Percentage awarded: 7.9%. 

CDE type and year: Other[A], Total, Minority; 
Applications: Number: 11; 
Applications: Number successful: 1; 
Applications: Percentage successful: 9.1%; 
Dollar amounts: Applied for: $976,600,000; 
Dollar amounts: Awarded: $30,000,000; 
Dollar amounts: Percentage awarded: 3.1%. 

CDE type and year: All applicants[B], 2005, Non-Minority; 
Applications: Number: 190; 
Applications: Number successful: 41; 
Applications: Percentage successful: 21.6%; 
Dollar amounts: Applied for: $20,856,952,880; 
Dollar amounts: Awarded: $2,000,000,000; 
Dollar amounts: Percentage awarded: 9.6%. 

CDE type and year: All applicants[B], 2005, Minority; 
Applications: Number: 13; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0; 
Dollar amounts: Applied for: $1,652,000,000; 
Dollar amounts: Awarded: 0; 
Dollar amounts: Percentage awarded: 0.0. 

CDE type and year: All applicants[B], 2006, Non-Minority; 
Applications: Number: 218; 
Applications: Number successful: 60; 
Applications: Percentage successful: 27.5%; 
Dollar amounts: Applied for: $24,926,316,623; 
Dollar amounts: Awarded: $,008,000,000; 
Dollar amounts: Percentage awarded: 16.1%. 

CDE type and year: All applicants[B], 2006, Minority; 
Applications: Number: 22; 
Applications: Number successful: 3; 
Applications: Percentage successful: 13.6%; 
Dollar amounts: Applied for: $2,281,000,000; 
Dollar amounts: Awarded: $92,000,000; 
Dollar amounts: Percentage awarded: 4.0%. 

CDE type and year: All applicants[B], 2007, Non-Minority; 
Applications: Number: 229; 
Applications: Number successful: 60; 
Applications: Percentage successful: 26.2%; 
Dollar amounts: Applied for: $25,101,742,360; 
Dollar amounts: Awarded: $3,834,000,000; 
Dollar amounts: Percentage awarded: 15.3%. 

CDE type and year: All applicants[B], 2007, Minority; 
Applications: Number: 23; 
Applications: Number successful: 1; 
Applications: Percentage successful: 4.3%; 
Dollar amounts: Applied for: $2,250,358,125; 
Dollar amounts: Awarded: $75,000,000; 
Dollar amounts: Percentage awarded: 3.3%. 

CDE type and year: All applicants[B], 2008, Non-Minority; 
Applications: Number: 209; 
Applications: Number successful: 66; 
Applications: Percentage successful: 31.6%; 
Dollar amounts: Applied for: $18,787,695,539; 
Dollar amounts: Awarded: $3,313,000,000; 
Dollar amounts: Percentage awarded: 17.6%. 

CDE type and year: All applicants[B], 2008, Minority; 
Applications: Number: 30; 
Applications: Number successful: 4; 
Applications: Percentage successful: 13.3%; 
Dollar amounts: Applied for: $2,514,100,000; 
Dollar amounts: Awarded: $187,000,000; 
Dollar amounts: Percentage awarded: 7.4%. 

CDE type and year: All applicants[B], Total, Non-Minority; 
Applications: Number: 846; 
Applications: Number successful: 227; 
Applications: Percentage successful: 26.8%; 
Dollar amounts: Applied for: $89,672,707,402; 
Dollar amounts: Awarded: $13,155,000,000; 
Dollar amounts: Percentage awarded: 14.7%. 

CDE type and year: All applicants[B], Total, Minority; 
Applications: Number: 88; 
Applications: Number successful: 8; 
Applications: Percentage successful: 9.1%; 
Dollar amounts: Applied for: $8,697,458,125; 
Dollar amounts: Awarded: $354,000,000; 
Dollar amounts: Percentage awarded: 4.1%. 

Source: GAO analysis of CDFI Fund data. 

[A] Application data from the CDFI Fund contains the following 
additional CDE types not reported in this table: Small Business 
Investment Companies, Specialized Small Business Investment Companies, 
New Markets Venture Capital Companies, credit unions, faith-based 
organizations, and tribal organizations. We excluded these CDE types 
from our analysis because each category accounts for a less than 1 
percent of the total population of applicants. 

[B] The sum of the individual categories is not equal to the summary 
numbers for the entire applicant pool because the CDE categories are 
not mutually exclusive. For example, in addition to a CDE classifying 
itself as a bank it could also categorize itself as a for-profit 
organization or other applicable categories. 

[End of table] 

[End of section] 

Appendix IV: Summary of Application Scores for Minority and Non-
Minority CDEs by CDE Type and Year, 2005 through 2008: 

CDE type and year: For-profit, 2005; 
Business strategy: Minority: 12.5; 
Business strategy: Non-Minority: 17.7; 
Community impact: Minority: 13.0; 
Community impact: Non-Minority: 16.7; 
Management capacity: Minority: 14.7; 
Management capacity: Non-Minority: 18.4; 
Capitalization strategy: Minority: 12.3; 
Capitalization strategy: Non-Minority: 18.2; 
Total: Minority: 52.4; 
Total: Non-Minority: 71.0. 

CDE type and year: For-profit, 2006; 
Business strategy: Minority: 14.8; 
Business strategy: Non-Minority: 18.0; 
Community impact: Minority: 13.4; 
Community impact: Non-Minority: 17.0; 
Management capacity: Minority: 14.6; 
Management capacity: Non-Minority: 18.3; 
Capitalization strategy: Minority: 12.4; 
Capitalization strategy: Non-Minority: 18.2; 
Total: Minority: 55.1; 
Total: Non-Minority: 71.4. 

CDE type and year: For-profit, 2007; 
Business strategy: Minority: 16.1; 
Business strategy: Non-Minority: 18.5; 
Community impact: Minority: 16.3; 
Community impact: Non-Minority: 17.9; 
Management capacity: Minority: 16.7; 
Management capacity: Non-Minority: 19.0; 
Capitalization strategy: Minority: 15.0; 
Capitalization strategy: Non-Minority: 19.1; 
Total: Minority: 64.1; 
Total: Non-Minority: 74.5. 

CDE type and year: For-profit, 2008; 
Business strategy: Minority: 15.2; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 15.3; 
Community impact: Non-Minority: 17.7; 
Management capacity: Minority: 16.4; 
Management capacity: Non-Minority: 19.2; 
Capitalization strategy: Minority: 15.9; 
Capitalization strategy: Non-Minority: 19.7; 
Total: Minority: 62.9; 
Total: Non-Minority: 75.0. 

CDE type and year: For-profit, Total; 
Business strategy: Minority: 14.9; 
Business strategy: Non-Minority: 18.2; 
Community impact: Minority: 14.7; 
Community impact: Non-Minority: 17.3; 
Management capacity: Minority: 15.7; 
Management capacity: Non-Minority: 18.7; 
Capitalization strategy: Minority: 14.2; 
Capitalization strategy: Non-Minority: 18.8; 
Total: Minority: 59.5; 
Total: Non-Minority: 73.0. 

CDE type and year: Nonprofit, 2005; 
Business strategy: Minority: 16.9; 
Business strategy: Non-Minority: 17.4; 
Community impact: Minority: 16.7; 
Community impact: Non-Minority: 17.5; 
Management capacity: Minority: 17.1; 
Management capacity: Non-Minority: 17.7; 
Capitalization strategy: Minority: 16.9; 
Capitalization strategy: Non-Minority: 16.5; 
Total: Minority: 67.6; 
Total: Non-Minority: 69.1. 

CDE type and year: Nonprofit, 2006; 
Business strategy: Minority: 19.9; 
Business strategy: Non-Minority: 18.5; 
Community impact: Minority: 19.9; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 19.6; 
Management capacity: Non-Minority: 18.1; 
Capitalization strategy: Minority: 17.4; 
Capitalization strategy: Non-Minority: 17.4; 
Total: Minority: 76.7; 
Total: Non-Minority: 72.1. 

CDE type and year: Nonprofit, 2007; 
Business strategy: Minority: 14.3; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 14.7; 
Community impact: Non-Minority: 18.3; 
Management capacity: Minority: 14.0; 
Management capacity: Non-Minority: 18.3; 
Capitalization strategy: Minority: 14.0; 
Capitalization strategy: Non-Minority: 17.9; 
Total: Minority: 57.0; 
Total: Non-Minority: 72.9. 

CDE type and year: Nonprofit, 2008; 
Business strategy: Minority: 17.4; 
Business strategy: Non-Minority: 19.0; 
Community impact: Minority: 17.0; 
Community impact: Non-Minority: 18.7; 
Management capacity: Minority: 17.0; 
Management capacity: Non-Minority: 19.4; 
Capitalization strategy: Minority: 16.0; 
Capitalization strategy: Non-Minority: 19.5; 
Total: Minority: 67.5; 
Total: Non-Minority: 76.6. 

CDE type and year: Nonprofit, Total; 
Business strategy: Minority: 17.2; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 17.0; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 16.8; 
Management capacity: Non-Minority: 18.4; 
Capitalization strategy: Minority: 15.9; 
Capitalization strategy: Non-Minority: 17.9; 
Total: Minority: 66.8; 
Total: Non-Minority: 72.9. 

CDE type and year: Certified CDFIs, 2005; 
Business strategy: Minority: 17.2; 
Business strategy: Non-Minority: 20.1; 
Community impact: Minority: 14.8; 
Community impact: Non-Minority: 19.5; 
Management capacity: Minority: 17.4; 
Management capacity: Non-Minority: 19.7; 
Capitalization strategy: Minority: 14.9; 
Capitalization strategy: Non-Minority: 18.6; 
Total: Minority: 64.3; 
Total: Non-Minority: 77.8. 

CDE type and year: Certified CDFIs, 2006; 
Business strategy: Minority: 19.6; 
Business strategy: Non-Minority: 20.2; 
Community impact: Minority: 18.7; 
Community impact: Non-Minority: 19.8; 
Management capacity: Minority: 19.2; 
Management capacity: Non-Minority: 19.6; 
Capitalization strategy: Minority: 16.0; 
Capitalization strategy: Non-Minority: 18.7; 
Total: Minority: 73.4; 
Total: Non-Minority: 78.2. 

CDE type and year: Certified CDFIs, 2007; 
Business strategy: Minority: 18.9; 
Business strategy: Non-Minority: 19.0; 
Community impact: Minority: 18.9; 
Community impact: Non-Minority: 19.6; 
Management capacity: Minority: 17.7; 
Management capacity: Non-Minority: 19.6; 
Capitalization strategy: Minority: 16.2; 
Capitalization strategy: Non-Minority: 18.4; 
Total: Minority: 71.7; 
Total: Non-Minority: 76.7. 

CDE type and year: Certified CDFIs, 2008; 
Business strategy: Minority: 17.9; 
Business strategy: Non-Minority: 20.5; 
Community impact: Minority: 17.8; 
Community impact: Non-Minority: 20.3; 
Management capacity: Minority: 18.2; 
Management capacity: Non-Minority: 21.3; 
Capitalization strategy: Minority: 16.0; 
Capitalization strategy: Non-Minority: 20.5; 
Total: Minority: 70.0; 
Total: Non-Minority: 82.6. 

CDE type and year: Certified CDFIs, Total; 
Business strategy: Minority: 18.6; 
Business strategy: Non-Minority: 20.0; 
Community impact: Minority: 17.9; 
Community impact: Non-Minority: 19.8; 
Management capacity: Minority: 18.3; 
Management capacity: Non-Minority: 20.1; 
Capitalization strategy: Minority: 15.9; 
Capitalization strategy: Non-Minority: 19.2; 
Total: Minority: 70.7; 
Total: Non-Minority: 79.1. 

CDE type and year: Publicly traded company, 2005; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 19.2; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 17.5; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 19.9; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 19.9; 
Total: Minority: 0.0; 
Total: Non-Minority: 76.4. 

CDE type and year: Publicly traded company, 2006; 
Business strategy: Minority: 20.7; 
Business strategy: Non-Minority: 20.4; 
Community impact: Minority: 18.7; 
Community impact: Non-Minority: 18.6; 
Management capacity: Minority: 19.3; 
Management capacity: Non-Minority: 20.8; 
Capitalization strategy: Minority: 18.7; 
Capitalization strategy: Non-Minority: 21.1; 
Total: Minority: 77.3; 
Total: Non-Minority: 80.9. 

CDE type and year: Publicly traded company, 2007; 
Business strategy: Minority: 17.3; 
Business strategy: Non-Minority: 20.0; 
Community impact: Minority: 18.3; 
Community impact: Non-Minority: 19.5; 
Management capacity: Minority: 17.0; 
Management capacity: Non-Minority: 21.0; 
Capitalization strategy: Minority: 19.0; 
Capitalization strategy: Non-Minority: 21.3; 
Total: Minority: 71.7; 
Total: Non-Minority: 81.8. 

CDE type and year: Publicly traded company, 2008; 
Business strategy: Minority: 15.3; 
Business strategy: Non-Minority: 19.0; 
Community impact: Minority: 14.3; 
Community impact: Non-Minority: 18.6; 
Management capacity: Minority: 18.3; 
Management capacity: Non-Minority: 19.8; 
Capitalization strategy: Minority: 12.0; 
Capitalization strategy: Non-Minority: 20.9; 
Total: Minority: 60.0; 
Total: Non-Minority: 78.3. 

CDE type and year: Publicly traded company, Total; 
Business strategy: Minority: 17.8; 
Business strategy: Non-Minority: 19.7; 
Community impact: Minority: 17.1; 
Community impact: Non-Minority: 18.6; 
Management capacity: Minority: 18.2; 
Management capacity: Non-Minority: 20.4; 
Capitalization strategy: Minority: 16.6; 
Capitalization strategy: Non-Minority: 20.8; 
Total: Minority: 69.7; 
Total: Non-Minority: 79.4. 

CDE type and year: Government-controlled, 2005; 
Business strategy: Minority: 12.3; 
Business strategy: Non-Minority: 17.7; 
Community impact: Minority: 15.3; 
Community impact: Non-Minority: 17.5; 
Management capacity: Minority: 18.7; 
Management capacity: Non-Minority: 17.8; 
Capitalization strategy: Minority: 18.7; 
Capitalization strategy: Non-Minority: 17.4; 
Total: Minority: 65.0; 
Total: Non-Minority: 70.4. 

CDE type and year: Government-controlled, 2006; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 17.9; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 17.6; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 17.0; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 17.2; 
Total: Minority: 0.0; 
Total: Non-Minority: 69.7. 

CDE type and year: Government-controlled, 2007; 
Business strategy: Minority: 21.0; 
Business strategy: Non-Minority: 18.9; 
Community impact: Minority: 19.7; 
Community impact: Non-Minority: 18.7; 
Management capacity: Minority: 17.0; 
Management capacity: Non-Minority: 18.6; 
Capitalization strategy: Minority: 18.0; 
Capitalization strategy: Non-Minority: 18.4; 
Total: Minority: 75.7; 
Total: Non-Minority: 74.6. 

CDE type and year: Government-controlled, 2008; 
Business strategy: Minority: 19.0; 
Business strategy: Non-Minority: 18.9; 
Community impact: Minority: 19.8; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 19.5; 
Management capacity: Non-Minority: 18.5; 
Capitalization strategy: Minority: 18.5; 
Capitalization strategy: Non-Minority: 19.5; 
Total: Minority: 76.8; 
Total: Non-Minority: 75.1. 

CDE type and year: Government-controlled, Total; 
Business strategy: Minority: 18.2; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 19.1; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 18.9; 
Management capacity: Non-Minority: 18.0; 
Capitalization strategy: Minority: 18.4; 
Capitalization strategy: Non-Minority: 18.2; 
Total: Minority: 74.7; 
Total: Non-Minority: 72.7. 

CDE type and year: Thrift or bank holding company, 2005; 
Business strategy: Minority: 16.0; 
Business strategy: Non-Minority: 18.5; 
Community impact: Minority: 15.9; 
Community impact: Non-Minority: 16.3; 
Management capacity: Minority: 15.9; 
Management capacity: Non-Minority: 18.8; 
Capitalization strategy: Minority: 14.7; 
Capitalization strategy: Non-Minority: 18.9; 
Total: Minority: 62.4; 
Total: Non-Minority: 72.5. 

CDE type and year: Thrift or bank holding company, 2006; 
Business strategy: Minority: 19.3; 
Business strategy: Non-Minority: 19.7; 
Community impact: Minority: 17.4; 
Community impact: Non-Minority: 18.7; 
Management capacity: Minority: 18.9; 
Management capacity: Non-Minority: 20.2; 
Capitalization strategy: Minority: 15.4; 
Capitalization strategy: Non-Minority: 19.8; 
Total: Minority: 71.0; 
Total: Non-Minority: 78.3. 

CDE type and year: Thrift or bank holding company, 2007; 
Business strategy: Minority: 19.3; 
Business strategy: Non-Minority: 19.0; 
Community impact: Minority: 19.0; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 18.4; 
Management capacity: Non-Minority: 19.8; 
Capitalization strategy: Minority: 17.0; 
Capitalization strategy: Non-Minority: 20.2; 
Total: Minority: 73.8; 
Total: Non-Minority: 77.2. 

CDE type and year: Thrift or bank holding company, 2008; 
Business strategy: Minority: 18.1; 
Business strategy: Non-Minority: 19.6; 
Community impact: Minority: 17.7; 
Community impact: Non-Minority: 19.0; 
Management capacity: Minority: 18.9; 
Management capacity: Non-Minority: 20.3; 
Capitalization strategy: Minority: 16.9; 
Capitalization strategy: Non-Minority: 20.4; 
Total: Minority: 71.6; 
Total: Non-Minority: 79.2. 

CDE type and year: Thrift or bank holding company, Total; 
Business strategy: Minority: 18.4; 
Business strategy: Non-Minority: 19.2; 
Community impact: Minority: 17.5; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 18.3; 
Management capacity: Non-Minority: 19.8; 
Capitalization strategy: Minority: 16.1; 
Capitalization strategy: Non-Minority: 19.8; 
Total: Minority: 70.2; 
Total: Non-Minority: 77.0. 

CDE type and year: Other[A], 2005; 
Business strategy: Minority: 12.0; 
Business strategy: Non-Minority: 16.2; 
Community impact: Minority: 11.7; 
Community impact: Non-Minority: 17.0; 
Management capacity: Minority: 10.2; 
Management capacity: Non-Minority: 17.2; 
Capitalization strategy: Minority: 11.2; 
Capitalization strategy: Non-Minority: 14.2; 
Total: Minority: 45.0; 
Total: Non-Minority: 64.7. 

CDE type and year: Other[A], 2006; 
Business strategy: Minority: 19.0; 
Business strategy: Non-Minority: 15.3; 
Community impact: Minority: 19.5; 
Community impact: Non-Minority: 16.1; 
Management capacity: Minority: 20.3; 
Management capacity: Non-Minority: 17.3; 
Capitalization strategy: Minority: 18.5; 
Capitalization strategy: Non-Minority: 17.3; 
Total: Minority: 77.3; 
Total: Non-Minority: 66.1. 

CDE type and year: Other[A], 2007; 
Business strategy: Minority: 15.5; 
Business strategy: Non-Minority: 15.7; 
Community impact: Minority: 15.6; 
Community impact: Non-Minority: 14.2; 
Management capacity: Minority: 15.3; 
Management capacity: Non-Minority: 15.8; 
Capitalization strategy: Minority: 13.3; 
Capitalization strategy: Non-Minority: 14.2; 
Total: Minority: 59.8; 
Total: Non-Minority: 59.8. 

CDE type and year: Other[A], 2008; 
Business strategy: Minority: 15.2; 
Business strategy: Non-Minority: 13.4; 
Community impact: Minority: 14.9; 
Community impact: Non-Minority: 12.6; 
Management capacity: Minority: 14.1; 
Management capacity: Non-Minority: 14.9; 
Capitalization strategy: Minority: 13.2; 
Capitalization strategy: Non-Minority: 15.1; 
Total: Minority: 57.4; 
Total: Non-Minority: 55.9. 

CDE type and year: Other[A], Total; 
Business strategy: Minority: 15.4; 
Business strategy: Non-Minority: 14.4; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 14.1; 
Management capacity: Minority: 15.0; 
Management capacity: Non-Minority: 15.8; 
Capitalization strategy: Minority: 13.8; 
Capitalization strategy: Non-Minority: 15.2; 
Total: Minority: 59.6; 
Total: Non-Minority: 59.5. 

CDE type and year: All applicants[B], 2005; 
Business strategy: Minority: 13.5; 
Business strategy: Non-Minority: 17.6; 
Community impact: Minority: 13.8; 
Community impact: Non-Minority: 17.0; 
Management capacity: Minority: 15.2; 
Management capacity: Non-Minority: 18.1; 
Capitalization strategy: Minority: 13.4; 
Capitalization strategy: Non-Minority: 17.6; 
Total: Minority: 55.9; 
Total: Non-Minority: 70.3. 

CDE type and year: All applicants[B], 2006; 
Business strategy: Minority: 16.4; 
Business strategy: Non-Minority: 18.1; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 17.4; 
Management capacity: Minority: 16.2; 
Management capacity: Non-Minority: 18.2; 
Capitalization strategy: Minority: 14.0; 
Capitalization strategy: Non-Minority: 17.9; 
Total: Minority: 62.0; 
Total: Non-Minority: 71.6. 

CDE type and year: All applicants[B], 2007; 
Business strategy: Minority: 15.4; 
Business strategy: Non-Minority: 18.5; 
Community impact: Minority: 15.7; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 15.8; 
Management capacity: Non-Minority: 18.8; 
Capitalization strategy: Minority: 14.7; 
Capitalization strategy: Non-Minority: 18.6; 
Total: Minority: 61.6; 
Total: Non-Minority: 74.0. 

CDE type and year: All applicants[B], 2008; 
Business strategy: Minority: 16.0; 
Business strategy: Non-Minority: 18.7; 
Community impact: Minority: 15.9; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 16.6; 
Management capacity: Non-Minority: 19.3; 
Capitalization strategy: Minority: 16.0; 
Capitalization strategy: Non-Minority: 19.6; 
Total: Minority: 64.4; 
Total: Non-Minority: 75.7. 

CDE type and year: All applicants[B], Total; 
Business strategy: Minority: 15.6; 
Business strategy: Non-Minority: 18.3; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 17.7; 
Management capacity: Minority: 16.1; 
Management capacity: Non-Minority: 18.6; 
Capitalization strategy: Minority: 14.7; 
Capitalization strategy: Non-Minority: 18.5; 
Total: Minority: 61.8; 
Total: Non-Minority: 73.0. 

[A] The CDFI Fund collects applicant information for the following 
types of CDEs included in this category: Small Business Investment 
Companies, Specialized Small Business Investment Companies, New Markets 
Venture Capital Companies, credit unions, faith-based organizations, 
and tribal organizations. We included these CDE types in a combined 
"other" category because each category accounts for a less than 1 
percent of the total population of applicants. 

[B] The sum of the individual categories is not equal to the summary 
numbers for the entire applicant pool because the CDE categories are 
not mutually exclusive. For example, in addition to a CDE classifying 
itself as a bank it could also categorize itself as a for-profit 
organization or other applicable categories. 

[End of table] 

[End of section] 

Appendix V: Summary of Application Scores for Minority and Non-Minority 
CDEs by CDE Type and Asset Size, 2005 through 2008: 

CDE type and size[A]: For-profit: Largest; 
Business strategy: Minority: 12.3; 
Business strategy: Non-Minority: 19.5; 
Community impact: Minority: 15.3; 
Community impact: Non-Minority: 18.3; 
Management capacity: Minority: 18.7; 
Management capacity: Non-Minority: 20.1; 
Capitalization strategy: Minority: 18.7; 
Capitalization strategy: Non-Minority: 20.9; 
Total: Minority: 65.0; 
Total: Non-Minority: 78.7. 

CDE type and size[A]: For-profit: Second largest; 
Business strategy: Minority: 18.8; 
Business strategy: Non-Minority: 18.6; 
Community impact: Minority: 18.1; 
Community impact: Non-Minority: 17.5; 
Management capacity: Minority: 19.6; 
Management capacity: Non-Minority: 19.1; 
Capitalization strategy: Minority: 17.8; 
Capitalization strategy: Non-Minority: 19.0; 
Total: Minority: 74.3; 
Total: Non-Minority: 74.2. 

CDE type and size[A]: For-profit: Largest; 
Business strategy: Minority: 
Business strategy: Non-Minority: 
Community impact: Minority: 
Community impact: Non-Minority: 
Management capacity: Minority: 
Management capacity: Non-Minority: 
Capitalization strategy: Minority: 
Capitalization strategy: Non-Minority: 
Total: Minority: 
Total: Non-Minority: 

CDE type and size[A]: For-profit: Middle; 
Business strategy: Minority: 17.0; 
Business strategy: Non-Minority: 18.6; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 17.7; 
Management capacity: Minority: 15.7; 
Management capacity: Non-Minority: 19.1; 
Capitalization strategy: Minority: 14.1; 
Capitalization strategy: Non-Minority: 18.7; 
Total: Minority: 62.1; 
Total: Non-Minority: 74.1. 

CDE type and size[A]: For-profit: Second smallest; 
Business strategy: Minority: 15.0; 
Business strategy: Non-Minority: 18.8; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 16.0; 
Management capacity: Non-Minority: 18.9; 
Capitalization strategy: Minority: 16.0; 
Capitalization strategy: Non-Minority: 18.9; 
Total: Minority: 62.5; 
Total: Non-Minority: 74.7. 

CDE type and size[A]: For-profit: Smallest; 
Business strategy: Minority: 9.7; 
Business strategy: Non-Minority: 14.7; 
Community impact: Minority: 10.1; 
Community impact: Non-Minority: 14.5; 
Management capacity: Minority: 11.2; 
Management capacity: Non-Minority: 15.6; 
Capitalization strategy: Minority: 9.2; 
Capitalization strategy: Non-Minority: 15.2; 
Total: Minority: 40.1; 
Total: Non-Minority: 60.1. 

CDE type and size[A]: For-profit: total; 
Business strategy: Minority: 14.9; 
Business strategy: Non-Minority: 18.2; 
Community impact: Minority: 14.7; 
Community impact: Non-Minority: 17.3; 
Management capacity: Minority: 15.7; 
Management capacity: Non-Minority: 18.7; 
Capitalization strategy: Minority: 14.2; 
Capitalization strategy: Non-Minority: 18.8; 
Total: Minority: 59.5; 
Total: Non-Minority: 73.0. 

CDE type and size[A]: Nonprofit: Largest; 
Business strategy: Minority: 20.7; 
Business strategy: Non-Minority: 20.0; 
Community impact: Minority: 21.0; 
Community impact: Non-Minority: 19.6; 
Management capacity: Minority: 23.0; 
Management capacity: Non-Minority: 19.7; 
Capitalization strategy: Minority: 22.0; 
Capitalization strategy: Non-Minority: 20.2; 
Total: Minority: 86.7; 
Total: Non-Minority: 79.5. 

CDE type and size[A]: Nonprofit: Second largest; 
Business strategy: Minority: 20.2; 
Business strategy: Non-Minority: 19.6; 
Community impact: Minority: 21.2; 
Community impact: Non-Minority: 19.5; 
Management capacity: Minority: 21.9; 
Management capacity: Non-Minority: 19.3; 
Capitalization strategy: Minority: 20.6; 
Capitalization strategy: Non-Minority: 19.9; 
Total: Minority: 83.9; 
Total: Non-Minority: 78.2; 

CDE type and size[A]: Nonprofit: Middle; 
Business strategy: Minority: 18.0; 
Business strategy: Non-Minority: 19.4; 
Community impact: Minority: 17.3; 
Community impact: Non-Minority: 19.1; 
Management capacity: Minority: 15.9; 
Management capacity: Non-Minority: 19.5; 
Capitalization strategy: Minority: 16.3; 
Capitalization strategy: Non-Minority: 18.8; 
Total: Minority: 67.5; 
Total: Non-Minority: 76.8. 

CDE type and size[A]: Nonprofit: Second Smallest; 
Business strategy: Minority: 19.6; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 19.3; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 17.0; 
Management capacity: Non-Minority: 18.3; 
Capitalization strategy: Minority: 15.1; 
Capitalization strategy: Non-Minority: 17.8; 
Total: Minority: 71.0; 
Total: Non-Minority: 72.6. 

CDE type and size[A]: Nonprofit: Smallest; 
Business strategy: Minority: 14.1; 
Business strategy: Non-Minority: 15.1; 
Community impact: Minority: 13.9; 
Community impact: Non-Minority: 15.1; 
Management capacity: Minority: 14.1; 
Management capacity: Non-Minority: 15.6; 
Capitalization strategy: Minority: 12.9; 
Capitalization strategy: Non-Minority: 14.2; 
Total: Minority: 55.1; 
Total: Non-Minority: 60.0. 

CDE type and size[A]: Nonprofit: total; 
Business strategy: Minority: 17.1; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 17.0; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 16.8; 
Management capacity: Non-Minority: 18.4; 
Capitalization strategy: Minority: 15.9; 
Capitalization strategy: Non-Minority: 17.9; 
Total: Minority: 66.8; 
Total: Non-Minority: 72.9. 

CDE type and size[A]: Certified CDFIs: Largest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 17.8; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 17.8; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 18.5; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 19.7; 
Total: Minority: 0.0; 
Total: Non-Minority: 73.7. 

CDE type and size[A]: Certified CDFIs: Second largest; 
Business strategy: Minority: 19.5; 
Business strategy: Non-Minority: 21.0; 
Community impact: Minority: 19.1; 
Community impact: Non-Minority: 20.2; 
Management capacity: Minority: 20.2; 
Management capacity: Non-Minority: 21.8; 
Capitalization strategy: Minority: 17.1; 
Capitalization strategy: Non-Minority: 20.7; 
Total: Minority: 75.9; 
Total: Non-Minority: 83.6. 

CDE type and size[A]: Certified CDFIs: Middle; 
Business strategy: Minority: 17.3; 
Business strategy: Non-Minority: 20.7; 
Community impact: Minority: 15.6; 
Community impact: Non-Minority: 20.6; 
Management capacity: Minority: 16.4; 
Management capacity: Non-Minority: 20.9; 
Capitalization strategy: Minority: 14.4; 
Capitalization strategy: Non-Minority: 19.8; 
Total: Minority: 63.7; 
Total: Non-Minority: 81.9. 

CDE type and size[A]: Certified CDFIs: Second smallest; 
Business strategy: Minority: 18.5; 
Business strategy: Non-Minority: 19.7; 
Community impact: Minority: 18.0; 
Community impact: Non-Minority: 19.5; 
Management capacity: Minority: 18.0; 
Management capacity: Non-Minority: 19.7; 
Capitalization strategy: Minority: 15.2; 
Capitalization strategy: Non-Minority: 19.1; 
Total: Minority: 69.6; 
Total: Non-Minority: 78.0. 

CDE type and size[A]: Certified CDFIs: Smallest; 
Business strategy: Minority: 19.8; 
Business strategy: Non-Minority: 16.6; 
Community impact: Minority: 20.3; 
Community impact: Non-Minority: 16.8; 
Management capacity: Minority: 18.8; 
Management capacity: Non-Minority: 15.5; 
Capitalization strategy: Minority: 17.9; 
Capitalization strategy: Non-Minority: 12.4; 
Total: Minority: 76.8; 
Total: Non-Minority: 61.4. 

CDE type and size[A]: Certified CDFIs: total; 
Business strategy: Minority: 18.6; 
Business strategy: Non-Minority: 20.0; 
Community impact: Minority: 17.9; 
Community impact: Non-Minority: 19.8; 
Management capacity: Minority: 18.3; 
Management capacity: Non-Minority: 20.1; 
Capitalization strategy: Minority: 15.9; 
Capitalization strategy: Non-Minority: 19.2; 
Total: Minority: 70.7; 
Total: Non-Minority: 79.1. 

CDE type and size[A]: Publicly traded company: Largest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 20.1; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 19.0; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 20.9; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 21.2; 
Total: Minority: 0.0; 
Total: Non-Minority: 81.1 

CDE type and size[A]: Publicly traded company: Second largest; 
Business strategy: Minority: 17.8; 
Business strategy: Non-Minority: 18.5; 
Community impact: Minority: 17.1; 
Community impact: Non-Minority: 17.5; 
Management capacity: Minority: 18.2; 
Management capacity: Non-Minority: 19.3; 
Capitalization strategy: Minority: 16.6; 
Capitalization strategy: Non-Minority: 19.3; 
Total: Minority: 69.7; 
Total: Non-Minority: 74.5. 

CDE type and size[A]: Publicly traded company: Middle; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 18.7; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 16.9; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 18.4; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 19.1; 
Total: Minority: 0.0; 
Total: Non-Minority: 73.1. 

CDE type and size[A]: Publicly traded company: Second smallest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 17.3; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 16.2; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 17.8; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 20.0; 
Total: Minority: 0.0; 
Total: Non-Minority: 71.3. 

CDE type and size[A]: Publicly traded company: Smallest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 0.0; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 0.0; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 0.0; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 0.0; 
Total: Minority: 0.0; 
Total: Non-Minority: 0.0. 

CDE type and size[A]: Publicly traded company: total; 
Business strategy: Minority: 17.8; 
Business strategy: Non-Minority: 19.7; 
Community impact: Minority: 17.1; 
Community impact: Non-Minority: 18.6; 
Management capacity: Minority: 18.2; 
Management capacity: Non-Minority: 20.4; 
Capitalization strategy: Minority: 16.6; 
Capitalization strategy: Non-Minority: 20.8; 
Total: Minority: 69.7; 
Total: Non-Minority: 79.4. 

CDE type and size[A]: Government-controlled: Largest; 
Business strategy: Minority: 16.5; 
Business strategy: Non-Minority: 19.7; 
Community impact: Minority: 18.2; 
Community impact: Non-Minority: 19.2; 
Management capacity: Minority: 20.8; 
Management capacity: Non-Minority: 19.7; 
Capitalization strategy: Minority: 20.3; 
Capitalization strategy: Non-Minority: 19.8; 
Total: Minority: 75.8; 
Total: Non-Minority: 78.5. 

CDE type and size[A]: Government-controlled: Second largest; 
Business strategy: Minority: 19.7; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 20.5; 
Community impact: Non-Minority: 18.5; 
Management capacity: Minority: 20.8; 
Management capacity: Non-Minority: 18.0; 
Capitalization strategy: Minority: 18.3; 
Capitalization strategy: Non-Minority: 18.7; 
Total: Minority: 79.3; 
Total: Non-Minority: 73.6. 

CDE type and size[A]: Government-controlled: Middle; 
Business strategy: Minority: 18.5; 
Business strategy: Non-Minority: 17.9; 
Community impact: Minority: 18.5; 
Community impact: Non-Minority: 17.4; 
Management capacity: Minority: 15.2; 
Management capacity: Non-Minority: 17.1; 
Capitalization strategy: Minority: 16.7; 
Capitalization strategy: Non-Minority: 17.0; 
Total: Minority: 68.8; 
Total: Non-Minority: 69.3. 

CDE type and size[A]: Government-controlled: Second smallest; 
Business strategy: Minority: 0.0;
Business strategy: Non-Minority: 17.0; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 16.4; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 16.8; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 16.3; 
Total: Minority: 0.0; 
Total: Non-Minority: 66.5. 

CDE type and size[A]: Government-controlled: Smallest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 16.6; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 15.4; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 15.4; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 16.1; 
Total: Minority: 0.0; 
Total: Non-Minority: 63.6. 

CDE type and size[A]: Government-controlled: total; 
Business strategy: Minority: 18.2; 
Business strategy: Non-Minority: 18.4; 
Community impact: Minority: 19.1; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 18.9; 
Management capacity: Non-Minority: 18.0; 
Capitalization strategy: Minority: 18.4; 
Capitalization strategy: Non-Minority: 18.2; 
Total: Minority: 74.7; 
Total: Non-Minority: 72.7. 

CDE type and size[A]: Thrift or bank holding company: Largest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 19.7; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 18.6; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 20.5; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 21.1; 
Total: Minority: 0.0; 
Total: Non-Minority: 80.0. 

CDE type and size[A]: Thrift or bank holding company: Second largest; 
Business strategy: Minority: 19.6; 
Business strategy: Non-Minority: 18.1; 
Community impact: Minority: 18.7; 
Community impact: Non-Minority: 16.6; 
Management capacity: Minority: 20.1; 
Management capacity: Non-Minority: 18.5; 
Capitalization strategy: Minority: 17.5; 
Capitalization strategy: Non-Minority: 17.6; 
Total: Minority: 75.9; 
Total: Non-Minority: 70.8. 

CDE type and size[A]: Thrift or bank holding company: Middle; 
Business strategy: Minority: 16.5; 
Business strategy: Non-Minority: 18.8; 
Community impact: Minority: 15.9; 
Community impact: Non-Minority: 18.3; 
Management capacity: Minority: 15.5; 
Management capacity: Non-Minority: 19.5; 
Capitalization strategy: Minority: 14.1; 
Capitalization strategy: Non-Minority: 17.7; 
Total: Minority: 62.0; 
Total: Non-Minority: 74.3. 

CDE type and size[A]: Thrift or bank holding company: Second smallest; 
Business strategy: Minority: 17.1; 
Business strategy: Non-Minority: 21.1; 
Community impact: Minority: 16.2; 
Community impact: Non-Minority: 19.5; 
Management capacity: Minority: 16.8; 
Management capacity: Non-Minority: 19.6; 
Capitalization strategy: Minority: 14.4; 
Capitalization strategy: Non-Minority: 19.2; 
Total: Minority: 64.4; 
Total: Non-Minority: 79.4. 

CDE type and size[A]: Thrift or bank holding company: Smallest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 15.0; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 15.8; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 17.8; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 17.2; 
Total: Minority: 0.0; 
Total: Non-Minority: 65.8. 

CDE type and size[A]: Thrift or bank holding company: total; 
Business strategy: Minority: 18.4; 
Business strategy: Non-Minority: 19.2; 
Community impact: Minority: 17.5; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 18.3; 
Management capacity: Non-Minority: 19.8; 
Capitalization strategy: Minority: 16.1; 
Capitalization strategy: Non-Minority: 19.8; 
Total: Minority: 70.2; 
Total: Non-Minority: 77.0. 

CDE type and size[A]: Other[B]: Largest; 
Business strategy: Minority: 0.0; 
Business strategy: Non-Minority: 0.0; 
Community impact: Minority: 0.0; 
Community impact: Non-Minority: 0.0; 
Management capacity: Minority: 0.0; 
Management capacity: Non-Minority: 0.0; 
Capitalization strategy: Minority: 0.0; 
Capitalization strategy: Non-Minority: 0.0; 
Total: Minority: 0.0; 
Total: Non-Minority: 0.0. 

CDE type and size[A]: Other[B]: Second largest; 
Business strategy: Minority: 17.8; 
Business strategy: Non-Minority: 18.8; 
Community impact: Minority: 18.3; 
Community impact: Non-Minority: 18.0; 
Management capacity: Minority: 19.7; 
Management capacity: Non-Minority: 19.2; 
Capitalization strategy: Minority: 11.7; 
Capitalization strategy: Non-Minority: 20.4; 
Total: Minority: 66.7; 
Total: Non-Minority: 76.4. 

CDE type and size[A]: Other[B]: Middle; 
Business strategy: Minority: 16.9; 
Business strategy: Non-Minority: 16.2; 
Community impact: Minority: 16.7; 
Community impact: Non-Minority: 15.8; 
Management capacity: Minority: 14.8; 
Management capacity: Non-Minority: 17.3; 
Capitalization strategy: Minority: 15.4; 
Capitalization strategy: Non-Minority: 15.1; 
Total: Minority: 63.8; 
Total: Non-Minority: 64.4. 

CDE type and size[A]: Other[B]: Second smallest; 
Business strategy: Minority: 18.0; 
Business strategy: Non-Minority: 16.0; 
Community impact: Minority: 19.7; 
Community impact: Non-Minority: 16.0; 
Management capacity: Minority: 20.7; 
Management capacity: Non-Minority: 15.0; 
Capitalization strategy: Minority: 18.3; 
Capitalization strategy: Non-Minority: 18.2; 
Total: Minority: 76.7; 
Total: Non-Minority: 65.2. 

CDE type and size[A]: Other[B]: Smallest; 
Business strategy: Minority: 14.0; 
Business strategy: Non-Minority: 11.9; 
Community impact: Minority: 13.6; 
Community impact: Non-Minority: 11.6; 
Management capacity: Minority: 13.3; 
Management capacity: Non-Minority: 14.4; 
Capitalization strategy: Minority: 12.7; 
Capitalization strategy: Non-Minority: 12.5; 
Total: Minority: 53.6; 
Total: Non-Minority: 50.3. 

CDE type and size[A]: Other[B]: total; 
Business strategy: Minority: 15.4; 
Business strategy: Non-Minority: 14.4; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 14.1; 
Management capacity: Minority: 15.0; 
Management capacity: Non-Minority: 15.8; 
Capitalization strategy: Minority: 13.8; 
Capitalization strategy: Non-Minority: 15.2; 
Total: Minority: 59.6; 
Total: Non-Minority: 59.5. 

CDE type and size[A]: All applicants[C]: Largest; 
Business strategy: Minority: 21.3; 
Business strategy: Non-Minority: 19.5; 
Community impact: Minority: 20.7; 
Community impact: Non-Minority: 18.5; 
Management capacity: Minority: 22.7; 
Management capacity: Non-Minority: 20.0; 
Capitalization strategy: Minority: 22.3; 
Capitalization strategy: Non-Minority: 20.7; 
Total: Minority: 87.0; 
Total: Non-Minority: 78.7. 

CDE type and size[A]: All applicants[C]: Second largest; 
Business strategy: Minority: 16.6; 
Business strategy: Non-Minority: 18.9; 
Community impact: Minority: 16.7; 
Community impact: Non-Minority: 18.1; 
Management capacity: Minority: 16.4; 
Management capacity: Non-Minority: 19.2; 
Capitalization strategy: Minority: 15.5; 
Capitalization strategy: Non-Minority: 19.3; 
Total: Minority: 65.2; 
Total: Non-Minority: 75.5. 

CDE type and size[A]: All applicants[C]: Middle; 
Business strategy: Minority: 18.3; 
Business strategy: Non-Minority: 19.1; 
Community impact: Minority: 17.6; 
Community impact: Non-Minority: 18.5; 
Management capacity: Minority: 19.1; 
Management capacity: Non-Minority: 19.3; 
Capitalization strategy: Minority: 17.0; 
Capitalization strategy: Non-Minority: 18.7; 
Total: Minority: 72.0; 
Total: Non-Minority: 75.5. 

CDE type and size[A]: All applicants[C]: Second smallest; 
Business strategy: Minority: 18.2; 
Business strategy: Non-Minority: 18.6; 
Community impact: Minority: 16.9; 
Community impact: Non-Minority: 18.2; 
Management capacity: Minority: 17.6; 
Management capacity: Non-Minority: 18.6; 
Capitalization strategy: Minority: 16.1; 
Capitalization strategy: Non-Minority: 18.3; 
Total: Minority: 68.9; 
Total: Non-Minority: 73.7. 

CDE type and size[A]: All applicants[C]: Smallest; 
Business strategy: Minority: 11.7; 
Business strategy: Non-Minority: 14.9; 
Community impact: Minority: 12.1; 
Community impact: Non-Minority: 14.7; 
Management capacity: Minority: 13.1; 
Management capacity: Non-Minority: 15.6; 
Capitalization strategy: Minority: 11.8; 
Capitalization strategy: Non-Minority: 14.9; 
Total: Minority: 48.7; 
Total: Non-Minority: 60.1. 

CDE type and size[A]: All applicants[C]: Total; 
Business strategy: Minority: 15.6; 
Business strategy: Non-Minority: 18.3; 
Community impact: Minority: 15.4; 
Community impact: Non-Minority: 17.7; 
Management capacity: Minority: 16.1; 
Management capacity: Non-Minority: 18.6; 
Capitalization strategy: Minority: 14.7; 
Capitalization strategy: Non-Minority: 18.5; 
Total: Minority: 61.8; 
Total: Non-Minority: 73.0. 

[A] CDEs report the asset size for the applicant CDE and the 
controlling entity of the applicant CDE. In cases where a controlling 
entity reported its asset size we used the controlling entity's asset 
size for this table. In cases where no controlling entity was present, 
we used the applicant's reported asset size for this analysis. The 
asset size ranges for each of the five quintiles are as follows: (1) 
largest quintile, $2,182,706,000,000 to $2,378,496,000, (2) second 
largest quintile, $2,378,495,999 to $226,832,000, (3) middle quintile, 
$226,831,999 to $35,779,943, (4) second smallest quintile, $35,779,942 
to $3,740,000, and (5) smallest quintile, $3,739,999 to $0. 

[B] The CDFI Fund collects applicant information for the following 
types of CDEs included in this category: Small Business Investment 
Companies, Specialized Small Business Investment Companies, New Markets 
Venture Capital Companies, credit unions, faith-based organizations, 
and tribal organizations. We included these CDE types in a combined 
"other" category because each category accounts for a less than 1 
percent of the total population of applicants. 

[C] The sum of the individual categories is not equal to the summary 
numbers for the entire applicant pool because the CDE categories are 
not mutually exclusive. For example, in addition to a CDE classifying 
itself as a bank it could also categorize itself as a for-profit 
organization or other applicable categories. 

[End of table] 

[End of section] 

Appendix VI: NMTC Applications and Dollars for Which Minority and Non- 
Minority CDEs Applied and Received Allocations by Asset Size and CDE 
Type, 2005 through 2008: 

CDE type and size[A]: For Profit: Largest, Non-minority; 
Applications: Number: 151; 
Applications: Number successful: 43; 
Applications: Percentage successful: 28.5%; 
Dollar Amounts: Applied for: $20,578,875,000; 
Dollar Amounts: Awarded: $3,232,250,000; 
Dollar Amounts: Percentage awarded: 15.7%. 

CDE type and size[A]: For Profit: Largest, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0.0%; 
Dollar Amounts: Applied for: $120,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0.0%. 

CDE type and size[A]: For Profit: Second largest, Non-Minority; 
Applications: Number: 111; 
Applications: Number successful: 27; 
Applications: Percentage successful: 24.3%; 
Dollar Amounts: Applied for: $12,036,975,000; 
Dollar Amounts: Awarded: $1,664,000,000; 
Dollar Amounts: Percentage awarded: 13.8%. 

CDE type and size[A]: For Profit: Second largest, Minority; 
Applications: Number: 21; 
Applications: Number successful: 4; 
Applications: Percentage successful: 19.0%; 
Dollar Amounts: Applied for: $2,480,000,000; 
Dollar Amounts: Awarded: $182,000,000; 
Dollar Amounts: Percentage awarded: 7.3%. 

CDE type and size[A]: For Profit: Middle, Non-Minority; 
Applications: Number: 80; 
Applications: Number successful: 20; 
Applications: Percentage successful: 25.0%; 
Dollar Amounts: Applied for: $8,283,580,000; 
Dollar Amounts: Awarded: $1,019,000,000; 
Dollar Amounts: Percentage awarded: 12.3%. 

CDE type and size[A]: For Profit: Middle, Minority; 
Applications: Number: 9; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $844,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: o. 

CDE type and size[A]: For Profit: Second smallest, Non-Minority; 
Applications: Number: 79; 
Applications: Number successful: 21; 
Applications: Percentage successful: 26.6%; 
Dollar Amounts: Applied for: $8,663,993,279; 
Dollar Amounts: Awarded: $1,152,000,000; 
Dollar Amounts: Percentage awarded: 13.3%. 

CDE type and size[A]: For Profit: Second smallest, Minority; 
Applications: Number: 11; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $1,034,358,125; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: For Profit: Smallest, Non-Minority; 
Applications: Number: 97; 
Applications: Number successful: 19; 
Applications: Percentage successful: 19.6%; 
Dollar Amounts: Applied for: $8,634,820,060; 
Dollar Amounts: Awarded: $814,500,000; 
Dollar Amounts: Percentage awarded: 9.4%. 

CDE type and size[A]: For Profit: Smallest, Minority; 
Applications: Number: 18; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $1,990,500,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: For Profit: Total, Non-Minority; 
Applications: Number: 518; 
Applications: Number successful: 130; 
Applications: Percentage successful: 25.1%; 
Dollar Amounts: Applied for: $58,198,243,339; 
Dollar Amounts: Awarded: $7,881,750,000; 
Dollar Amounts: Percentage awarded: 13.5%. 

CDE type and size[A]: For Profit: Total, Non-Minority; 
Applications: Number: 60; 
Applications: Number successful: 4; 
Applications: Percentage successful: 6.7%; 
Dollar Amounts: Applied for: $6,468,858,125; 
Dollar Amounts: Awarded: $182,000,000; 
Dollar Amounts: Percentage awarded: 2.8%. 

CDE type and size[A]: Nonprofit: Largest, Non-Minority; 
Applications: Number: 30; 
Applications: Number successful: 10; 
Applications: Percentage successful: 33.3%; 
Dollar Amounts: Applied for: $3,847,000,000; 
Dollar Amounts: Awarded: $630,000,000; 
Dollar Amounts: Percentage awarded: 16.4%. 

CDE type and size[A]: Nonprofit: Largest, Minority; 
Applications: Number: 1; 
Applications: Number successful: 1; 
Applications: Percentage successful: 100%; 
Dollar Amounts: Applied for: $125,000,000; 
Dollar Amounts: Awarded: $100,000,000; 
Dollar Amounts: Percentage awarded: 80.0%. 

CDE type and size[A]: Nonprofit: Second largest, Non-Minority; 
Applications: Number: 47; 
Applications: Number successful: 19; 
Applications: Percentage successful: 40.4%; 
Dollar Amounts: Applied for: $5,476,500,000; 
Dollar Amounts: Awarded: $1,352,000,000; 
Dollar Amounts: Percentage awarded: 24.7%. 

CDE type and size[A]: Nonprofit: Second largest, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar Amounts: Applied for: $615,000,000; 
Dollar Amounts: Awarded: $40,000,000; 
Dollar Amounts: Percentage awarded: 6.5%. 

CDE type and size[A]: Nonprofit: Middle, Non-Minority; 
Applications: Number: 89; 
Applications: Number successful: 34; 
Applications: Percentage successful: 38.2%; 
Dollar Amounts: Applied for: $8,398,450,000; 
Dollar Amounts: Awarded: $1,903,000,000; 
Dollar Amounts: Percentage awarded: 22.7%. 

CDE type and size[A]: Nonprofit: Middle, Minority; 
Applications: Number: 6; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $416,600,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Nonprofit: Second smallest, Non-Minority; 
Applications: Number: 94; 
Applications: Number successful: 26; 
Applications: Percentage successful: 27.7%; 
Dollar Amounts: Applied for: $8,193,903,063; 
Dollar Amounts: Awarded: $1,213,000,000; 
Dollar Amounts: Percentage awarded: 14.8%. 

CDE type and size[A]: Nonprofit: Second smallest, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $115,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Nonprofit: Smallest, Non-Minority; 
Applications: Number: 59; 
Applications: Number successful: 5; 
Applications: Percentage successful: 8.5%; 
Dollar Amounts: Applied for: $4,826,611,000; 
Dollar Amounts: Awarded: $101,250,000; 
Dollar Amounts: Percentage awarded: 2.1%. 

CDE type and size[A]: Nonprofit: Smallest, Minority; 
Applications: Number: 12; 
Applications: Number successful: 2; 
Applications: Percentage successful: 16.7%; 
Dollar Amounts: Applied for: $957,000,000; 
Dollar Amounts: Awarded: $32,000,000; 
Dollar Amounts: Percentage awarded: 3.3%. 

CDE type and size[A]: Nonprofit: Total, Non-Minority; 
Applications: Number: 319; 
Applications: Number successful: 94; 
Applications: Percentage successful: 29.5%; 
Dollar Amounts: Applied for: $30,742,464,063; 
Dollar Amounts: Awarded: $5,199,250,000; 
Dollar Amounts: Percentage awarded: 16.9%. 

CDE type and size[A]: Nonprofit: Total, Minority; 
Applications: Number: 28; 
Applications: Number successful: 4; 
Applications: Percentage successful: 14.3%; 
Dollar Amounts: Applied for: $2,228,600,000; 
Dollar Amounts: Awarded: $172,000,000; 
Dollar Amounts: Percentage awarded: 7.7%. 

CDE type and size[A]: Certified CDFIs: Largest, Non-Minority; 
Applications: Number: 4; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $472,875,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Certified CDFIs: Largest, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Certified CDFIs: Second largest, Non-Minority; 
Applications: Number: 16; 
Applications: Number successful: 9; 
Applications: Percentage successful: 56.3%; 
Dollar Amounts: Applied for: $1,630,000,000; 
Dollar Amounts: Awarded: $772,000,000; 
Dollar Amounts: Percentage awarded: 47.4%. 

CDE type and size[A]: Certified CDFIs: Second largest, Minority; 
Applications: Number: 10; 
Applications: Number successful: 2; 
Applications: Percentage successful: 20.0%; 
Dollar Amounts: Applied for: $1,095,000,000; 
Dollar Amounts: Awarded: $80,000,000; 
Dollar Amounts: Percentage awarded: 7.3%. 

CDE type and size[A]: Certified CDFIs: Middle, Non-Minority; 
Applications: Number: 49; 
Applications: Number successful: 28; 
Applications: Percentage successful: 57.1%; 
Dollar Amounts: Applied for: $4,787,750,000; 
Dollar Amounts: Awarded: $1,562,000,000; 
Dollar Amounts: Percentage awarded: 32.6%. 

CDE type and size[A]: Certified CDFIs: Middle, Minority; 
Applications: Number: 9; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $631,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Certified CDFIs: Second smallest, Non-Minority; 
Applications: Number: 40; 
Applications: Number successful: 16; 
Applications: Percentage successful: 40.0%; 
Dollar Amounts: Applied for: $3,079,504,719; 
Dollar Amounts: Awarded: $720,000,000; 
Dollar Amounts: Percentage awarded: 23.4%. 

CDE type and size[A]: Certified CDFIs: Second smallest, Minority; 
Applications: Number: 7; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $429,500,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Certified CDFIs: Smallest, Non-Minority; 
Applications: Number: 8; 
Applications: Number successful: 1; 
Applications: Percentage successful: 12.5%; 
Dollar Amounts: Applied for: $412,800,000; 
Dollar Amounts: Awarded: $15,000,000; 
Dollar Amounts: Percentage awarded: 3.6%. 

CDE type and size[A]: Certified CDFIs: Smallest, Minority; 
Applications: Number: 3; 
Applications: Number successful: 1; 
Applications: Percentage successful: 33.3%; 
Dollar Amounts: Applied for: $202,000,000; 
Dollar Amounts: Awarded: $2,000,000; 
Dollar Amounts: Percentage awarded: 1.0%. 

CDE type and size[A]: Certified CDFIs: Total, Non-Minority; 
Applications: Number: 117; 
Applications: Number successful: 54; 
Applications: Percentage successful: 46.2%; 
Dollar Amounts: Applied for: $10,382,929,719; 
Dollar Amounts: Awarded: $3,069,000,000; 
Dollar Amounts: Percentage awarded: 29.6%. 

CDE type and size[A]: Certified CDFIs: Total, Minority; 
Applications: Number: 29; 
Applications: Number successful: 3; 
Applications: Percentage successful: 10.3%; 
Dollar Amounts: Applied for: $2,357,500,000; 
Dollar Amounts: Awarded: $82,000,000; 
Dollar Amounts: Percentage awarded: 3.5%. 

CDE type and size[A]: Publicly traded company: Largest, Non-Minority; 
Applications: Number: 68; 
Applications: Number successful: 25; 
Applications: Percentage successful: 36.8%; 
Dollar Amounts: Applied for: $10,449,800,000; 
Dollar Amounts: Awarded: $1,952,250,000; 
Dollar Amounts: Percentage awarded: 18.7%. 

CDE type and size[A]: Publicly traded company: Largest, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Publicly traded company: Second largest, Non-
Minority; 
Applications: Number: 16; 
Applications: Number successful: 3; 
Applications: Percentage successful: 18.8%; 
Dollar Amounts: Applied for: $1,542,500,000; 
Dollar Amounts: Awarded: $190,000,000; 
Dollar Amounts: Percentage awarded: 12.3%. 

CDE type and size[A]: Publicly traded company: Second largest, 
Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $300,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Publicly traded company: Middle, Non-Minority; 
Applications: Number: 3; 
Applications: Number successful: 1; 
Applications: Percentage successful: 33.3%; 
Dollar Amounts: Applied for: $450,000,000; 
Dollar Amounts: Awarded: $20,000,000; 
Dollar Amounts: Percentage awarded: 4.4%. 

CDE type and size[A]: Publicly traded company: Middle, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0; 

CDE type and size[A]: Publicly traded company: Second smallest, Non-
Minority; 
Applications: Number: 2; 
Applications: Number successful: 1; 
Applications: Percentage successful: 50.0%; 
Dollar Amounts: Applied for: $185,000,000; 
Dollar Amounts: Awarded: $100,000,000; 
Dollar Amounts: Percentage awarded: 54.2%. 

CDE type and size[A]: Publicly traded company: Second smallest, 
Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0; 

CDE type and size[A]: Publicly traded company: Smallest, Non-Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0; 

CDE type and size[A]: Publicly traded company: Smallest, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0; 

CDE type and size[A]: Publicly traded company: total, Non-Minority; 
Applications: Number: 89; 
Applications: Number successful: 30; 
Applications: Percentage successful: 33.7%; 
Dollar Amounts: Applied for: $12,627,300,000; 
Dollar Amounts: Awarded: $2,262,250,000; 
Dollar Amounts: Percentage awarded: 17.9%. 

CDE type and size[A]: Publicly traded company: total, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $300,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Government-controlled: Largest, Non-Minority; 
Applications: Number: 37; 
Applications: Number successful: 10; 
Applications: Percentage successful: 27.0%; 
Dollar Amounts: Applied for: $4,567,000,000; 
Dollar Amounts: Awarded: $630,000,000; 
Dollar Amounts: Percentage awarded: 13.8%. 

CDE type and size[A]: Government-controlled: Largest, Minority; 
Applications: Number: 2; 
Applications: Number successful: 1; 
Applications: Percentage successful: 50.0%; 
Dollar Amounts: Applied for: $245,000,000; 
Dollar Amounts: Awarded: $100,000,000; 
Dollar Amounts: Percentage awarded: 40.8%. 

CDE type and size[A]: Government-controlled: Second largest, Non-
Minority; 
Applications: Number: 39; 
Applications: Number successful: 10; 
Applications: Percentage successful: 25.6%; 
Dollar Amounts: Applied for: $4,263,500,000; 
Dollar Amounts: Awarded: $466,000,000; 
Dollar Amounts: Percentage awarded: 10.9%. 

CDE type and size[A]: Government-controlled: Second largest, Minority; 
Applications: Number: 2; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $165,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Government-controlled: Middle, Non-Minority; 
Applications: Number: 28; 
Applications: Number successful: 8; 
Applications: Percentage successful: 28.6%; 
Dollar Amounts: Applied for: $2,668,280,000; 
Dollar Amounts: Awarded: $290,000,000; 
Dollar Amounts: Percentage awarded: 10.9%. 

CDE type and size[A]: Government-controlled: Middle, Minority; 
Applications: Number: 2; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $76,600,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Government-controlled: Second smallest, Non-
Minority; 
Applications: Number: 15; 
Applications: Number successful: 2; 
Applications: Percentage successful: 13.3%; 
Dollar Amounts: Applied for: $1,610,032,183; 
Dollar Amounts: Awarded: $86,000,000; 
Dollar Amounts: Percentage awarded: 5.3%. 

CDE type and size[A]: Government-controlled: Second smallest, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Government-controlled: Smallest, Non-Minority; 
Applications: Number: 6; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $730,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Government-controlled: Smallest, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Government-controlled: total, Non-Minority; 
Applications: Number: 125; 
Applications: Number successful: 30; 
Applications: Percentage successful: 24.0%; 
Dollar Amounts: Applied for: $13,838,812,183; 
Dollar Amounts: Awarded: $1,472,000,000; 
Dollar Amounts: Percentage awarded: 10.6%. 

CDE type and size[A]: Government-controlled: total, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar Amounts: Applied for: $486,600,000; 
Dollar Amounts: Awarded: $100,000,000; 
Dollar Amounts: Percentage awarded: 20.6%. 

CDE type and size[A]: Thrift or bank holding company: Largest, Non-
Minority; 
Applications: Number: 95; 
Applications: Number successful: 34; 
Applications: Percentage successful: 35.8%; 
Dollar Amounts: Applied for: $12,933,675,000; 
Dollar Amounts: Awarded: $2,654,250,000; 
Dollar Amounts: Percentage awarded: 20.5%. 

CDE type and size[A]: Thrift or bank holding company: Largest, 
Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Thrift or bank holding company: Second largest, 
Non-Minority; 
Applications: Number: 35; 
Applications: Number successful: 5; 
Applications: Percentage successful: 14.3%; 
Dollar Amounts: Applied for: $2,710,900,000; 
Dollar Amounts: Awarded: $229,000,000; 
Dollar Amounts: Percentage awarded: 8.4%. 

CDE type and size[A]: Thrift or bank holding company: Second largest, 
Minority; 
Applications: Number: 10; 
Applications: Number successful: 2; 
Applications: Percentage successful: 20.0%; 
Dollar Amounts: Applied for: $1,155,000,000; 
Dollar Amounts: Awarded: $80,000,000; 
Dollar Amounts: Percentage awarded: 6.9%. 

CDE type and size[A]: Thrift or bank holding company: Middle, Non-
Minority; 
Applications: Number: 16; 
Applications: Number successful: 6; 
Applications: Percentage successful: 37.5%; 
Dollar Amounts: Applied for: $1,388,980,000; 
Dollar Amounts: Awarded: $420,000,000; 
Dollar Amounts: Percentage awarded: 30.2%. 

CDE type and size[A]: Thrift or bank holding company: Middle, Minority; 
Applications: Number: 4; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $316,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Thrift or bank holding company: Second smallest, 
Non-Minority; 
Applications: Number: 5; 
Applications: Number successful: 2; 
Applications: Percentage successful: 40.0%; 
Dollar Amounts: Applied for: $549,041,839; 
Dollar Amounts: Awarded: $140,000,000; 
Dollar Amounts: Percentage awarded: 25.5%. 

CDE type and size[A]: Thrift or bank holding company: Second smallest, 
Minority; 
Applications: Number: 4; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $234,500,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Thrift or bank holding company: Smallest, Non-
Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $325,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Thrift or bank holding company: Smallest, 
Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Thrift or bank holding company: total, Non-
Minority; 
Applications: Number: 154; 
Applications: Number successful: 47; 
Applications: Percentage successful: 30.5%; 
Dollar Amounts: Applied for: $17,907,596,839; 
Dollar Amounts: Awarded: $3,443,250,000; 
Dollar Amounts: Percentage awarded: 19.2%. 

CDE type and size[A]: Thrift or bank holding company: total, Minority; 
Applications: Number: 18; 
Applications: Number successful: 2; 
Applications: Percentage successful: 11.1%; 
Dollar Amounts: Applied for: $1,705,500,000; 
Dollar Amounts: Awarded: $80,000,000; 
Dollar Amounts: Percentage awarded: 4.7%. 

CDE type and size[A]: Other[B]: Largest, Non-Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Largest, Minority; 
Applications: Number: 0; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: 0; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Second largest, Non-Minority; 
Applications: Number: 3; 
Applications: Number successful: 1; 
Applications: Percentage successful: 33.3%; 
Dollar Amounts: Applied for: $325,000,000; 
Dollar Amounts: Awarded: $60,000,000; 
Dollar Amounts: Percentage awarded: 18.5%. 

CDE type and size[A]: Other[B]: Second largest, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $100,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Middle, Non-Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $276,980,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Middle, Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $126,600,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Second smallest, Non-Minority; 
Applications: Number: 3; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $180,508,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Second smallest, Minority; 
Applications: Number: 1; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $100,000,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: Other[B]: Smallest, Non-Minority; 
Applications: Number: 9; 
Applications: Number successful: 1; 
Applications: Percentage successful: 11.1%; 
Dollar Amounts: Applied for: $618,248,700; 
Dollar Amounts: Awarded: $50,000,000; 
Dollar Amounts: Percentage awarded: 8.1%. 

CDE type and size[A]: Other[B]: Smallest, Minority; 
Applications: Number: 6; 
Applications: Number successful: 1; 
Applications: Percentage successful: 16.7%; 
Dollar Amounts: Applied for: $650,000,000; 
Dollar Amounts: Awarded: $30,000,000; 
Dollar Amounts: Percentage awarded: 4.6%. 

CDE type and size[A]: Other[B]: total, Non-Minority; 
Applications: Number: 18; 
Applications: Number successful: 2; 
Applications: Percentage successful: 11.1%; 
Dollar Amounts: Applied for: $1,400,736,700; 
Dollar Amounts: Awarded: $110,000,000; 
Dollar Amounts: Percentage awarded: 7.9%. 

CDE type and size[A]: Other[B]: total, Minority; 
Applications: Number: 11; 
Applications: Number successful: 1; 
Applications: Percentage successful: 9.1%; 
Dollar Amounts: Applied for: $976,600,000; 
Dollar Amounts: Awarded: $30,000,000; 
Dollar Amounts: Percentage awarded: 3.1%. 

CDE type and size[A]: All applicants[C]: Largest, Non-Minority; 
Applications: Number: 185; 
Applications: Number successful: 53; 
Applications: Percentage successful: 28.6%; 
Dollar Amounts: Applied for: $24,765,875,000; 
Dollar Amounts: Awarded: $3,862,250,000; 
Dollar Amounts: Percentage awarded: 15.6%. 

CDE type and size[A]: All applicants[C]: Largest, Minority; 
Applications: Number: 2; 
Applications: Number successful: 1; 
Applications: Percentage successful: 50.5%; 
Dollar Amounts: Applied for: $245,000,000; 
Dollar Amounts: Awarded: $100,000,000; 
Dollar Amounts: Percentage awarded: 40.8%. 

CDE type and size[A]: All applicants[C]: Second largest, Non-Minority; 
Applications: Number: 160; 
Applications: Number successful: 47; 
Applications: Percentage successful: 29.4%; 
Dollar Amounts: Applied for: $17,690,475,000; 
Dollar Amounts: Awarded: $3,038,000,000; 
Dollar Amounts: Percentage awarded: 17.2%. 

CDE type and size[A]: All applicants[C]: Second largest, Minority; 
Applications: Number: 27; 
Applications: Number successful: 5; 
Applications: Percentage successful: 18.5%; 
Dollar Amounts: Applied for: $3,095,000,000; 
Dollar Amounts: Awarded: $222,000,000; 
Dollar Amounts: Percentage awarded: 7.2%. 

CDE type and size[A]: All applicants[C]: Middle, Non-Minority; 
Applications: Number: 172; 
Applications: Number successful: 56; 
Applications: Percentage successful: 32.6%; 
Dollar Amounts: Applied for: $16,897,030,000; 
Dollar Amounts: Awarded: $2,974,000,000; 
Dollar Amounts: Percentage awarded: 17.6%. 

CDE type and size[A]: All applicants[C]: Middle, Minority; 
Applications: Number: 15; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $1,260,600,000; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: All applicants[C]: Second smallest, Non-Minority; 
Applications: Number: 173; 
Applications: Number successful: 47; 
Applications: Percentage successful: 27.2%; 
Dollar Amounts: Applied for: $16,857,896,342; 
Dollar Amounts: Awarded: $2,365,000,000; 
Dollar Amounts: Percentage awarded: 14.0%. 

CDE type and size[A]: All applicants[C]: Second smallest, Minority; 
Applications: Number: 14; 
Applications: Number successful: 0; 
Applications: Percentage successful: 0; 
Dollar Amounts: Applied for: $1,149,358,125; 
Dollar Amounts: Awarded: 0; 
Dollar Amounts: Percentage awarded: 0. 

CDE type and size[A]: All applicants[C]: Smallest, Non-Minority; 
Applications: Number: 156; 
Applications: Number successful: 24; 
Applications: Percentage successful: 15.4%; 
Dollar Amounts: Applied for: $13,461,431,060; 
Dollar Amounts: Awarded: $915,750,000; 
Dollar Amounts: Percentage awarded: 6.8%. 

CDE type and size[A]: All applicants[C]: Smallest, Minority; 
Applications: Number: 30; 
Applications: Number successful: 2; 
Applications: Percentage successful: 6.7%; 
Dollar Amounts: Applied for: $2,947,500,000; 
Dollar Amounts: Awarded: $32,000,000; 
Dollar Amounts: Percentage awarded: 1.1%. 

CDE type and size[A]: All applicants[C]: total, Non-Minority; 
Applications: Number: 846; 
Applications: Number successful: 227; 
Applications: Percentage successful: 26.8%; 
Dollar Amounts: Applied for: $89,672,707,402; 
Dollar Amounts: Awarded: $13,155,000,000; 
Dollar Amounts: Percentage awarded: 14.7%. 

CDE type and size[A]: All applicants[C]: total, Minority; 
Applications: Number: 88; 
Applications: Number successful: 8; 
Applications: Percentage successful: 9.1%; 
Dollar Amounts: Applied for: $8,697,458,125; 
Dollar Amounts: Awarded: $354,000,000; 
Dollar Amounts: Percentage awarded: 4.1%. 

[A] CDEs report the asset size for the applicant CDE and the 
controlling entity of the applicant CDE. In cases where a controlling 
entity reported its asset size we used the controlling entity's asset 
size for this table. In cases where no controlling entity was present, 
we used the applicant's reported asset size for this analysis. The 
asset size ranges for each of the five quintiles are as follows: (1) 
largest quintile, $2,182,706,000,000 to $2,378,496,000, (2) second 
largest quintile, $2,378,495,999 to $226,832,000, (3) middle quintile, 
$226,831,999 to $35,779,943, (4) second smallest quintile, $35,779,942 
to $3,740,000, and (5) smallest quintile, $3,739,999 to $0. 

[B] The CDFI Fund collects applicant information for the following 
types of CDEs included in this category: Small Business Investment 
Companies, Specialized Small Business Investment Companies, New Markets 
Venture Capital Companies, credit unions, faith-based organizations, 
and tribal organizations. We included these CDE types in a combined 
"other" category because each category accounts for a less than 1 
percent of the total population of applicants. 

[C] The sum of the individual categories is not equal to the summary 
numbers for the entire applicant pool because the CDE categories are 
not mutually exclusive. For example, in addition to a CDE classifying 
itself as a bank it could also categorize itself as a for-profit 
organization or other applicable categories. 

[End of table] 

[End of section] 

Appendix VII: Comments from the Department of the Treasury: 

Director: 
Department Of The Treasury: 
Community Development Financial Institutions Fund: 
601 Thirteenth Street, NW, Suite 200 South: 
Washington, DC 20205: 

April 23, 2009: 

Mr. Michael Brostek: 
Director, Strategic Issues: 
United States Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Brostek: 

Thank you for providing the Community Development Financial 
Institutions (CDFI) Fund, en office within the U.S. Department of the 
Treasury, with an opportunity to comment on the draft Government 
Accountability Office (GAO) report pertaining to participation by 
minority entities under the New Markets Tax Credit (NMTC) Program. 

As you note in your report, the NMTC application process is extremely 
competitive. Historically, only one out of four applicants has received 
an award, and in any given application round, requests for tax credit 
authority have been between six and nine times greater than what is 
available to award. As a result, in each round, many qualified 
applicants have not received awards, or received awards in amounts much 
smaller than their requests. 

The CDFI Fund agrees with your conclusions that, within this 
competitive environment, minority-owned and minority-controlled 
Community Development Entities (CDEs) have not received awards in 
proportion to their representation in the application pool. The CDFI 
Fund does not believe that this lower success rate is attributable to 
any biases in the application review or selection process, but rather, 
as you point out in your report, is likely due to other factors. Most 
notably: 

1. Relatively few minority CDEs have applied for allocation awards. In 
the past four allocation rounds, only 88 out of 934 applicants, or just 
over 9 percent of the total application pool, were identified as 
minority CDEs. 

2. Minority CDEs tend to be smaller, and smaller CDEs as a class do not 
fare as well. Over 34 percent of minority CDEs fall in the smallest 20 
percent of CDEs by asset size. The smallest 20 percent of CDE 
applicants by asset size have a success rate of 14 percent, which is 
much smaller than the overall success rate of 25 percent. 

3. Minority CDEs do not tend to apply in multiple rounds, which may put 
them at a competitive disadvantage. As noted in the GAO report, 
applying in multiple rounds significantly increases a CDE's likelihood 
of success. The percentage of organizations that receive awards on 
their first try is 10.7 percent, but the percentage jumps up to 29.5 
percent for applicants that have applied at least two times and to 67 
percent for applicants that have applied at least three times. However, 
only 23 percent of the minority CDEs have submitted multiple 
applications compared with 41 percent of the non-minority CDEs. 

Similarly, the CDFI Fund does not believe that the title of the report 
accurately reflects the conclusions that were drawn in your study. Most 
notably, the GAO noted in its study that its analysis does not exclude 
the fact that there may be other factors outside the entity's status as 
a minority CDE which account for the lower probability that it will 
receive an award (page 35 of the draft report). In light of this fact, 
we strongly encourage the GAO to change the title to "New Markets Tax 
Credits - Multiple Factors Contribute To Fewer Awards for Minority 
Entities," or a similar title that more accurately describes the 
findings contained within your evaluation. 

Despite the application challenges faced by minority CDEs, the CDFI 
Fund believes that the NMTC Program is bringing tremendous benefits to 
communities with large minority populations. As noted in your report, a 
2008 study that was jointly sponsored by the CDFI Fund and the federal 
Reserve Board of San Francisco found that, on average, NMTC-eligible 
census tracts have non-white populations 42 percent compared with an 
average of 26 percent in all census tracts; and the census tracts that 
have received NMTC investments have, on average, non-white populations 
of 47 percent. This strongly suggests that NMTC awardees are targeting 
areas with higher minority concentrations when making their 
investments. 

Investments in these communities bring numerous benefits to minority 
residents in the for of jobs, housing, and valuable goods and services. 
In Washington, DC, for example,NMTC investments have financed charter 
schools with student populations that are 100 percent minority; 
minority-owned businesses; a community center in a community where 93 
percent of residents are African-American; and, in that same community, 
a national chain grocery shire that supports over 200 jobs for 
community residents. Many other NMTC-financed projects throughout the 
country have focused exclusively on serving other minority populations, 
including Hispanic populations and Native American populations. It 
would have been beneficial if the scope of the GAO report had also 
included an evaluation of the impact of NMTC investments in communities 
with high minority populations, so that projects like these could have 
been analyzed and included in the final report. 

The CDFI Fund notes, as did the GAO in its report, that neither the 
NMTC authorizing statute, nor any documents regarding the legislative 
history of the program, indicate that a desired program outcome is 
success by minority CDE applicants. Nonetheless, the Fund has been 
actively seeking to promote participation by minority CDEs since the 
program's inception. Most notably, we have conducted multiple outreach 
sessions with the National Banker's Association, a trade association of 
minority-owned financial institutions, and with the Federal Deposit 
Insurance Corporation's Minority Depository Institution Program. These 
efforts have included webinars, workshops, panel presentations, 
conference booths, and key-note speeches at their major conferences. 

The National Bankers Association has praised, in writing, the CDFI 
Fund's outreach efforts to their members. 

More recently, we have developed a relationship with the Department of 
Commerce's Minority Business Development Agency that we hope will also 
lead to additional applications from minority CDLs. We will be 
presenting information about the NMTC Program, and other CDFI Fund 
initiatives, at their National Capital Access Forum in May of 2009. And 
in July of 2009, we will be participating in the FDIC's Interagency 
Minority Depository Institution National Conference. These efforts are 
in addition to the outreach we conduct on a regular basis with other 
Federal agencies, the banking regulatory agencies, trade associations 
and other industry representatives. 

Thank you again for the opportunity to review and comment upon your 
draft report. We appreciate your efforts and the collaborative 
relationship that you fostered during the course of your review. 

Sincerely, 

Signed by: 

Donna Gambrell: 
Director: 

[End of section] 

Appendix VIII: GAO Contact and Staff Acknowledgement: 

GAO Contact: 

Michael Brostek, (202) 512-9110 or BrostekM@gao.gov: 

Staff Acknowledgements: 

In addition to the contact named above, Kevin Daly, Assistant Director; 
LaKeshia Allen; Don Brown; Thomas Gilbert; Cristian Ion; Jean McSween; 
Ed Nannenhorn; and Cheryl Peterson made key contributions to this 
report. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 106-554 (2000). 

[2] CDEs are required to maintain accountability to residents of low- 
income communities by filling at least 20 percent of the organization's 
governing or advisory board positions with low-income community 
residents. 

[3] The original legislation that authorized the program allowed for 
$15 billion in tax credit authority for the NMTC program through 2007. 
However, the Gulf Opportunity Zone Act of 2005, Pub. L. No. 109-135 
(Dec. 21, 2005), authorized an additional $1 billion of NMTC equity for 
qualified areas affected by Hurricane Katrina over a period of 3 years: 
$300 million in 2005, $300 million in 2006, and $400 million in 2007. 
Pub. L. No. 109-432 (Dec. 20, 2006) and Pub. L. No. 110-343 (Oct. 3, 
2008) extended the amount of NMTC authority available by $3.5 billion 
for 2008 and 2009, respectively. The American Recovery and Reinvestment 
Act of 2009, Pub. L. No. 111-5 (Feb. 17, 2009), added an additional $3 
billion of NMTC allocation authority to be split equally between the 
2008 (retroactively) and 2009 allocation rounds. 

[4] A low-income community is defined as a census tract (1) in which 
the poverty rate is at least 20 percent or (2) outside a metropolitan 
area in which the median family income does not exceed 80 percent of 
median statewide family income or within a metropolitan area in which 
the median family income does not exceed 80 percent of the greater 
statewide or metropolitan area median family income. After October 22, 
2004, the Secretary of the Treasury was authorized to issue regulations 
designating targeted populations that may be treated as low-income 
communities and procedures for determining which entities are qualified 
active low-income community businesses with respect to such 
populations. In addition, the definition of a low-income community 
included certain areas not within census tracts, tracts with low 
population, and census tracts with high migration rural counties. 

[5] Community Development Financial Institutions and Specialized Small 
Business Investment Companies automatically qualify as CDEs and only 
need to register as CDEs rather than apply for certification. 

[6] Pub. L. No. 111-5 (Feb. 17, 2009). 

[7] GAO, New Markets Tax Credit Program: Progress Made in 
Implementation, but Further Actions Needed to Monitor Compliance, 
[hyperlink, http://www.gao.gov/products/GAO-04-326] (Washington, D.C.: 
Jan. 30, 2004). 

[8] GAO, Tax Policy: New Markets Tax Credit Appears to Increase 
Investment by Investors in Low-Income Communities, but Opportunities 
Exist to Better Monitor Compliance, [hyperlink, 
http://www.gao.gov/products/GAO-07-296] (Washington, D.C.: Jan. 31, 
2007). 

[9] "Substantially all" means that CDEs must use (within 12 months) at 
least 85 percent of investor proceeds in years 1 through 6 and 75 
percent in year 7 of the investment. CDEs can satisfy this requirement 
by two methods: (1) direct tracing of investments to specific qualified 
low-income community investments or (2) showing that at least 85 
percent of their aggregate gross assets (75 percent in year 7) are 
invested in qualified low-income community investments. 

[10] Beginning in the year in which the investment is made, investors 
are entitled to claim the credit for a 7-year period with 5 percent of 
the investment claimed in each of the first 3 years and 6 percent in 
each of the last 4 years. Investors are allowed to carry the credit 
back 1 year and carry the credits forward for a 20-year period. 

[11] For a more detailed explanation of the NMTC investment process, 
see [hyperlink, http://www.gao.gov/products/GAO-07-296]. 

[12] CDFIs include organizations certified by the CDFI Fund as meeting 
the criteria set forth in section 103 of the Community Development 
Banking and Financial Institutions Act of 1994 (Pub. L. No. 103-325, 
September 1994). Certified CDFIs are eligible to apply for and receive 
federal funds to provide financial and technical assistance to low- 
income communities. 

[13] Other CDE Types include: Small Business Investment Companies, 
Specialized Small Business Investment Companies, New Markets Venture 
Capital Companies, credit unions, faith based organizations, and tribal 
organizations. 

[14] For the purposes of the remainder of this report, we generally 
refer to minority owned or controlled CDEs as "minority CDEs" and non- 
minority owned or controlled CDEs as "non-minority CDEs." 

[15] Lauren Lambie-Hanson, "Addressing the Prevalence of Real Estate 
Investment in the New Markets Tax Credit Program," Federal Reserve Bank 
of San Francisco, Fall 2008. Working Paper 2008-04. 

[16] Analysis of CDE participation in the NMTC program is limited to 
reviewing information about CDEs that applied for NMTC allocations. 
Other investment organizations would potentially be able to obtain 
certified CDE status and apply for NMTC allocations. This could include 
minority-owned banks and other minority organizations with the primary 
mission of serving low-income communities. 

[17] The CDFI Fund requires reviewers to disclose any conflicts of 
interest related to applicants with whom they have or had a 
relationship. 

[18] Applicants that meet or exceed minimum scoring thresholds (48 out 
of 75 aggregate points--each of the 3 reviewers assign a score out of 
25 for each application section--in each of the four application 
sections and an overall aggregate base score of 216 out of 300 points) 
are assigned Final Rank Scores, which determines the order by which the 
CDFI Fund reviews CDEs for awards. This means that CDEs receiving 
average scores of 16 out of 25 or higher in each application section 
and average scores of at least 72 out of 100 points overall advance to 
the second phase of the application process. 

[19] By comparison, non-minority CDEs' scores were more constant from 
2005 through 2008, with 2008 average scores increasing by about 8 
percent over 2005 scores. 

[20] These categories are not mutually exclusive CDE types. For 
example, a for-profit CDE could also be publicly traded and be a bank 
holding company. 

[21] Specifically, we conducted multiple regression analysis, using 
probit probability models, using CDFI Fund application data to 
determine the likelihood that certain CDE characteristics have on the 
probability that a CDE would receive an award. We conducted this 
analysis for all CDE applications from 2005 to 2008. 

[22] U.S. GAO, Minority Banks: Regulators Need to Better Assess 
Effectiveness of Support Efforts. [hyperlink, 
http://www.gao.gov/products/GAO-07-6] (Washington, D.C.: October 2006). 

[23] 67 Fed. Reg. 18618-01. 

[24] Pub. L. No. 101-73 (1989). 

[25] Pub. L. No. 101-73 (1989). 

[26] The test we used was a Hausman test. The results of this test did 
not provide sufficient evidence to conclude that the random effects 
model estimates are biased when tested against the specific alternative 
of a fixed effects model. In such cases, the random effects model is 
judged more appropriate because it produces more precise estimates 
(generally smaller standard errors) than the fixed effects model. We 
also investigated a model that included experience in applying for NMTC 
allocations and do not present the results of this model because of 
significant endogeneity issues. 

[End of section] 

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