Community Development Revolving Loan Program for Credit Unions

Published on AidPage by IDILOGIC on Jun 24, 2005

Purpose of this program:

To support low-income credit unions in their efforts to: (1) Stimulate economic development activities which result in increased income, ownership, and employment opportunities for low-income residents; and (2) provide basic financial and related services to residents of their communities.

Possible uses and use restrictions...

In order to meet the objectives of the Community Development Revolving Loan Program for Credit Unions, an applicant low-income credit union approved for participation must provide a variety of financial and related services designed to meet the particular needs of the low-income community served. Federal funds loaned under the Revolving Loan Program may be used for services that include activities aimed towards: (1) Supporting and stimulating economic development and revitalization efforts aimed at benefiting the community it serves. Recipients are encouraged to use funds available through the Revolving Loan Program to serve as a catalyst to attract and stimulate the investment of capital from other private and public sources to promote economic development activities within the community; (2) providing member services such as financial counseling; and (3) increasing the membership and the capitalization base such as: (a) membership drives; (b) campaigns to encourage members to increase their share deposits through systematic savings, utilizing such methods as payroll deductions allotments; and (c) businesses and other organizations serving the community to maintain share deposits or contribute financially in other ways to projects supported by the credit union. Loans up to $300,000, will be made to credit unions. All loans must be repaid to the Community Development Revolving Loan Fund for Credit Unions within the shortest time compatible with sound business practice and with the objectives of the program, but in no case will the term exceed 5 years. Loans made under this program shall bear interest at a rate of not less than 1 or greater than 3 percent per annum. Semi- annual interest and principal payments are required by the Revolving Loan Program.

Who is eligible to apply...

All State and federally chartered credit unions with a low-income designation are eligible. This program is for established, financially sound low-income credit unions that wish to increase member services in their communities. Credit unions in the territories and the possessions are eligible to apply.

Eligible Applicant Categories:
Eligible Functional Categories:

The Community Development Revolving Loan Program for Credit Unions requires low-income credit unions to provide evidence of chartering from the appropriate Regional Office of the National Credit Union Administration or a State credit union regulatory agency. The board of directors will prepare a Community Needs Plan (Plan) and submit it with its loan application. The Plan will contain a list of needed community services that the credit union will provide. The board of directors will provide a status report on the Plan's objectives to the credit union members once a year either at the annual meeting or in a written report sent to all members. The Plan's yearly status report will also be submitted to NCUA annually. This Program is excluded from coverage under OMB Circular No. A-87.

Note:This is a brief description of the credentials or documentation required prior to, or along with, an application for assistance.

About this section:

This section indicates who can apply to the Federal government for assistance and the criteria the potential applicant must satisfy. For example, individuals may be eligible for research grants, and the criteria to be satisfied may be that they have a professional or scientific degree, 3 years of research experience, and be a citizen of the United States. Universities, medical schools, hospitals, or State and local governments may also be eligible. Where State governments are eligible, the type of State agency will be indicated (State welfare agency or State agency on aging) and the criteria that they must satisfy.

Certain federal programs (e.g., the Pell Grant program which provides grants to students) involve intermediate levels of application processing, i.e., applications are transmitted through colleges or universities that are neither the direct applicant nor the ultimate beneficiary. For these programs, the criteria that the intermediaries must satisfy are also indicated, along with intermediaries who are not eligible.

How to apply...

Application Procedure:

Applications for loans competitively awarded in response to a program announcement are to be addressed to: National Credit Union Administration, Community Development Revolving Loan Program for Credit Unions, 1775 Duke Street, Alexandria, VA 22314- 3428. Applicants are urged to inform and to coordinate with State and local governments where such information and coordination is appropriate or necessary for the success of the program. This Program is excluded from coverage under OMB Circular No. A-102.

Note: Each program will indicate whether applications are to be submitted to the Federal headquarters, regional or local office, or to a State or local government office.

Award Procedure:

NCUA will notify applicant credit unions as to whether they have qualified for a loan under the Revolving Loan Program.

Note: Grant payments may be made by a letter of credit, advance by Treasury check, or reimbursement by Treasury check. Awards may be made by the headquarters office directly to the applicant, an agency field office, a regional office, or by an authorized county office. The assistance may pass through the initial applicant for further distribution by intermediate level applicants to groups or individuals in the private sector.

Deadlines and process...


Notices of availability of funds will be published in the Federal Register.

Note: When available, this section indicates the deadlines for applications to the funding agency which will be stated in terms of the date(s) or between what dates the application should be received. When not available, applicants should contact the funding agency for deadline information.

Range of Approval/Disapproval Time

From 30 to 90 days.

Preapplication Coordination

None. This program is excluded from coverage under E.O. 12372.

Note: This section indicates whether any prior coordination or approval is required with governmental or nongovernmental units prior to the submission of a formal application to the federal funding agency.


Any applicant whose qualification is denied may appeal that decision to the NCUA Board.

Note: In some cases, there are no provisions for appeal. Where applicable, this section discusses appeal procedures or allowable rework time for resubmission of applications to be processed by the funding agency. Appeal procedures vary with individual programs and are either listed in this section or applicants are referred to appeal procedures documented in the relevant Code of Federal Regulations (CFR).


Not applicable.

Note: In some instances, renewal procedures may be the same as for the application procedure, e.g., for projects of a non-continuing nature renewals will be treated as new, competing applications; for projects of an ongoing nature, renewals may be given annually.

Who can benefit...

A credit union wishing to participate must serve a field of membership which is comprised primarily of low- income individuals. The credit union's field of membership should correspond geographically to the designated program area described in its application and may include employees who regularly work in the area, businesses located within the area, and the residents of the area. In particular cases, the community served may include a number of contiguous neighborhoods constituting a target area. A target area is defined as that area designated by the Economic Development Administration or another Federal agency or by a State or local government agency for special assistance to low-income residents such as special impact areas or enterprise zones.

About this section:

This section lists the ultimate beneficiaries of a program, the criteria they must satisfy and who specifically is not eligible. The applicant and beneficiary will generally be the same for programs that provide assistance directly from a Federal agency. However, financial assistance that passes through State or local governments will have different applicants and beneficiaries since the assistance is transmitted to private sector beneficiaries who are not obligated to request or apply for the assistance.

What types of assistance...

Direct Loans

Financial assistance provided through the lending of Federal monies for a specific period of time, with a reasonable expectation of repayment. Such loans may or may not require the payment of interest.

How much financial aid...

Range and Average of Financial Assistance

From $25,000 to $300,000.

Note: This section lists the representative range (smallest to largest) of the amount of financial assistance available. These figures are based upon funds awarded in the past fiscal year and the current fiscal year to date. Also indicated is an approximate average amount of awards which were made in the past and current fiscal years.


(Direct Loans) FY 02 $8,981,000; FY 03 est $2,000,000; and FY 04 est $4,000,000.

Note: The dollar amounts listed in this section represent obligations for the past fiscal year (PY), estimates for the current fiscal year (CY), and estimates for the budget fiscal year (BY) as reported by the Federal agencies. Obligations for non-financial assistance programs indicate the administrative expenses involved in the operation of a program.

Account Identification


Note: Note: This 11-digit budget account identification code represents the account which funds a particular program. This code should be consistent with the code given for the program area as specified in Appendix III of the Budget of the United States Government.

Examples of funded projects...

Not applicable.

About this section

This section indicates the different types of projects which have been funded in the past. Only projects funded under Project Grants or Direct Payments for Specified Use should be listed here. The examples give potential applicants an idea of the types of projects that may be accepted for funding. The agency should list at least five examples of the most recently funded projects.

Program accomplishments...

More than $2 million in new loans were made in fiscal year 2002.

Criteria for selecting proposals...

The Community Development Revolving Loan Program will use the following to base its consideration for awards on the following priorities: 1) Urgent Operational Objectives; 2) Short and Mid-Term Objectives and 3) Long Term Development Objectives.

Assistance considerations...

Length and Time Phasing of Assistance

Financial assistance made available in this program will be in the form of a loan which is to be deposited in the credit union as either a non-member deposit or as a note payable and must be repaid to the Revolving Loan Program at a rate of not less than 1 or greater than 3 percent per annum. The term of the loans will not exceed 5 years from the date of award of the loan. Funds will be released directly to the credit union by NCUA, Community Development Revolving Loan Program for Credit Unions.

Formula and Matching Requirements

The Revolving Loan Program has no statutory formula. Loans made available under the program must be matched by the participating credit union. Any loan monies matched by member share deposits will be credited as a two-for-one match. Non- member deposits are a dollar-for-dollar match.

A formula may be based on population, per capita income, and other statistical factors. Applicants are informed whether there are any matching requirements to be met when participating in the cost of a project. In general, the matching share represents that portion of the project costs not borne by the Federal government. Attachment F of OMB Circular No. A-102 (Office of Management and Budget) sets forth the criteria and procedures for the evaluation of matching share requirements which may be cash or in-kind contributions made by State and local governments or other agencies, institutions, private organizations, or individuals to satisfy matching requirements of Federal grants or loans.

Cash contributions represent the grantees' cash outlay, including the outlay of money contributed to the grantee by other public agencies, institutions, private organizations, or individuals. When authorized by Federal regulation, Federal funds received from other grants may be considered as the grantees' cash contribution.

In-kind contributions represent the value of noncash contributions provided by the grantee, other public agencies and institutions, private organizations or individuals. In-kind contributions may consist of charges for real property and equipment, and value of goods and services directly benefiting and specifically identifiable to the grant program. When authorized by Federal legislation, property purchased with Federal funds may be considered as grantees' in-kind contribution.

Maintenance of effort (MOE) is a requirement contained in certain legislation, regulations, or administrative policies stating that a grantee must maintain a specified level of financial effort in a specific area in order to receive Federal grant funds, and that the Federal grant funds may be used only to supplement, not supplant, the level of grantee funds.

Post assistance requirements...


Loan recipients must submit a copy of the Credit Union's Community Needs Plan with their application, annual audit report of the Supervisory Committee, quarterly, semi-annual or other financial, business or program reports as required by NCUA and a final report summarizing the activities and accomplishments of the project in relation to the approved goals and objectives.

Note: This section indicates whether program reports, expenditure reports, cash reports or performance monitoring are required by the Federal funding agency, and specifies at what time intervals (monthly, annually, etc.) this must be accomplished.


The recipient credit union must submit to NCUA annually the Supervisory Committee's audit report and the annual State or Federal examiner's report within 30 days of issuance.

Note: This section discusses audits required by the Federal agency. The procedures and requirements for State and local governments and nonprofit entities are set forth in OMB Circular No. A-133. These requirements pertain to awards made within the respective State's fiscal year - not the Federal fiscal year, as some State and local governments may use the calendar year or other variation of time span designated as the fiscal year period, rather than that commonly known as the Federal fiscal year (from October 1st through September 30th).


Loan recipients are required to keep all financial, business and program reports necessary for program review and audit to ensure that funds have been expended in accordance with the regulations, loan agreement and terms and conditions of the Revolving Loan Program.

Note: This section indicates the record retention requirements and the type of records the Federal agency may require. Not included are the normally imposed requirements of the General Accounting Office. For programs falling under the purview of OMB Circular No. A-102, record retention is set forth in Attachment C. For other programs, record retention is governed by the funding agency's requirements.



Omnibus Budget Reconciliation Act of 1981, as amended, Sections 623, 633, and 681, Public Law 97-35, 95 Stat. 494, 498 and 518, 42 U.S.C. 9812, 9822 and 9910; Public Law 98-63, 97 Stat. 331; Public Laws 99-609, 101-144, and 103-325.

Note: This section lists the legal authority upon which a program is based (acts, amendments to acts, Public Law numbers, titles, sections, Statute Codes, citations to the U.S. Code, Executive Orders, Presidential Reorganization Plans, and Memoranda from an agency head).

Regulations, Guidelines, And Literature

CDRL Program, Federal Register, Volume 52 No. 179, September 16, 1987 (12 CFR 705) and Volume 54 No. 240, December 15, 1989.

Contact information...

Web Sites
Regional Or Local Office

Not applicable.

Note: This section lists the agency contact person, address and telephone number of the Federal Regional or Local Office(s) to be contacted for detailed information regarding a program such as: (1) current availability of funds and the likelihood of receiving assistance within a given period; (2) pre-application and application forms required; (3) whether a pre-application conference is recommended; (4) assistance available in preparation of applications; (5) whether funding decisions are made at the headquarters, regional or local level; (6) application renewal procedures (including continuations and supplementals) or appeal procedures for rejected applications; and (7) recently published program guidelines and material. However, for most federal programs, this section will instruct the reader to consult the so-called Appendix IV of the Catalog due to the large volume of Regional and Local Office Contacts for most agencies. This information is provided in Additional Contact Information (see below).

Headquarters Office

Mr. Anthony LaCreta, Community Development Revolving Loan Program for Credit Unions, National Credit Union Administration, 1775 Duke Street, Alexandria, VA 22314-3428. Telephone: (703) 518-6610.

Note: This section lists names and addresses of the office at the headquarters level with direct operational responsibility for managing a program. A telephone number is provided in cases where a Regional or Local Office is not normally able to answer detailed inquiries concerning a program. Also listed are the name(s) and telephone number(s) of the information contact person(s) who can provide additional program information to applicants.

Additional Contact Information (Appendix IV)

Due to the large volume of regional and local office contacts for most agencies, full contact information is also provided separately here in a PDF format: