Community Development Revolving Loan Fund Loan Application Guidelines

Important Note

These Guidelines provide clarity on the Community Development Revolving Loan Fund (CDRLF) Loan Program Notice of Funding Opportunity (NOFO).

CDRLF Objective

The CDRLF, managed by NCUA, offers funding for eligible low-income-designated credit unions to provide affordable financial services to their members and to stimulate economic activities in their communities. 
The CDRLF Loan Program makes loans to eligible credit unions on an ongoing basis, offering two types of loans: 

• Low-Interest Loans
• Emergency Loans

Low-Interest Loans

Applicants may choose from the eligible activities listed in the CDRLF Loan Program NOFO:

• Development of new products or services for members, including new or expanded share draft or credit card programs
• Partnershirams, including, but not limited to, microbusiness loans, payday loan alternatives, education loans, and real estate loans
• Acquisition, expansion, or improvement of office space or equipment, including branch facilities, ATMs, and electronic banking facilities
• Operational programs

Emergency Loans

The Emergency Loan covers unexpected costs incurred due to unforeseen events. NCUA will provide guidance on eligible expenses through press releases and announcements on NCUA’s loan website. Credit unions must explain how the event affects member service. 

Loans made for emergencies cannot be a regular source of funding for any credit union.

Emergency Loans may differ from Low-Interest Loans in minimum or maximum loan amounts, maturity terms, and interest rates.

General Eligibility and Administrative Requirements

NCUA will only consider applications that meet the criteria listed in the Eligibility section of the CDRLF Loan Program NOFO. Note the following specific requirements:

• Applicants must have a low-income designation, an active SAM registration, and a unique Entity Identification Number before registering in NCUA’s Grants Management System to submit an application. The system will not recognize credit unions that do not have an active SAM.gov registration.
• Credit unions with questions about the low-income designation may contact NCUA’s Office of Credit Union Resources and Expansion at DCAMAIL@ncua.gov.

CDRLF Loan Terms

Loans will not be awarded for less than $50,000 or more than $500,000.

Loans must be repaid at the interest rate published on NCUA’s website in the CDRLF Interest Rate Policy in effect at the time of the application’s submission.

Full loan principal repayment is due upon maturity. Loans of up to $150,000 will mature after a 3-year term. Loans greater than $150,000 will mature after 5 years. Loans cannot be extended, renewed, or refinanced by NCUA. Credit unions may request a shorter loan term; however, no loan term shall exceed 5 years.

Required Application Information

Applicants must provide the following information in the awards management system:

• Loan Type: Select “Low-Interest Loan” or “Emergency Loan.” This field defaults to “Low-Interest Loan.”
• Project Title: Provide a title for the proposed project (limit of 100 characters).
• Request Amount: State the amount your credit union is requesting. Round to the nearest hundred dollars.
• Proposed Use of CDRLF Loan: Select the credit union’s proposed use of the CDRLF loan. Select as many proposed uses as applies to your project. If your proposed use is not listed, select “other” and enter the proposed use of funds.
• Overall Project Plan: Explain the project the credit union intends to complete as follows:
  • Describe the needs of the credit union and/or the underserved population. The narrative must demonstrate that the proposed project will address needs of the credit union and/or its members. Identify current challenges faced by the credit union and its members.
  • Explain your project’s implementation plan and how it meets the identified needs. This narrative should also describe any potential risks associated with your project and how your credit union plans to mitigate the risks. Outline how the credit union will manage the loan, including the semi-annual interest payments and principal repayment at the end of the term.
  • Clearly state the expected outcome(s) and impact. The metrics (described below) must align with project goals and identified needs in the application.
• Impact Metrics: Choose at least two metrics from the list to assess project impact. For each metric, enter the target level or goal anticipated by the end of the project. See the Impact Measurement section below for additional information.
• Project Budget: Specify the planned loan funds usage in a line-item budget that aligns with the requested project. See the CDRLF Loan Project Budget Example below.
• Additional Project Information (Optional): Include relevant details that would help NCUA understand the proposed project, such as financial projections or vendor quotes. Do not include an additional narrative.
• Certifications: Applicants must certify all terms and conditions required by the federal government to confirm compliance with all applicable federal laws, executive orders, regulations, and policies governing and applicable to the CDRLF program.
  Note that NCUA may request additional information and materials.

Impact Measurement

Applicants must select two of the following performance metrics: 

• Asset Growth ($): The increase in the credit union’s assets because of the project.
• Loan Growth (%): An increase in the credit union’s loan portfolio due to the project.
• Members Served: The number of members served by a product or service because of the project.
• Membership Growth: The increase in total membership resulting from the project.
• Custom Metric: If the listed metrics do not apply to the project, propose a quantitative metric, such as employees trained or the completion of a cybersecurity audit.

CDRLF Loan Project Budget Example

Applicants must submit a project budget showing how the credit union will use the loan funds. The line-item budget must list each project activity and clearly describe how the funds will be utilized. Please see the illustrative budget below, with an explanation of each section.

• Project Activity: Select the project activity from the available drop-down options.
• Budget Narrative: Briefly justify each cost, explaining its relevance to project goals and confirming all expenses are reasonable.
• Total Estimated Project Costs: Include all estimated project costs, even those exceeding the award amount or funded by other sources.
• Portion Covered by CDRLF Loan: Specify the amount covered by the CDRLF loan. This cannot exceed the total estimated project cost.

NCUA uses the Project Budget when determining the final award amount. Unallowable expenses are excluded from the award total. NCUA has the right to reject an application with significant ineligible activities.

General Expense Guidelines

Credit unions are responsible for any project costs incurred if their loan application is denied.

• All expenses must directly relate to the approved loan project.
• If a credit union is unsure about the eligible expenses associated with the project, contact NCUA at CUREAPPS@ncua.gov before incurring expenses.
• The credit union must prove successful project completion with invoices, certifications, or other documentation.
• Applicants should perform a due diligence review before entering any arrangement with a third party. NCUA’s Letter to Credit Unions 01-CU-20, Due Diligence Over Third Party Service Providers, provides guidance to credit unions. Third-party vendor agreements must include the services or products provided and the associated costs.
• Invoices from outside parties must be billed to and paid by the credit union.

Expenses Not Allowed

CDRFL loan funds cannot be used to finance expenses that cause conflicts of interest, such as:

• Compensation to employees or board members from consultants, partners, or vendors
• Contracts, agreements, or internships for credit union staff or board members or their relatives

The following operational costs are also not permitted:

• Indirect costs
• Loan loss reserves
• Custodial services
• Alcohol
• Matching Funds, such as the matching portion of an Individual Development Account program
• Monthly and annual maintenance costs for technical support
• Insurance costs
• Promotional items, such as gifts, giveaways, souvenirs, and gift cards
• NCUA or other government agency employee expenses and projects/contracts based on covered relationships with NCUA employee(s)

Application Review Process

NCUA will review applications as described in the following steps, and usually within 180 calendar days. Applicants may contact NCUA to discuss the status of their application. 

Step 1: Program Eligibility

NCUA checks whether applicants are low-income-designated and have an active SAM registration and a unique entity identifier (UEI) to meet the General Eligibility and Administrative Requirements. Applicants that do not meet the eligibility requirements will not proceed to Step 2.

Step 2: Compatibility and Feasibility Review

NCUA will review the application to confirm the project aligns with CDRLF goals, such as supporting eligible credit unions in offering affordable financial services to their members, and to stimulate economic activity in their communities.

Project Objective Review

NCUA reviews applications based on how well they address:

• Alignment with CDRLF loan objectives
• The needs of the credit union and the underserved members who will benefit from the project
• A clear implementation plan for selected activities
• Identification of risks associated with the project and mitigation strategies 
• Accounting for the loan funds and repayment plans
• Impact metrics that can clearly measure project success

Budget Review

NCUA evaluates the project budget to ensure that proposed funds support the project activities. Applicants must clearly outline necessary, allowable, fair, and reasonable expenses as defined by the expense guidelines and 2 CFR 200 Subpart E Cost principles.

Compliance Review

NCUA will consider the applicant’s past participation in the CDRLF grant and loan program. If an applicant has had an award terminated in the past, the application may be rejected. Open CDRLF loan awards with principal balances may affect the final loan amount.

Step 3: Financial Viability Review

To ensure the safety, soundness, and sustainability of the CDRLF loan portfolio, NCUA will consider the Qualifying Credit Union’s long-term financial health. NCUA may consider information provided by NCUA examiners or State Supervisory Authorities (SSA), if applicable.

Tier Classification

Applicants will be assigned to risk tiers based on their Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to Market Risk (CAMELS) rating, feedback from the Regional Offices or SSA, and other relevant data. Every tiered credit union, regardless of CAMELS rating, will be considered for funding. The tier classification determines both the maximum loan award amount and whether securitization might be required for the loan, depending on the credit union’s financial health and the level of risk posed to the CDRLF loan fund. 

Tier A

Tier A credit unions are those with a Composite Rating of 1 or 2, no component ratings of 3, 4, or 5, and no concerns by the Regional Office or SSA. Tier A applicants may qualify for a loan up to $500,000 and can hold up to $500,000 in CDRLF loan principal at any one time.

Tier B

Tier B credit unions are those with a Composite Rating of 1, 2, or 3, no component ratings of 4 or 5, and no concerns by the Regional Office or SSA. Tier B applicants may qualify for a loan up to $250,000 and can hold up to $250,000 in CDRLF loan principal at any one time.

Tier C

Newly chartered and non-federally insured credit unions may not have received an examination from NCUA or SSA. Such credit unions are considered Tier C. Tier C applicants require a review of the credit union’s most recent audited financial statements and, for new charters, financial projections to demonstrate their ability to manage the requested CDRLF loan¹. Tier C applicants may receive a loan up to $150,000 and can hold up to $250,000 in CDRLF loan principal at any one time.

Tier D

Tier D credit unions are those with any component ratings of 4 or 5, or those that have any concerns by the Regional Office or SSA. Tier D applicants may qualify for a loan up to $150,000 and can hold up to $150,000 in CDRLF loan principal at any one time.

Loan Amount Determination

CURE will determine the final award amount based on:

• The tier classification described above 
• Allowable costs presented in the budget

Step 4: Final Decision

NCUA will notify the applicant by email of the decision to approve or deny the application.

Successful applicants will receive a tentative approval notification that includes an overview of the instructions for accepting the loan award. More information can be found in CDRLF Loan Post-Award Guidelines.

Applicants that are denied may request a meeting with NCUA to discuss the reasons.

Contact Information

If you need to contact NCUA regarding the CDRLF program, send your request by email to CUREAPPS@ncua.gov. Please allow up to 72 hours for a response.