§4569 Capital Magnet Fund

Summary

Create a Capital Magnet Fund in the U.S. Treasury inside the Community Development Financial Institutions Fund. Money put into the fund comes from transfers under section 4567 and any other law that sends money to it. The Treasury uses the fund to run competitive grants that attract private money to build, preserve, rehab, or buy affordable housing for extremely low-, very low-, and low-income families. Grants can also support economic development and community service sites (like day care, job centers, and health clinics) when they work with housing to help revive low-income or underserved rural areas. Money from the fund is treated as federal financial assistance under civil rights laws. Eligible grantees are Treasury-certified community development financial institutions or nonprofits mainly focused on affordable housing. Grants can pay for things like loan loss reserves, revolving loan funds, affordable housing funds, funds for community facilities, and risk-sharing loans. The Treasury will run a competitive application process and require project descriptions, other funding sources, and a timetable. No single grantee and its affiliates can get more than 15% of total grant funds in any year. The Treasury will try to fund projects across different regions, including metro and rural areas, using objective distress criteria (poverty, unemployment, blight, targeting low-income families, or other criteria). Each grant should be expected to result in projects costing at least 10 times the grant amount. Grant money must be committed within 2 years or it will be recaptured and reallocated. The Treasury will ban certain uses of funds, including political activity, advocacy, lobbying, counseling, travel, and tax-prep advice, and grantees may not pay people to lobby state or local officials about contracts. Grantees must track funds, keep records, report, and submit audits and financial reviews (at least annually, with an independent CPA review). If a grantee fails to follow the rules, the Treasury can cut funds, require repayment, limit eligible activities, or end funding. The Treasury must report publicly to Congress and issue rules covering audits, fair urban/suburban/rural distribution, and selection priorities like ability to attract investments, housing need, and readiness to use funds promptly. The Federal Housing Finance Agency may not count CMF grant dollars themselves toward enterprise housing goals or duty-to-serve credit; mortgage purchases for CMF-funded housing count only if those purchases are paid for with money other than the grants.