Methodology

This page documents the scoring framework used by NMTC Application Builder and its relationship to the CDFI Fund's published evaluation criteria. It is intended for practitioners who need to understand how scores are computed, what limitations apply, and what this tool is and is not.

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Source documents

This tool's scoring framework is derived from the following primary sources:

Document	Notes
CY 2024-2025 NMTC Allocation Application Review Process	Primary source for scored sections, sub-criteria, gating thresholds
CY 2024-2025 NMTC Allocation Application (NOAA)	Application structure and narrative requirements
CY 2024-2025 NMTC Application FAQ	Clarifications on scoring intent and eligibility criteria
CDFI Fund NMTC Award Announcements, CY2020–CY2024	Historical award statistics used in the benchmarks module

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What this tool IS

A self-assessment tool for CDEs to evaluate how well their pipeline and organizational positioning align with the CDFI Fund's published CY 2024-2025 evaluation criteria. It translates the published scoring framework into quantitative scores so CDEs can identify gaps before submission.

What this tool IS NOT

• Not a win probability calculator. The CDFI Fund does not publish scores or application data for non-winning applicants. A true probability of selection cannot be computed from available data.
• Not a substitute for Phase 2 narrative review. Phase 2 evaluates Management Capacity and Capitalization Strategy through qualitative reviewer judgment. This tool does not model those criteria.
• Not authoritative. The CDFI Fund's actual scoring rubric is proprietary. This tool's sub-score weights are best-effort interpretations of the published guidance; the CDFI Fund does not publish exact point values for individual sub-criteria.

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Scoring framework

The CDFI Fund evaluates applications on two scored sections plus optional Priority Points.

Section 1 — Business Strategy (50 base points)

Evaluates the CDE's ability to deploy capital effectively and credibly.

Sub-criterion	Max points	Key threshold
Product Flexibility	10	50%+ of the portfolio priced below market OR 5+ indicia — this tool's own test, see below
Pipeline Credibility	15	Identified, sized, and timed projects with LOIs
Track Record Strength	15	5-year direct financing record; bonus for own capital at risk
Track Record Alignment	10	70%+ pipeline supported by similar prior activity; 90%+ prior-allocation deployment — the second is this tool's own, see below
Section total	50	—

Disclosure: Within Business Strategy, sub-point allocations (Product Flexibility 10 pts, Pipeline Credibility 15 pts, etc.) are this tool's interpretation of the Review Process document. The CDFI Fund does not publish exact point weights for each sub-criterion.

Product Flexibility does not measure the CDFI Fund's Question 15 test

Question 15 (CY 2024-2025 NMTC Allocation Application, pp. 20-21) is a single-select ladder — "Choose one of the following options. Check only one." — in which the Applicant commits that 100% of its QLICIs will be provided as equity; equity-equivalent financing; debt at least 50% below market; or debt satisfying at least 5 indicia of flexible or non-traditional rates and terms. Lower rungs commit to 33%/4 indicia, 25%/3, or 15%/2, and score lower. Every rung describes a property of each individual QLICI.

This tool computes neither figure. Its sub-score divides a QEI-weighted share of the portfolio priced below market by the Fund's per-loan rate-discount depth, and takes the better of that and an application-level indicia count — so the Fund's "or" sits inside a single loan while this tool's sits across the whole book. Those are different quantities, and a portfolio share over a discount depth is not a ratio of anything.

No number in this row answers Question 15, and it must not be read as a near-miss against it. The CDE has to answer Question 15 from its own loan terms. (Removing the below-market limb from the scoring arithmetic is deferred to a later release, behind a written methodology, because it moves scored figures.)

The 90% on Track Record Alignment is this tool's, not the Fund's

The 70% is Fund-stated and correct — Review Process p.7 Part II.A.4: "At least 70% of the Applicant's proposed NMTC investments were supported by a track record of similar business types and activity types." The Fund's own 90%, in that same paragraph, is a different measure: "its most recent 5-year direct financing track record was 90% or more of its projected NMTC deployment in Exhibit A" — a track-record-to-projection ratio.

Deployment of a prior allocation is a separate Phase 2 compliance matter (Review Process p.4) and carries no published percentage. The phrase "deployment rate" appears nowhere in the Allocation Application (142 pp.), the Review Process (7 pp.) or the CY 2024-2025 NOAA (10 pp.). The 90% this tool scores against is its own.

Section 2 — Community Outcomes (50 base points)

Evaluates the depth of community impact and accountability.

Sub-criterion	Max points	Key threshold
Higher Distress Targeting	15	85%+ of QEI in severely distressed areas — a proxy for a Question 25(a) commitment measured on QLICI dollars, see the basis note below
Deep Distress Commitment	10	20%+ of QEI in CDFI Fund-designated Deep Distress areas — a proxy for the top rung of Question 25(b)(i)'s ladder, see the basis note below
Special Targeting	5	QEI in U.S. Territories, High Migration Rural Counties, NMTC Native Areas, or Persistent Poverty Counties — this tool's own criterion, not the Fund's, see below
Community Outcomes Quality	10	Quantified outcomes (jobs, units, sq ft) with third-party methodology
Community Accountability	10	LIC representation on board; community engagement track record
Section total	50	—

BASIS NOTE — the Fund's two distress commitments are measured on QLICIs, this tool's sub-scores are measured on QEI. Question 25 of the CY 2024-2025 NMTC Allocation Application (printed pp. 38-41) sets both, and both are denominated in QLICIs "in terms of aggregate dollar amounts", tested for each QLICI.

Question 25(a) asks for at least 85% of QLICIs in areas characterized by at least one of items 1-5 — Severe Distress; NMTC Native Areas; U.S. Island Areas; Non-Metropolitan Counties; Targeted Populations — or by at least two of items 6-12: 25% poverty / 70% median family income / 1.25× unemployment; Brownfield Sites; ARC and/or DRA Areas; Colonias Areas; Federal Medically Underserved Areas; FEMA Disaster Areas; Low-Income and Low-Access to Supermarkets. "Multiple indicia of distress" — the phrase the Review Process summarises items 6-12 with — is that two-of-seven test, per QLICI.

Question 25(b)(i) is not a 20% bar. It is a selectable commitment level — 0 / 5 / 10 / 15 / 20 — and selecting 20 opens a field for any figure from 20% to 100%. It covers four area types: Deep Distress, NMTC Native Areas, High Migration Rural Counties, U.S. Island Areas. A CDE that can honestly commit 10% selects 10 and has failed nothing. The Application adds that "A QLICI that meets this commitment will also automatically meet the commitment made in Question 25(a)."

Every distress share this package computes is a share of QEI (intelligence/distress_analysis.py); qlici_amount is read only to print it in Appendix A and to check that it does not exceed its project's QEI, and feeds no percentage, no score and no bar. The two sub-scores above are therefore QEI-based proxies, not computations of the Fund's commitments, and no figure this tool renders answers either one. This package carries a per-project field for five of the fourteen distinct area types Question 25 lists — a tool-verified distress level covering Severe and Deep Distress, and CDE-declared, tool-unverified flags for NMTC Native Areas, High Migration Rural Counties and U.S. territory. It carries nothing for Non-Metropolitan Counties, nothing for Targeted Populations, and nothing for any of items 6-12; it computes no multi-indicia measure at all. Holding those fields is not a partial answer to Question 25: the commitment is a share of QLICI dollars, this package weights nothing by QLICI dollars, and a flag that enters no denominator contributes nothing to a share.

Corrected in 1.3.0 (S1). Through 1.2.2 this note was written against the CY 2024-2025 NMTC Program Review Process — a seven-page summary of how the Fund scores an application. Both sentences it quoted are real and both were quoted correctly, and the summary still omitted the ladder and three of Question 25(b)'s four area types. The rendered document therefore told a CDE to compute one Deep Distress share and compare it to 20%, which is a pass/fail threshold that does not exist, and to leave Native Area, High Migration Rural and Island Area QLICIs out of a numerator they belong in. Both errors push the CDE to understate itself to a federal agency. The rule this leaves behind: a summary document is a safe source for how the Fund scores and an unsafe source for what the Applicant is asked to commit to, because the thing the Applicant fills in is the Application.

Computing the QLICI-denominated shares — swapping the denominator from qei_request to qlici_amount on any scored share — remains deferred behind a written, hostile-audited methodology, because it moves every Community Outcomes sub-score. See CHANGELOG.md.

Special Targeting is this tool's own criterion — the CDFI Fund publishes no such criterion

The CY 2024-2025 NOAA (89 FR 92283, 21 Nov 2024), section V.B(b), sets out the complete set of additional points under IRC §45D(f)(2): "the CDFI Fund will ascribe additional points to entities that meet one or both of the statutory priorities" — a track record of serving Disadvantaged Businesses or Communities (up to five points) and Investments in Unrelated Entities (five points) — "Thus, Applicants that meet the requirements of both priority categories can receive up to a total of ten additional points." Two statutory priorities, ten points, and this tool already scores both separately under Priority Points below. There is no third.

The phrases "Special Targeting" and "bonus points" appear in none of the three primary documents: the CY 2024-2025 Allocation Application (142 pp.), the Review Process (7 pp.) and the NOAA (10 pp.). The four categories are real NMTC concepts, but the Application uses them to define a Disadvantaged Business (p.132: a Disadvantaged Business is one located in "a Persistent Poverty County; a NMTC Native Area; or a U.S. Island Area"). They are inputs to the DBC statutory priority, not a scored criterion of their own.

This row should be read as a house prompt to consider those areas, not as a bar the CDFI Fund will measure. (Earlier releases cited "Section II.C.1" for this claim — a real section, Targeting Areas of Higher Distress, which does not contain it. Removing the sub-score from the scoring arithmetic is deferred to a later release, because it moves scored figures.)

Priority Points (10 bonus points)

Bonus points that increase an application's ranking within the Highly Qualified pool.

Criterion	Max points	Key threshold
DBC Track Record	5	5+ years AND 70%+ of direct financing volume to Disadvantaged Businesses/Communities
Unrelated Entities Commitment	5	90%+ of QEIs to entities unrelated to the CDE — this tool's threshold; the Fund's test is Yes/No, see below

The 90% is this tool's scoring threshold — the Fund's test is not a percentage

Question 23 of the CY 2024-2025 Allocation Application (p.34) is a dropdown: "Does the Applicant intend to use substantially all of the proceeds of its QEIs to make QLICIs in one or more businesses in which persons Unrelated to the Applicant hold the majority equity interest? ☐ Yes ☐ No", and sub-section E states "An Applicant that answers 'Yes' to Question 23 will be awarded five additional points." It is a Yes/No intent commitment, binding in the Allocation Agreement — the Review Process (p.7 Part II.B.2) describes the same commitment and likewise publishes no percentage.

So this tool grades a continuous share against a binary question, which is a category error before it is a wrong number — and that is why the row is labelled a house threshold rather than re-based to a better one.

It has deliberately not been re-based to 85%. Treas. Reg. §1.45D-1(c)(5)(i) does define "substantially all" as "at least 85 percent", but it defines it for the deployment test — QEI cash into QLICIs, at §1.45D-1(c)(1)(ii) — which is a different requirement. Substituting 85% here would swap one unstated number for another while strengthening the appearance of a citation.

The denominator is correct and unchanged. "Proceeds of its QEIs" is what Question 23, the Review Process and the NOAA all say.

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Gating thresholds — Highly Qualified pool

The CDFI Fund uses a two-stage gating process to form the "Highly Qualified" pool that advances to Phase 2 review. It publishes one gate, shown in the first two rows. The third row is this tool's own and is marked as such:

Tier	Aggregate Base Score	Section Minimums	Whose threshold
Not Qualified	< 85	Either section < 40	CDFI Fund
Highly Qualified	85–94	Both sections ≥ 40	CDFI Fund
Top Tier	95–100	Both sections ≥ 45	This tool

Applications that fail either section minimum (< 40 in Business Strategy or Community Outcomes) do not advance to Phase 2, regardless of aggregate score.

"Top Tier" is not a CDFI Fund tier

The Review Process (p.3, Step 2) publishes the Highly Qualified gate verbatim — "(i) an aggregate score of at least 40 out of a possible total of 50 points in each of the two scored Application sections; and (ii) an aggregate base score (excluding priority points) of at least 85 points" — and nothing above it. The phrase "Top Tier" returns zero hits across the Allocation Application (142 pp.), the Review Process (7 pp.) and the CY 2024-2025 NOAA (10 pp.); the NOAA's only tier concept is the "highly qualified pool". The 95/45 cut points behind the label are an unsourced house heuristic.

Note also that the Review Process's single "95%" — "Applicants purchasing loans from other CDEs committed to require the selling CDE to re-invest at least 95% of these proceeds as QLICIs" (p.6) — is a reinvestment share on purchased loans, not a score. It is a different kind of quantity and does not support the 95 above.

Award expectation by tier: - Not Qualified: Will not advance to Phase 2. No award expected. - Highly Qualified: Phase 2 reviewed. Award depends on Phase 2 outcome and ranking within the pool. - Top Tier: Well clear of the published gate. This tool does not predict an award, and no award expectation attaches to a tier the CDFI Fund does not publish. Above the gate, the Review Process states that highly qualified Applicants are ranked "inclusive of half of the priority points" and forwarded to an Allocation Recommendation Panel — neither of which this tool models.

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Phase 2 considerations (not scored by this tool)

Phase 2 evaluates qualitative factors that cannot be quantified from pipeline data alone. These are reported as informational flags in the phase2_flags field of WinProbabilityScore.

Factor	Notes
Management Capacity	Organizational capacity to deploy capital; staffing and systems
Capitalization Strategy	QEI-raising track record; investor relationships; capitalization feasibility
Non-Metro commitment	The CDE's own declared Question 22(c) figure, passed through from cde_attributes["non_metro_commitment_pct"] — not computed. None if the CDE declared nothing. See the note below
Fee/compensation structure	Favorable fee structures to QALICBs viewed positively
Prior reporting compliance	Late or inaccurate prior-round reports may result in point deductions

Note on the non-metro basis. ESTABLISHED — it is measured on QLICIs, and Question 22 asks for a COMMITMENT rather than a measurement.

phase2_flags["non_metro_commitment_pct"] is the CDE's own declaration, read from cde_attributes (CDEProfile.extra, the non_metro_commitment_pct key of the profile YAML). It is None when the CDE declared nothing. Nothing computes it.

The pipeline's measured share is reported separately and under its own name: phase2_flags["non_metro_pipeline_qei_pct"], from geographic_diversity["non_metro_pct"] — a share of QEI, determined per project from the OMB Non-Metropolitan County designation nmtc-mapper returns for the geocoded tract (PipelineProject.is_non_metro). Its undetermined companion is non_metro_undetermined_qei_pct.

Question 22 of the CY 2024-2025 Allocation Application asks, at printed p. 32:

(c) What is the minimum percentage of QLICIs that the Applicant is willing to commit to deploy in Non-Metropolitan Counties? ______%

(d) What is the maximum percentage of QLICIs that the Applicant is willing to commit to deploy in Non-Metropolitan Counties? ______%

Both are blank Numerical - Percentage fields, and the figures entered "shall become a condition of its Allocation Agreement with the CDFI Fund". The CDFI Fund goal is that "20% of all QLICIs made by Allocatees under this Round are invested in Non-Metropolitan Counties", and the formula reduction falls on Allocatees "that have not committed to investing a minimum of 20% of their QLICIs in Non-Metropolitan Counties"; the 50% Rural CDE figure is a commitment "in response to Question 22(c)" — also QLICIs. The CY 2024-2025 NOAA states it the same way: "invest at least 20 percent of their QLICIs (as measured by dollar amount)".

So four things are true at once:

1. The Fund's figures are denominated in QLICI dollars; this tool's share is denominated in QEI.
2. Question 22(c)/(d) is a forward commitment the Applicant types into a blank field, not a measurement of the pipeline it holds today — the same shape as Question 25(a)/(b).
3. The 20% is a program-level goal across all Allocatees and a bar on what an Allocatee committed to. Question 22 states no minimum an individual Applicant must clear.
4. Question 22 is explicitly not scored in Phase I.

Where the Application does want the pipeline, it asks for transactions rather than a percentage: Question 22(f) instructs the Applicant to "indicate the number and dollar amount of transactions that have already been identified in Non-Metropolitan Counties, for which underwriting is completed or underway", referencing Table A5. That is what metro_status_qei carries — dollars and counts for all three buckets. Note that this tool does not yet supply Table A5 row (d), "Located in a Non-Metropolitan County?", which the Fund requires; is_non_metro is the field that makes supplying it possible.

Corrected in 1.3.0 (Review Process sweep). This paragraph read "has not been checked against the Application's own question text" — accurate when 1.2.1 wrote it, and stale since 1.2.2 round 2, which established the QLICI basis from the NOAA and recorded it in nmtcapp/data/benchmark_thresholds.py while leaving the "not checked" sentence live here and on the Streamlit About page. A could-not-establish that has since been established is a claim like any other, and this one survived a round that fixed the constant it describes.

Corrected again in 1.4.0, twice.

The letters were wrong here. This page cited the minimum as 22(b) and the maximum as 22(c). In the Application's own question table (printed p. 32), 22(b) is a count of years (0-6) and the two percentages are 22(c) and 22(d). The error was inherited from the instrument: the NOTE block on printed p. 31 says the range runs "at or above the minimum indicated in Question 22(b), but not more than the maximum percentage indicated in Question 22(c)", which contradicts the table it introduces — and contradicts its own next paragraph, which puts the Rural CDE 50% commitment at 22(c). The question table governs: it is the field list the Applicant fills in.

And the basis sentence described a defect that has been fixed. The twelve-state list at geographic_analysis.py:16 is deleted. The classification is now a per-project OMB county designation, and a project whose designation could not be determined is reported in a third bucket rather than counted metropolitan.

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Sub-score formulas (Business Strategy)

Product Flexibility (0–10 pts)

score_below_mkt   = min(10, products_below_market_pct / 0.50 × 10)
score_indicia     = min(10, products_flexible_indicia_count / 5 × 10)
score             = max(score_below_mkt, score_indicia)

Full credit on this tool's sub-score if either: ≥ 50% of products are offered below market rate, OR ≥ 5 indicia of flexible product terms are documented. Both cut points are this tool's own, and neither is the CDFI Fund's Question 15 test — see Product Flexibility does not measure the CDFI Fund's Question 15 test, above.

Note the first line's arithmetic: products_below_market_pct is a QEI-weighted share of the portfolio, while the Fund's 50% is the depth of the rate discount on an individual loan. Dividing one by the other produces a number with no dimensional meaning. It is retained here only because removing it moves scored figures; that removal is a later release, behind a written methodology.

Pipeline Credibility (0–15 pts)

Piecewise based on pipeline_pct_identified:
  ≥ 100%:  15 pts
  ≥  80%:  9 + (pct − 0.60) / 0.40 × 6
  ≥  60%:  6 + (pct − 0.40) / 0.20 × 3
  <  60%:  pct / 0.60 × 6

Adjusted for eligibility: penalty if eligibility_pct < 95%

Track Record Strength (0–15 pts)

award_pts    = min(9, prior_award_count × 3)
year_pts     = min(3, years_in_operation / 5 × 3)
capital_bonus = 3 if has_own_capital_at_risk else 0
score         = min(15, award_pts + year_pts + capital_bonus)

Track Record Alignment (0–10 pts)

align_score  = min(5, track_record_pipeline_alignment_pct / 0.70 × 5)
deploy_score = min(5, track_record_deployment_pct / 0.90 × 5)
score        = align_score + deploy_score

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Sub-score formulas (Community Outcomes)

Higher Distress Targeting (0–15 pts)

score = min(15, pct_deep_or_severe / 0.85 × 15)

At 85%+ of QEI in severely distressed tracts (deep distress included): full 15 pts, proportional credit below. The 0.85 is Question 25(a)'s commitment level used as this tool's scale factor; the Fund measures it on QLICIs in aggregate dollar amounts, over a one-of-items-1-5 or two-of-items-6-12 test applied per QLICI, none of which this package computes. See the basis note above.

Deep Distress Commitment (0–10 pts)

score = min(10, pct_deep / 0.20 × 10)

At 20%+ of QEI in CDFI Fund Deep Distress tracts: full 10 pts, proportional credit below. Uses pct_deep from distress analysis and has no fallback — the "50% of pct_deep_or_severe" substitute this file used to document was removed in 1.2.1 (deep distress is a strict subset of severe distress in no fixed proportion, so no such split exists to compute); an absent pct_deep now scores zero. The 0.20 is the top rung of Question 25(b)(i)'s selectable ladder (0 / 5 / 10 / 15 / 20) used as this tool's scale factor — not a bar the CDE either clears or misses — and the Fund measures it on QLICIs in aggregate dollar amounts, over four area types of which this package computes one. Scoring a CDE that honestly commits 10% at half credit is this tool's judgement, not the Fund's. See the basis note above.

Special Targeting (0–5 pts)

partial = Σ min(1.25, category_pct / 0.10 × 1.25)  for each of 4 categories
score   = min(5, partial)

Categories: U.S. Territories, High Migration Rural Counties, NMTC Native Areas, Persistent Poverty Counties (each contributes up to 1.25 pts; 10%+ in a category = 1.25 pts).

Community Outcomes Quality (0–10 pts)

Condition	Score
Third-party validated outcomes	9
Quantified but self-reported	6
Not quantified	2

Community Accountability (0–10 pts)

board_pts        = min(8, lic_board_representation_pct / 0.33 × 8)
engagement_bonus = 2 if has_community_engagement_track_record else 0
score            = min(10, board_pts + engagement_bonus)

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Priority Points formulas

DBC Track Record (0–5 pts)

year_score = min(2.5, dbc_focus_years / 5 × 2.5)
vol_score  = min(2.5, dbc_dollar_volume_pct / 0.70 × 2.5)
score      = year_score + vol_score

Unrelated Entities (0–5 pts)

score = min(5, unrelated_entities_pct / 0.90 × 5)

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Readiness score vs. alignment score

This tool computes two separate scores:

Readiness Score (ReadinessScore) — internal application quality: - Is the pipeline NMTC-eligible? - Does the pipeline meet minimum distress thresholds? - Are all required fields populated with valid values? - Do internal numbers satisfy program rules (QEI ≤ project cost, etc.)?

Alignment Score (WinProbabilityScore) — external competitive position: - Business Strategy: product terms, pipeline quality, track record - Community Outcomes: distress targeting, community impact, accountability - Priority Points: DBC focus, unrelated entities

An application can have a high readiness score but a low alignment score (eligible pipeline, but low distress concentration).

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What is not modeled

1. Phase 2 qualitative review. Management Capacity and Capitalization Strategy are evaluated by CDFI Fund staff through narrative review. This tool reports these as Phase 2 flags, not scores.
2. Past reporting compliance deductions. Late or inaccurate prior-round reporting can result in score deductions. This tool assumes clean compliance history; it is flagged in phase2_flags.prior_reporting_compliance_risk.
3. Subjective reviewer judgment. Phase 1 reviewers exercise judgment on the quality of narrative explanations. Narrative quality, internal consistency, and clarity cannot be quantified from pipeline data alone.
4. Anomalous score resolution. When two reviewers disagree by more than a threshold, a third reviewer resolves the discrepancy. This process is not modeled.
5. Non-winner data. The CDFI Fund does not publish application-level data for non-winning applicants. Historical benchmarks in HistoricalBenchmarks are derived from winner-level data only.

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Historical program statistics

Stat	CY 2024-2025 (estimated)
Total applicants	216
Total QEI requested	$19.2B
Total authority available	$10.0B
Rural CDE award share (historical)	~16.9%

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Acknowledgments

Scoring methodology developed by reference to:

• CDFI Fund. CY 2024-2025 NMTC Allocation Application Review Process. U.S. Department of the Treasury.
• CDFI Fund. New Markets Tax Credit Program: Notice of Allocation Availability (NOAA), CY 2024-2025. U.S. Department of the Treasury.
• CDFI Fund. NMTC Program Award Book, various years (CY2020–CY2024). U.S. Department of the Treasury.
• CDFI Fund. Community Development Financial Institutions Fund Annual Report, FY2020–FY2024. U.S. Department of the Treasury.