NEXT Opportunity Award
The NEXT Opportunity Award is a pool of of $8.25 million, which includes $7.5 million in low-cost, long-term debt and $750,000 in unrestricted grant funding. Up to four CDFIs per year that present compelling strategies for expanding coverage may win a NEXT Opportunity Award. In 2014, applicants must be CDFIs that have innovative strategies to expand housing opportunities, such as preventing foreclosure, improving energy efficiency, providing affordable mortgages in a scalable way, expanding small multi-family projects, preserving at-risk affordable housing, combining housing with health, transit, special needs, and/or other supportive services, or addressing another critical issue in the housing finance market today.
Prospective applicants should demonstrate high capacity, strong financial performance, and a high level of readiness to implement their plan. The applicant’s expansion strategy should be on track to implement within six months of receiving an award.
Applicants must have at least $5 million in assets and can apply for award amounts up to 10% of their total assets.
Congratulations 2014 NEXT Opportunity Awardees:
- Florida Community Loan Fund won $4 million for its plan to expand the Florida Preservation Fund, its successful, affordable, multi-family rental housing preservation program which focuses on hard-to-serve 5-50 unit properties across Florida.
- New Jersey Community Capital won $2.25 million for its strategy to expand ReStart, a groundbreaking program to bulk-purchase pools of underwater mortgage notes to prevent foreclosures and stabilize distressed communities in New Jersey and other states across the U.S.
- Rural Community Assistance Corporation won $2 million for its plan to expand its Development Solutions initiative, which will build capacity of local developers and fill a critical gap for development of affordable multi-family housing in underserved rural and Native communities in 13 Western states.
See the impact past Awardees have made in the communities they serve by watching their videos.
Applications Open: January 28
Information Calls for Applicants: February 12, 1:00 PM EDT
Applications Close: March 13, 5:00 PM EDT
Evaluation Period: March-June
Selection Committee Meeting with Finalists: July 17
Awardees Notified: TBA
Wells Fargo NEXT Awards Celebration: October 15, 2014 at OFN's Annual Conference in Denver, CO
Applicants for the NEXT Opportunity Award must meet certain eligibility requirements. Below is a summary.
- CDFIs do not need to be a Member of OFN to apply for the NEXT Awards.
- CDFIs cannot apply for both the NEXT Seed Capital Award and the NEXT Opportunity Award in the same year as they require different stages of development for an applicant’s expansion strategy.
- The CDFIs that won a large NEXT Award in 2007–2011 or a NEXT Opportunity Award may not apply for the Wells Fargo NEXT Awards in 2012–2016.
- CDFIs that are awarded the NEXT Seed Capital Award in one year may apply in future years for the NEXT Opportunity Award.
2014 Eligibility Requirements
1. Charitable Purpose
Applicant is a US tax-exempt organization with a current 501(c)(3) determination letter from the Internal Revenue Service. An organization without this tax status may be eligible if it is a U.S. Treasury CDFI Fund certified CDFI. Native CDFIs that are CDFI Fund certified must not be tribally controlled.
2. Community Development Mission & Impact
Applicant has a primary mission of community development and strives to have a positive impact on low-income, low-wealth, and other disadvantaged people and communities.
3. Finance-based Strategy
Applicant is a private non-governmental financial intermediary that uses financing as an integral part of its community development strategy.
4. Three Years of Financing Experience to Achieve a Community Development Mission
5. Audited Financial Statements for 3 Years
If the applicant is a credit union, the credit union can submit both a 5300 report and a Supervisory Committee Audit to substitute for an audited financial statement.
6. Discipline and Performance
Applicant is currently in compliance with all financial covenants, reporting requirements, and performance obligations stipulated by public, private, and philanthropic providers of capital and grant support.
7. Current Plan
Applicant is operating under a business plan or strategic plan that was written or updated within the last five years.
8. Total Assets More Than $5 Million
9. OFN’s Goals
Applicant affirms Opportunity Finance Network’s goal to ensure that low-income, low-wealth and other disadvantaged people and communities have access to affordable, responsible financial products and services.
2014 Selection Criteria
Successful candidates will be CDFIs with a history of significant accomplishments that present the most compelling applications explaining their plans to expand their coverage through innovative housing finance strategies. Applicants must demonstrate a high degree of readiness to successfully accept and use a flexible grant and debt award from the NEXT Awards.
Eligible applicants will be evaluated according to the six criteria below.
1. Rationale for Expansion
A clear description and analysis of the unmet market need that applicant plans to address with an innovative housing finance strategy, including why current sources of capital are not providing the unmet market need.
2. Coverage Strategy
A compelling strategy to expand housing finance opportunities. The expansion strategy must have financing as a primary component, and must be in process or ready to implement or expand within a six month timeframe of receiving an award.
3. Use of Funds
A compelling use of funds that demonstrates how the applicant will use the NEXT Opportunity Award to advance the applicant’s coverage strategy in ways that otherwise would not be possible. Applicants must specify award amount requested.
A credible and compelling analysis of projected impact from applicant’s coverage strategy over a 3 year time horizon, as well as a solid track record of tracking impact over the applicant’s history.
5. Readiness and Viability
A strong management team, partnerships, and other resources in place or planned, to execute applicant’s coverage strategy. A pipeline of potential projects or plan for marketing applicant’s housing finance strategy. A strong grasp of internal and external challenges and how this strategy will impact financial management and risk of the organization.
6. Financial Strength and Performance
Strong financial performance and risk management, and a sound business model that positions the organization for sustained growth, innovation, and success.
The Selection Committees include senior executives from Wells Fargo, the MacArthur Foundation, and The Kresge Foundation, as well as highly regarded CDFI leaders and experts in banking, philanthropy, economics, and advocacy. This distinguished and diverse group of experts brings a wide range of expertise and perspectives to the process of selecting the Wells Fargo NEXT Award recipients. Specifically, they will assess the qualifications and merits of the applicants relative to the selection criteria, conduct in-person interviews with finalists, and select the award recipients.
2014 NEXT Opportunity Award Committee
CEO & President
Boston Community Venture Fund, Aura Mortgage Advisors and NSP
Associate Director, Program Related Investments
Deputy Director, Social Investment Practice
The Kresge Foundation
Program and Portfolio Officer
Mission Driven Investments
W.K. Kellogg Foundation
Executive Vice President and Group Head
Corinne Florek, OP
Executive Director and Chief Executive Officer
Pennsylvania Housing Finance
President & CEO
Lincoln Institute of Land Policy
President & CEO
Opportunity Finance Network
Director, Program Related Investments
Senior Vice President
Senior Vice President
Sarah Rosen Wartell
Adjunct Lecturer in Public Policy
Director, Initiative for Responsible Investment
Hauser Center for Nonprofit Organizations
Can I apply for a NEXT Opportunity and NEXT Seed Capital Award?
CDFIs cannot apply for both the NEXT Seed Capital Award and the NEXT Opportunity Award in the same year as they require different stages of development for an applicant’s expansion strategy.
I know that an organization is not eligible to apply for both the NEXT Opportunity and NEXT Seed Capital awards. Can two affiliated but legally separate organizations apply? Both are CDFIs—a community development credit union and 501(c)(3) nonprofit.
Two affiliated organizations that are separate legal entities can apply for the NEXT Opportunity Award and the NEXT Seed Capital Award as long as each is a 501(c)(3) and/or CDFI Fund Certified.
Does my organization have to be a 501(c)(3) to apply?
An organization must be tax-exempt under Section 501(c)(3) of the Internal Revenue Service code or certified by the CDFI Fund to be eligible to apply for a Wells Fargo NEXT Award.
My CDFI won a million dollar NEXT Award. Are we eligible to apply for the NEXT Opportunity Award?
The CDFIs that won $5.5 or $2.75 million dollar NEXT Awards in 2007–2011 may not apply for the NEXT Awards in 2012–2016. CDFIs that won $25,000 NEXT Awards are eligible to apply.
Can CDFIs submit a co-application with another CDFI?
CDFIs cannot submit a co-application. One CDFI must apply and if applying for the NEXT Opportunity Award must have assets greater than $5 million. However, a CDFI can mention in its proposal how it plans to partner with another CDFI in its CDFI coverage strategy.
If an organization doesn’t have audited financials, can it still apply for the NEXT Awards?
For the NEXT Opportunity Award, three years of audits are required. If the applicant is a credit union, the credit union can submit both a 5300 report and a Supervisory Committee Audit to substitute for an audited financial statement
If my organization receives an award, will I be notified before the OFN Conference?
Yes, Awardees for the NEXT Opportunity Award and the Award for the NEXT Seed Capital Award will be notified before the OFN conference.
Is a tribal entity eligible for a Wells Fargo NEXT Award? My organization is an LLC organized under the Tribe.
A Native CDFI is eligible to apply if it is a separate organization from the Tribe and the Tribe does not have any form of control over the CDFI. The Native CDFI must satisfy all other Eligibility Requirements.
Does my organization have to be CARS™-rated to be eligible to apply?
Applicants do not have to be CARS™-rated to apply.
We anticipate that we will be out of compliance with one of our quarterly financial covenants with one institutional investor for the period ending 3/31/12. We intend to ask for a waiver in writing from the institutional investor for the covenant non-compliance. If we get a written waiver, will we be eligible to apply for the NEXT Award?
If you have received a written waiver from your investor, you are in compliance and are eligible to apply for the NEXT Award. Please forward the written waiver to firstname.lastname@example.org.
My organization is in the process of being CARS-rated for the first time. Do I need to provide all of the documents as part of my application?
A CDFIs final CARS report must be available by the application deadline or you must provide all of the requested documents as part of your application.
Is there a specific time period within which the debt portion of the award must be drawn down; and does it need to be drawn down in full, or can it be drawn down incrementally over a period of time?
The grant and loan portion of the award are closed and disbursed at the same time. The awards are closed and disbursed within three months of receiving the commitment.