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ACE: Frequently Asked Questions
Who may borrow ACE funds?
Only members of the Bank may borrow ACE funds.
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What kind of ACE financing is available?
The types of credit available under ACE include fixed and adjustable rate loans, called "advances," and standby letters of credit.
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How may ACE funds be used?
ACE funds must be used for economic development projects that either:
- Result in the creation or retention of jobs (other than construction jobs) for low- and moderate-income people and communities
- Provide services or other benefits to low- and moderate-income people and communities
Projects may include:
- Commercial, industrial, and manufacturing activities, including small business and micro-enterprise lending
- Social service and other community or public facility projects
- Public or private infrastructure projects, such as roads, utilities and sewers
ACE may be used in:
- Originating loans
- Purchasing a participation interest, or providing financing to participate, in an economic development loan consortium or other financial intermediary
- Making loans to entities that, in turn, make loans for economic development projects
- Supporting a secondary market for ACE-eligible loans
- Purchasing New Markets tax credits
ACE may be used for prospective financing or for eligible financing originated up to 3 months before the ACE commitment date.
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Are there any other qualification requirements?
Yes. To qualify for ACE funds, the above eligible uses must serve targeted beneficiaries. ACE allows these criteria to be met in one of several ways. A project needs to meet only one of the criteria listed below to fulfill this requirement.
Targeted Activity:
- The project qualifies as a small business as defined by the federal Small Business Administration (SBA).
Targeted Areas:
The project/activity is located in one or more of the following targeted areas as designated by the U.S. Department of Housing and Urban Development (HUD):
- Urban Empowerment Zone
- Urban Enterprise Community
As designated by the U.S. Department of Agriculture (USDA):
- Rural Empowerment Zone
- Rural Enterprise Community
- Rural Champion Community
- An "Indian area," as defined by the Native American Housing Assistance and Self Determination Act (NAHASDA)
- A property that is eligible for a federal Brownfield Tax Credit
- An area affected by a military base closing in a community in the vicinity of the installation, as defined by the Department of Defense
- A community affected by the North American Free Trade Agreement (NAFTA) as designated by the Community Adjustment and Investment Act
- A federally declared disaster area or an area eligible for federal economic development assistance
- A state-declared disaster area or an area eligible for state economic development assistance (approved by the Federal Housing Finance Agency)
- A rural neighborhood or community with average median incomes at or below 115% of the area median income (AMI)
- An urban neighborhood or community with average median incomes at or below 100% of the AMI
Targeted Income Levels for Individual Beneficiaries:
- In rural areas, at least 51% of the jobs created or retained by the project/activity (excluding construction jobs) have annual salaries that pay up to 115% of the AMI.
- In rural areas, at least 51% of the families who benefit from the project/activity have incomes up to 115% of the AMI.
- In urban areas, at least 51% of the jobs created or retained by the project/activity (excluding construction jobs) have annual salaries that pay up to 100% of the AMI.
- In urban areas, at least 51% of the families who benefit from the project/activity have incomes up to 100% of the AMI.
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How can a project developer access ACE funds?
ACE funds may be available to a project developer through one of the Bank's members. The developer may present its project to a Bank member to determine if the member is interested in financing the project.
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How long does it take to receive ACE funding?
Once the ACE application is complete, the length of time required to fund an ACE advance depends on several variables, including the complexity of the advance. However, same-day funding is sometimes available.
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What documentation is required for ACE?
To request ACE credit, the member must complete the Application for Advances for Community Enterprise (ACE)/Community Investment Program (CIP) Credit or the Advances for Community Enterprise (ACE) Application for SBA Lenders. Within 12 months of the ACE funding or, if the advance has a term of less than one year, prior to the maturity date of the ACE advance, the member must demonstrate its ACE-eligible lending activity in the full amount of the ACE credit by providing the Bank with a certification that:
The funds were used to benefit targeted beneficiaries (defined by a targeted area, a targeted activity, or targeted income levels for individual beneficiaries in rural and urban areas) and the use of the funds is consistent with the ACE Application, the criteria for eligible projects and activities, and the other terms and conditions of the program. The certification must include a description of how the ACE advance (or letter of credit) meets the requirements, and, as appropriate, a statistical summary, list, or other documentation showing the number and salaries of jobs created or retained. Qualifying loans were originated no earlier than 3 months before the date of the ACE funding and no later than 12 months following the ACE funding date or, if the advance has a term of less than one year, prior to the advance maturity date. If the eligible project was financed up to 3 months prior to the submission of the ACE application, the certifications and accompanying documentation may be submitted with the application. If the eligible project is receiving funds from another targeted federal economic development program with the same or more restrictive eligibility targets, certification that the project is in compliance with those requirements is sufficient.
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