A Commercial Lending Advance under the Community Investment Advance (CIA) program provides a member a lower-cost, long term advance for loans that promote qualifying economic development projects.
Economic development projects include commercial, industrial, manufacturing, social service and public facilities projects and activities, and public and private infrastructure projects such as roads, utilities and sewers. Please contact the Community Investment Department at 800-544-3452, ext. 2400 for assistance.
- Promotes community economic development
- Supports farms and small businesses
- Helps businesses retain and create jobs in the community
- Reduces interest rate risk of long term advances
- Fixed rate advances from one year to 30 years
- Priced below corresponding regular advance rates
- Minimum borrowing amount $25,000
What loans may qualify?
Eligible projects include commercial, mixed-use and agricultural loans or investment in municipal bonds from targeted areas, or serving small business and loans to businesses.
Eligible loans would include:
- Commercial, mixed-use and agricultural loans originated by the member,
- Purchase of a participation interest in a qualifying loan,
- Purchase of municipal bonds for public facilities and infrastructure projects.
Loans may be new originations or refinance of existing loans.
Loans must be for a business or public purpose and may include loans to acquire or expand a business, real estate loans for purchase, construction or renovations, equipment and vehicle loans, livestock loans and loans for working capital and inventory.
Loans must have been originated and funded within the three months prior to the date of the CIA, or a member may take an advance on loans to be originated and funded within the 12 months after date of the advance. The latter is useful to accommodate new construction projects, loans or lines of credit for working capital. Only the funded amount of a loan is eligible for CIA.
The two most common qualifiers used by members are target income area, used for loans in rural areas and for municipal bonds, and small business qualifier, used for commercial loans in urban areas.
Target areas include:
- Target income area
- 115% Area Median Income in rural areas
- 100% Area Median Income in urban areas
- Native American area
- Federal Empowerment Zone
- Federal Champion Community
- Federal Enterprise Community
- Military base closing area
- Brownfield tax credit area
- Community adjustment and investment (CAIP) area
- Federally Declared Disaster Area
To determine if a project is in a target income area, the Bank uses the geocoding/mapping system provided by the Federal Financial Institutions Examination Council (FFIEC). Contact the Bank for instruction on how to use this tool to qualify your loans.
Small Business Qualification
A loan to a small business or farm will qualify. The business or farm must meet the size standard of a small business established in the United States Small Business Administration, which is based on the gross revenue of the business or farm, or the number of persons it employs. Use the size standards table on the SBA website to qualify a loan.
What information is required?
At the time of the advance, or at the end of 12 months as applicable, the member must provide the Bank information to qualify loans for the advance. Information collected to qualify a Commercial Lending Advance includes:
- Borrower name
- Project location
- Loan closed date
- Loan amount (funded amount)
- For loans qualified by wages, the number of jobs created or retained
- For small business loans, business NAICS number, and member certification of gross revenue or number of employees
- For qualified by lending area, target area census tract and tract median family income
How is a request for funds made?
A member must submit a Commercial Lending Advance Request for Funds form to the Community Investment Department with each advance request. The form must be complete and information certified by a staff person of the member authorized to request advances. Provide at least 24 hours for the processing of a request.
Important: The standard requirements of FHLB Des Moines credit and collateral policies apply. Please note that the loans identified to obtain the advance are not collateral for the advance. Collateral has been pledged separately and the advance will offset that collateral. In addition, an approved Request for Funds does not provide a rate-lock or reservation of an advance rate. Rates are determined at the time of the advance.