I am a CRA rookie. Our bank plans to lend the money to the CDFI. I have questions about CDFI. Hope I can get feedback from here. (I tried to research prior threads but can’t find any)
Thank you thank you very much in advance!!!!

This CDFI provides a fixed rate mortgage in low-moderate-income neighborhoods. We plan on financing notes located in our assessment areas.
1. If we lend them $3 million. What kind of CRA credits we can get?
2. What kind of document I need to put in the file in order to show examiners
3. How much due diligence we need to do before we lend them money. (from compliance standpoint)

If I am understanding correctly, your loan will fund this CDFI's mortgage loans to borrowers in LMI tracts.

As far as the kind of CRA credits you will get, there are no hard and fast rules that will tell you if you make X number of loans for X dollars, you will get X amount of CRA credit. Examiners look at several different factors to determine if your level of lending is adequate. You will want to have a good understanding of what your assessment area "looks" like (demographic info, including what census tracts are included in your AA, and also how your peers and other lenders are lending in these areas). You will also want to have an understanding of the needs in that community. The greater the need for LMI housing in these areas, the more weight you will receive for the CRA "credit" given in the exam.

For affordable housing loans, I always include a copy of the loan presentation, which should include a description of the project, as well as the number of LMI units involved. You will also want to provide census tract information. I always geocode the address on FFIEC's geocoder and print the map and census information for my file. Depending on the type of loan you're doing, your documentation will look different. For example, if you're making a loan that will qualify under the Revitalize/Stabilize definition, you would want to explain how this loan will impact the census tract (or surrounding tracts) where it is located. Again, I would include a description of the project and a map from the geocoder.

We do similar loans for a CDFI in our assessment area. We just document the mission of the CDFI and the use of funds and we have always received full credit as affordable housing loans under the community development test.

Wellscr, Thank you very much for helpful feedback!

Thanks much, TMatt87! That's very useful!