---
kind: "section"
citation: "12 U.S.C. § 4706"
title: "12"
title_heading: "Banks and Banking"
number: "4706"
heading: "Selection of institutions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/4706"
units:
  - "Chapter 47 — Community Development Banking"
  - "Subchapter I — Community Development Banking and Financial Institutions"
---

# §4706. Selection of institutions

- (a) **Selection criteria—** Except as provided in [section 4712 of this title](/usc/12/4712.md), the [Fund](/usc/12/4702.md?p=10) shall, in its sole discretion, select [community development financial institution](/usc/12/4702.md?p=5-A) applicants meeting the requirements of [section 4704 of this title](/usc/12/4704.md) for assistance based on—
  - (1) the likelihood of success of the applicant in meeting the goals of its comprehensive strategic plan;
  - (2) the experience and background of the management team;
  - (3) the extent of need for equity investments, loans, and [development services](/usc/12/4702.md?p=9) within the [investment areas](/usc/12/4702.md?p=16) or [targeted populations](/usc/12/4702.md?p=20);
  - (4) the extent of economic distress within the [investment areas](/usc/12/4702.md?p=16) or the extent of need within the [targeted populations](/usc/12/4702.md?p=20), as those factors are measured by objective criteria;
  - (5) the extent to which the applicant will concentrate its activities on serving its [investment areas](/usc/12/4702.md?p=16) or [targeted populations](/usc/12/4702.md?p=20);
  - (6) the amount of firm commitments to meet or exceed the matching requirements and the likely success of the plan for raising the balance of the match;
  - (7) the extent to which the matching [funds](/usc/12/4702.md?p=10) are derived from private sources;
  - (8) the extent to which the proposed activities will expand economic opportunities within the [investment areas](/usc/12/4702.md?p=16) or the [targeted populations](/usc/12/4702.md?p=20);
  - (9) whether the applicant is, or will become, an [insured community development financial institution](/usc/12/4702.md?p=13);
  - (10) the extent of support from the [investment areas](/usc/12/4702.md?p=16) or [targeted populations](/usc/12/4702.md?p=20);
  - (11) the extent to which the applicant is, or will be, community-owned or community-governed;
  - (12) the extent to which the applicant will increase its resources through coordination with other institutions or participation in a secondary market;
  - (13) in the case of an applicant with a prior history of serving [investment areas](/usc/12/4702.md?p=16) or [targeted populations](/usc/12/4702.md?p=20), the extent of success in serving them; and
  - (14) other factors deemed to be appropriate by the [Fund](/usc/12/4702.md?p=10).
- (b) **Geographic diversity—** In selecting applicants for assistance, the [Fund](/usc/12/4702.md?p=10) shall seek to [fund](/usc/12/4702.md?p=10) a geographically diverse group of applicants, which shall include applicants from metropolitan, nonmetropolitan, and rural areas.

## Source credit

(Pub. L. 103–325, title I, § 107, Sept. 23, 1994, 108 Stat. 2172.)