For over 25 years, CEI has been committed to its community development mission, "to help create economically and environmentally healthy communities in which all people, especially those with low incomes, can reach their full potential."

CEI brings a mission-oriented perspective to underwriting NMTC transactions. An evaluation of a project's likelihood of financial success is only one element that we consider. CEI approaches each holistically using a "triple bottom-line" approach, also known as "3E" underwriting.

The 3Es include an evaluation of a project's Economic viability, it's positive community social Equity, and its integration with sustainable Environmental principles. We are practical in applying this mission underwriting perspective; not every project is expected to meet all of the criteria. Some projects and deals are compelling enough in just one or two of these areas. We do think there is great value, however, in taking a wider view of what constitutes a "sound" investment and a "good" deal.

A first good indication of whether a project or business has a compelling NMTC mission orientation is to ask whether the project or business under consideration would be viable and would most likely succeed if it did not have the benefits of the NMTCs? We might also ask whether a project's positive social and environmental impacts are significantly enhanced by the addition of the NMTCs?

If there is a reasonable fit within the spirit of the CDFI Fund's mission, we may explore some of the following questions under each of our mission-oriented underwriting "3Es":

Economics:

This is the traditional financial and business underwriting of a project that helps us evaluate risks versus rewards and its ability to meet all of its financial obligations and economic goals, including a reasonable exit-strategy at the end of the seven-year NMTC investment horizon.

• Does the proposed transaction make financial sense?
• Will it sustain itself financially, cover its anticipated expenses and debt service and, if relevant, turn a profit?
• Is the business plan reasonably sound in its assumptions and projections?
• Do the principals have the experience and knowledge to undertake and succeed with such a project?
• Are working partners and affiliates aligned with the project's financial and operational plan?
• Is the external market environment favorable to a project's products or services and is market timing in synch with the project coming on line?

Equity:

"Equity" in this instance refers to a project's impact on helping a community access a more equitable share of needed resources and services. CEI evaluates the relative needs of low-income, rural and underserved communities and a project's positive impacts within those communities. Whenever possible, we specifically quantify the enhancements provided to targeted populations by identifying direct and indirect related employment opportunities and services provided to individuals, households, or groups.

• How does this project enhance a community or targeted population?
• Does it create or sustain jobs in an economically challenged area?
• What is the likelihood that a project will actually help raise an area's overall income levels, educational opportunities, and employment rates in a timely manner?
• Will it help people find new employment opportunities through job and skills training?
• Does the project help sustain a traditional, but particularly challenged industry, such as fishing, farming, forestry, or paper production?
• Does it bring new opportunities to traditionally underserved populations, such as native people and tribal communities or emotionally and physically challenged people?
• Does it create greater access to much needed community services, such as healthcare, child or elder daycare, or, in some instances, needed expanded options and access to retail goods and groceries?

Environmental:

These are the particular features of a project or business that align it with sustainable environmental practices. We often look at the emergence of industry best-practices and certifications as guides.

• Does the project have environmental features that enhance or promote conservation and sustainable use of natural resources? For instance, does the project make use of sustainable forestry practices in timberlands management and harvesting, perhaps by adhering to certifiable Forest Stewardship Council standards? Does the project include the creation of conservation easements over undeveloped areas? Is the project promoting the sustainable use of marine environments and ecosystems?
• Does the project integrate "green" features that make use of energy-efficient technologies, recycled materials, natural lighting, indigenous landscaping, water-use conservation planning, and water runoff mitigation strategies? Is a project working towards achieving U.S. Green Building Council's LEEDS (Leadership in Energy and Environmental Design Standards) certification rating?
• Does the project promote greater public access to natural resources by creating new opportunities for environmentally compatible outdoor activity, such as education, recreation, sports, or eco-tourism?