I was wondering if it was possible for our bank (we are an ISB) to receive Community Development consideration under either the Loan or Investment/Grant test in the following situation.

We made a loan to certain borrowers -- due to the change in the economy they are now financially in situations where their income is very low to moderate. If we charge off and then forgive their loan (I.E. inform them that we are forgiving the debt and will not be going after them for the remaining amount of the loan) can we include that amount as an investment or loan with the back up being the letter we sent to them, proof of the charge off, and their financial information that proves they are LMI/their business failed etc?

Sorry for all of the questions I appreciate any and all help I receive by reading and posting on this site

Thanks
Stacie