As reported in Variety, the film (as yet untitled) is being funded by Letterman's production company, Worldwide Pants. The candidates, all 18 except for one 20-year-old, are running for city council or mayor in their various communities; SlashFilm has more details on who they are and where they live, if you're curious.
Despite Letterman's involvement, the film is not expected to be a comedy, nor is it meant to mock the subjects. On the contrary, Letterman said in a statement that he admires them: "When I was their age I was still delivering papers on a paper route, and I wasn't even very good at that."
The film has some serious liberal street cred. It's being directed by Michael Moore's former assistant Jason Pollock and produced by Lawrence Bender, who also produced An Inconvenient Truth (and, somewhat less relevantly, most of Quentin Tarantino's films).
Worldwide Pants was initially set up specifically for Letterman's talk show back in the NBC days. Since then, always acting under Letterman's direction, it has produced TV shows such as "Ed," "Everybody Loves Raymond," and "The Bonnie Hunt Show." The company has only made one theatrical feature so far, the cult hit Strangers with Candy, in 2005.