7th Round of New Markets Tax Credit Competition Kicks Off; Credits Available for $3.5 Billion in Investments to Help Low-Income Communities

January 16, 2009

Washington, DC - The U.S. Department of the Treasury announced today the opening of the seventh round of competition for tax credits on $3.5 billion of equity investments under the New Markets Tax Credit (NMTC) Program.

"The New Markets Tax Credit Program is a vital tool for stimulating private sector investments in low-income communities, and making a real difference in the lives of the people living in these communities," said CDFI Fund Director Gambrell. "The $3.5 billion of tax credit authority available in the fiscal year 2009 round is critically important to finance businesses and real estate developments, helping to stimulate economic growth and employment opportunities."

To date, the organizations awarded tax credits have raised $12.6 billion in equity investments. In fact, awardees have raised over $1 billion of equity in the past six months alone, demonstrating that the NMTC Program has been a critical tool for economic development during a period of tightened credit markets.

Through 2007, allocatees reported deploying a total of $9 billion in qualified loans and investments in low-income communities across the nation. These loans and investments have:

• Financed close to 2,000 businesses and real estate developments in low-income communities, including small businesses, manufacturing facilities, charter schools and health care centers;
• Developed or rehabilitated over 68 million square feet of commercial real estate;
• Created 210,000 full-time construction jobs; and
• Created or maintained 45,000 full-time jobs at businesses operating in low-income communities.

This year's NMTC allocation round will include an emphasis on placing investments in underserved rural communities. The allocation application deadline is April 8, 2009.

To Learn More

Guidance and application materials on the seventh round of the NMTC Program are available on the New Markets Tax Credit Program webpage of the CDFI Fund’s website at www.cdfifund.gov.

Those interested in learning more about the FY 2009 funding round of the NMTC Program can also view a webcast by visiting: www.cdfifund.gov/how_to_apply/

Background on NMTC Program

The NMTC Program, established by Congress in December of 2000, permits individual and corporate taxpayers to receive a credit against federal income taxes for making qualified equity investments in investment vehicles known as Community Development Entities (CDEs). The credit provided to the investor totals 39 percent of the cost of the equity investment and is claimed over a seven-year period. Substantially all of the taxpayer's investment must in turn be used by the CDE to make qualified investments in low-income communities. Successful applicants are selected only after a competitive application and rigorous review process that is administered by Treasury's Community Development Financial Institutions (CDFI) Fund.

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