Recently, the CDFI Fund announced the selection of a contractor to administer the New Markets Tax Credit (NMTC) Native Initiative, which is an effort to increase NMTC investments in NMTC Native Areas.
The genesis of this new initiative, in part, stems from the CDFI Fund’s Strategic Plan that calls for creating broad on-ramps for new CDFIs and Community Development Entities (CDEs) to access CDFI Fund programs, including the New Markets Tax Credit Program (NMTC Program). The Strategic Plan also calls for the CDFI Fund to encourage CDEs and CDFIs to grow and expand their reach into communities that are most in need of investment.
The CDFI Fund has recorded NMTC investments totaling over $1.6 billion in Indian Country, including investments in healthcare, education, infrastructure, hospitality, and manufacturing. This new initiative provides an opportunity to ensure we are providing Native CDFIs, Native CDEs, and Tribal entities with targeted training to participate in all aspects of the NMTC Program – be it as an Investor, Leverage Lender, CDE/Allocatee, Secondary CDE (if utilized), Qualified Active Low-Income Community Business, or Low-Income Community Representative. The CDFI Fund also recognizes the importance of non-Native CDEs, CDFIs, and private investors in increasing overall NMTC investments in NMTC Native Areas and we will continue to encourage partnerships between those entities and Native CDEs, Native CDFIs, and Tribal entities.
History Serving Native Communities
Since its creation through the Riegle Community Development and Regulatory Improvement Act (Pub. L. 103-325), which mandated a study on lending and investment practices in Native Communities, the CDFI Fund has built upon and expanded its efforts to increase access to credit, capital, and financial services through its programs to these Native Communities. The Native American Lending Study (2001) led to the formation of the CDFI Fund’s Native Initiatives. The program’s purpose is to generate economic opportunity in Native Communities by supporting the creation and expansion of Native CDFIs through the Native American CDFI Assistance Program (NACA Program). In 2001, there were 12 Native CDFIs; today there are 64. In 2016, the CDFI Fund reaffirmed the needs of and its commitment to Native Communities with the publication of the Access to Capital and Credit in Native Communities report.
Recognizing the difficulty in attracting private investments into low-income communities, in 2000 Congress established the NMTC Program. As of September 30, 2021, over $60.4 billion in Qualified Low-Income Community Investments have been made. To address identified challenges and needs Minority and Native CDEs may have faced in participating in this highly competitive program, in 2015, the CDFI Fund hired a contractor to administer the Minority CDE Training and Technical Assistance Initiative to provide in-depth information on how Minority CDEs can participate in the NMTC Program. In 2018, the CDFI Fund collaborated with the Federal Reserve Bank of Minneapolis’ Center for Indian Country Development in convening a workshop titled “Making the NMTC Program Work in Native Communities."
NMTC Native Initiative
Our recently announced NMTC Native Initiative is the next step in broadening the on-ramp to this critical program and increasing NMTC investment in NMTC Native Areas. The NMTC Native Initiative will include:
Research and Analysis:
Work has already begun on a market research report. The report will include a literature and data search of peer reviewed and/or sponsored research to identify existing research reports and/or data on Tribes that have successfully implemented community economic development strategies that resulted in attracting private sector capital to NMTC Native Areas in the last 20 years. In addition, a summary analysis of NMTC investment data will be completed, which will result in a report that provides a high-level, overall summary of the findings and detailed information on NMTC investment in NMTC Native Areas, identifying attributes of projects or businesses that received NMTC investments.
The research and analysis conducted will also result in the identification of several NMTC investments in NMTC Native Areas that will be used to produce case studies. These case studies, and a resulting report, will highlight the unique opportunities and challenges facing Tribes in attracting NMTC investments in NMTC Native Areas, and best practices for addressing these challenges and maximizing opportunities to achieve local economic and community development objectives.
Technical Assistance Workshops:
The research and analysis will be used to inform the development of the training curriculum and materials needed for technical assistance workshops for Native CDFIs, Native CDEs, and other Tribal entities that focus on investing in NMTC Native Areas. These workshops will provide an overview of the NMTC Program and explain the various ways that Native CDFIs, Native CDEs, and other Tribal entities can participate in an NMTC investment to achieve a Tribe’s community and economic development objectives. Following the technical assistance workshops, participants will have an opportunity to receive individualized training.
This guide will be developed to help Tribal entities that seek to participate in the NMTC Program. Based upon the various roles that participate in the NMTC Program, the guide will cover these roles and the corresponding responsibilities, staffing and financial commitments, and operational capacity, including experience and systems related to underwriting, compliance, asset management, and reporting, as applicable.
In closing, the CDFI Fund remains committed to continuing its efforts to make its programs, particularly the NMTC Program, accessible to Native CDFI, Native CDEs, and Tribal entities, and specifically its efforts to encourage and support the utilization of the New Markets Tax Credit to increase investment in NMTC Native Areas.
 Federal Indian Reservations, Off-Reservation Trust Lands, Hawaiian Home Lands, and Alaska Native Village Statistical Areas are collectively referred to as NMTC Native Areas.
 Includes all NMTC investments made in NMTC Native Areas, Oklahoma Tribal Statistical Areas, State Designated Tribal Statistical Areas, and Tribal Designated Statistical Areas from Fiscal Year 2004 to 2020.
 Includes Native American, Alaska Native, and Native Hawaiian communities.