The U.S. Department of the Treasury's Community Development Financial Institutions Fund (CDFI Fund) today released a Summary Report and data collected on all New Markets Tax Credit (NMTC) investments across the nation through fiscal year (FY) 2020. The CDFI Fund requires all Community Development Entities (CDEs) that have been awarded NMTC allocations to submit an annual report detailing how they invested Qualified Equity Investment (QEI) proceeds in low-income communities. These reports must be submitted to the CDFI Fund by the CDEs, along with their audited financial statements, within six months after the end of their fiscal year.
A few key highlights from the Summary Report are:
- Based on program activities reported through FY 2020, $59.2 billion in NMTC investments were directed through both Real Estate, Non-Real Estate QALICBs and investments made through other CDEs.
- Based on program activities reported through FY 2020, Allocatees disbursed a total of $59.2 billion in QEI proceeds to 7,138 QALICBs.
- Through the FY 2020 reporting period, NMTC financing has been used to construct or rehabilitate over 270 million square feet of commercial real estate.
- In FY 2020, NMTC financing helped to create or rehabilitate over 13.8 million square feet of commercial real estate.
- To date, over $24 billion in investments were made in community facility projects.
- In FY 2020, over 60% of QLICIs, which totaled more than $2.2 billion, were investments in projects with a community facility component.
- Through the FY 2020 reporting period, approximately 11,000 units of housing that have been created are reported as affordable housing.
- To date, NMTC investments have led to the reported creation or retention of over 600,000 construction jobs and over 300,000 permanent jobs in businesses financed.
Further, the Summary Report documents the extent to which: (1) CDEs go beyond the minimum statutory distress requirements of the NMTC Program by committing to serve areas of higher distress, rural areas or targeted populations (slides 11-14); (2) CDEs leverage the NMTC to offer financing with flexible or non-traditional rates and terms (slides 15-17); and (3) CDEs commit to innovative uses of NMTC financing (slides 18-22).
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About the NMTC Program
The NMTC Program enables economically distressed communities to leverage private investment capital by providing investors with a federal tax credit. All NMTC investments must meet statutory qualifications for their investors to be able to claim the tax credit. The vast majority of NMTC investments are made within statutorily defined "Low-Income Communities." Low-Income Communities are census tracts with a poverty rate of 20% or greater, or a median family income at or below 80% of the applicable area median family income. In addition to investments located in Low-Income Communities, investments can qualify for NMTCs under other statutory provisions designed to target certain areas or populations, including provisions for Rural Counties, and Low-Income Targeted Populations.
Through the first 17 application rounds of the NMTC Program, the CDFI Fund has made 1,354 awards, allocating a total of $66 billion in tax credit authority to CDEs through a competitive application process. This $66 billion includes $3 billion in Recovery Act allocations and $1 billion of special allocation authority to be used for the recovery and redevelopment of the Gulf Opportunity Zone.
To learn more about the NMTC Program, visit the NMTC Program webpage on the CDFI Fund's website at www.cdfifund.gov/nmtc.
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