On September 1, 2021, the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund announced $5 billion in New Markets Tax Credits (NMTCs) to 100 community development entities (CDEs) under the 2020 allocation round. The CDFI Fund received applications from a total of 208 CDEs requesting $15.1 billion in allocation authority.
Enhanced by a $1.5 billion increase from previous allocation rounds, the much anticipated 2020 round will continue to foster revitalization and economic growth in underserved communities on both the local and national levels. Although the program requires CDEs to invest at least 85% of Qualified Equity Investment (QEI) proceeds into Qualified Low-Income Community Investments (QLICIs), each of the 2020 allocatees committed to an investment of at least 95% into low-income communities—surpassing the program’s minimum requirement by at least $500 million.
The 2020 round marks the beginning of the program’s five-year $5 billion extension, which expires December 31, 2025, and advocates continue to push for NMTC permanency. The NMTC Coalition’s 2021 Progress Report highlights the program’s success in 2020, demonstrating the incredible impact realized during a year riddled by the ongoing COVID-19 pandemic:
- 272 projects moved forward with the help of NMTC financing
- 152 manufacturing businesses were supported through new facilities, shared industrial space, and business incubators
- 82 projects expanded healthcare access for 1.3 million patients
- 45,090 jobs were created in 2020, including 28,322 full-time equivalent jobs and 16,768 temporary construction jobs
About the New Markets Tax Credit Program
Enacted in 2000, the NMTC Program seeks to encourage private investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. For every $1 invested by the federal government, the NMTC Program generates more than $8 of private investment. Since its inception, the NMTC Program has supported the construction of 63 million square feet of manufacturing space, 98 million square feet of office space, and 69 million square feet of retail space.
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