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The Community Development Financial Institutions Fund (CDFI Fund) recently released a comprehensive report and public data on the New Markets Tax Credit (NMTC) Program, covering investments from fiscal year (FY) 2003 to FY 2022. This extensive dataset offers invaluable insights into how NMTC investments have driven economic development in low-income communities across the nation. Here’s how you can harness this data to benefit your community and projects.
Key Highlights from the Summary Report
The report outlines significant milestones achieved through NMTC investments, providing a clear view of how these funds have been utilized:
– $66.6 billion in NMTC investments were directed through both Real Estate and Non-Real Estate Qualified Active Low-Income Community Businesses (QALICBs) as well as investments made through other Community Development Entities (CDEs).
– 8,024 QALICBs received financing through NMTC allocations.
– NMTC financing has supported the construction or rehabilitation of more than 259 million square feet of commercial real estate.
– In FY 2022 alone, NMTC financing facilitated the rehabilitation of more than 10.5 million square feet of commercial real estate.
– $27.6 billion was invested in community facility projects.
– 17,667 units of affordable housing were created.
– NMTC investments resulted in the creation or retention of more than 40,000 projected jobs and 850,000 actual jobs in various sectors, including business, construction, and tenant businesses.
How to Leverage this Data for Your Community
For stakeholders in economically distressed communities, understanding the trends and impacts of NMTC investments can be transformative. Here’s how you can utilize this newly released data:
1. Identify Key Investment Areas:
– Pinpoint geographic areas and project types that have successfully attracted NMTC investments.
– Focus on sectors with high impact, such as community facilities and affordable housing.
2. Model Future Initiatives:
– Analyze the examples of successful projects highlighted in the report to guide the development of new initiatives.
– Emulate the strategies that have proven effective in securing NMTC funding.
3. Connect with Experienced CDEs:
– Engage with Community Development Entities (CDEs) that have a track record in managing NMTC investments.
– Explore potential partnerships with these CDEs to benefit from their expertise and networks.
4. Utilize Flexible Financing Options:
– Capitalize on the innovative and flexible financing structures detailed in the report to meet the specific needs of your community.
– Consider terms and conditions that offer greater flexibility compared to traditional financing.
5. Commit to Serving High-Need Areas:
– Focus on projects in areas of higher distress, rural regions, or targeted populations to align with the priorities of NMTC allocations.
– Emphasize your commitment to these areas to attract potential investors and partners.
About the NMTC Program
The NMTC Program enables economically distressed communities to leverage private investment capital by offering investors a federal tax credit. To claim the tax credit, investments must meet statutory qualifications, primarily benefiting low-income communities with high poverty rates or low median family incomes. Through competitive application rounds, the CDFI Fund has allocated a total of $76 billion in tax credit authority to CDEs.
