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 the fiscal year (FY) 2021 reporting period. 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 CDEs, along with their audited financial statements, within six months after the end of their fiscal year.
Key highlights from the summary report include:
- Based on program activities reported through the FY 2021 reporting period, $62.5 billion in NMTC investments were directed through both Real Estate and Non-Real Estate Qualified Active Low-Income Community Business (QALICBs) and investments made through other CDEs.
- Based on program activities reported through the FY 2021 reporting period, Allocatees disbursed a total of $62.5 billion in QEI proceeds to 7,510 QALICBs.
- Through the FY 2021 reporting period, NMTC financing has been used to construct or rehabilitate over 238 million square feet of commercial real estate.
- In FY 2021, NMTC financing helped to create or rehabilitate over 13.9 million square feet of commercial real estate.
- Through the FY 2021 reporting period, nearly $25 billion in investments were made in community facility projects.
- In FY 2021, over 42% of Qualified Low-Income Community Investments (QLICIs), which totaled more than $1.4 billion, were investments in projects with a community facility component.
- Through the FY 2021 reporting period, approximately 17,000 units of housing that have been created are reported as affordable housing.
- Through the FY2021 reporting period, NMTC investments have led to the reported creation or retention of over 512,200 construction jobs and over 344,000 permanent jobs in businesses financed.
The summary report also documents the extent to which: (1) CDEs go beyond the minimum statutory definition of Low-Income Communities 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).
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 18 application rounds of the NMTC Program, the CDFI Fund has made 1,461 allocations, allocating a total of $71 billion in tax credit authority to CDEs through a competitive application process. This $71 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.