US: Treasury Department’s CDFI Fund to grant USD 10b in NMTC authority for 2024-25

20 November, 2024

The US Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund), on 19 November 2024, released the Notice of Allocation Availability (NOAA) for the next round of the New Markets Tax Credit Program (NMTC Program).

A total of USD 10 billion in the Allocation Authority is available through this combined round that will span calendar years (CYs) 2024 and 2025 of the NMTC Program.

The CDFI Fund is posting the NOAA on its website in anticipation of its publication in the Federal Register on 21 November 2024.

The NMTC Program spurs investment of private sector capital into distressed communities by providing a tax credit to corporate or individual taxpayers who make Qualified Equity Investments (QEIs) in designated Community Development Entities (CDEs). The CDEs, in turn, invest the raised capital in businesses in low-income communities. The tax credit provided to the investor totals 39% of the investment in a CDE and is claimed over a seven-year credit allowance period.

Since the inception of the NMTC Program in 2000, the CDFI Fund has completed 20 allocation rounds and has made 1,667 awards totaling USD 81 billion in tax allocation authority. More information about the NMTC Program can be found on the programme’s webpage, www.cdfifund.gov/nmtc.

According to a CDFI Fund webpage, the NMTC Program incentivises community development and economic growth through the use of tax credits that attract private investment to distressed communities.

As of the end of FY 2021, the NMTC Program has:

Generated USD 8 of private investment for every USD 1 of federal funding;
Construction or rehabilitation of nearly 259.5 million square feet of commercial real estate;
Creation of retention of more than 894,000 jobs.

Programme updates

The CDFI Fund would like to highlight the following updates to the CY 2024-2025 round documents:

CY 2024-2025 NOAA:
- Applicants must meet all eligibility requirements in the CY 2024-2025 NOAA, including having been certified as a CDE as of the Federal Register publication date of the NOAA and updated QEI and Qualified Low-Income Community Investments (QLICIs) thresholds for prior Allocatees.
CY 2024-2025 NMTC Program Application:
- Question 25 has been updated to include two new sub-questions for applicants to indicate (1) the extent their NMTC investments will serve areas of deep distress, US territories, high migration rural counties, and NMTC Native Areas; and (2) its track record of serving such areas.
- Question 27 has been revised to include additional sub-questions related to the Applicant’s community accountability and involvement.
- Updates to various definitions in the NMTC Program Application Glossary, including the definition of Disadvantaged Businesses.
- Additional revisions were made to clarify instructions and streamline the information collected.
CY 2024-2025 NMTC Program Application FAQs:
- Please review the CY 2024-2025 NMTC Program Application Frequently Asked Questions (FAQs) as the document includes new and revised guidance that is important in completing the application.