Largest single round
in the history of the New Markets Tax Credit Program will spur economic,
community development in nation’s distressed and low-income communities
November 17, 2016
WASHINGTON –
Today, the U.S. Department of the Treasury’s Community Development Financial
Institutions Fund (CDFI Fund) announced that 120 organizations nationwide will
receive a total of $7 billion in New Markets Tax Credit awards. This is the
largest single award round since the New Markets Tax Credit Program was created
in 2001.
“The CDFI Fund programs, including the New Markets Tax
Credit, address the needs and concerns of working Americans and help build an
economy that delivers results that they can see,” said Treasury Secretary Jacob
J. Lew. “By attracting private business and development to distressed
communities, this tax credit spurs economic growth, creates jobs, and brings
new services and opportunities where they are most needed.”
Secretary Lew announced the 2015-2016 awards at Educare DC,
an innovative, state-of-the-art preschool offering early childhood educational
programs in the Parkside Kenilworth community in Northeast DC. Educare DC
benefited from an NMTC investment provided to DC Housing Enterprises in 2009.
The 120 organizations awarded today are headquartered in 36
states, the District of Columbia, and Puerto Rico. The scope of this NMTC award
round means that more communities across the nation will have access to
investments for local jobs, community facilities, and safe and affordable
housing. It is estimated that more than $1.4 billion in New Markets Tax Credit
investments will be made in non-metropolitan counties. The number of
minority-owned or controlled organizations receiving awards also nearly tripled
from the previous award round.
“For the past 15 years, we have seen how the New Markets Tax
Credit program improves the quality of life and economic prospects for
low-income Americans,” said CDFI Fund Director Annie Donovan. “The historic $7
billion in tax credits awarded through the 2015-2016 round will support many
more community projects and businesses nationwide.”
Today’s awards bring the total amount awarded through the
New Markets Tax Credit Program to $50.5 billion. Historically, NMTC awards have
generated $8 of private investment for every dollar invested by the federal
government. Since 2001, NMTCs have generated more than $42 billion in
investments in low-income communities and businesses, resulting in the creation
or retention of more than 500,000 jobs, and the construction or rehabilitation
of more than 164 million square feet of commercial real estate.
Related Documents
About the New Markets
Tax Credit Program
The New Markets Tax Credit Program, established by Congress
in December 2000, permits individual and corporate taxpayers to receive a
non-refundable tax credit against federal income taxes for making equity
investments in vehicles known as Community Development Entities (CDEs). CDEs
that receive the tax credit allocation authority under the program are domestic
corporations or partnerships that provide loans, investments, or financial
counseling in low-income urban and rural communities. The tax credit provided
to the investor totals 39 percent of the cost of the investment and is claimed
over a seven-year period. The CDEs in turn use the capital raised to make
investments in low-income communities.
CDEs must apply annually to the CDFI Fund to compete for New
Markets Tax Credit Program allocation authority. The 120 organizations
receiving awards were selected from a pool of 238 applicants that requested
approximately $17.6 billion in allocation authority.
To learn more about the New Markets Tax Credit Program,
please view the program Fact
Sheet or visit www.cdfifund.gov/nmtc.
About the CDFI Fund
Since its creation in 1994, the CDFI Fund has awarded more
than $2.2 billion to CDFIs, community development organizations, and financial
institutions through the CDFI Program, the NACA Program, the Bank Enterprise
Award Program, the Capital Magnet Fund, and the Financial Education and
Counseling Pilot Program. In addition, the CDFI Fund has allocated $50.5
billion in tax credit allocation authority to Community Development Entities
through the New Markets Tax Credit Program, and $1.1 billion has been
guaranteed in bonds through the CDFI Bond Guarantee Program.
To learn more about the CDFI Fund and its programs, please
view the Fact Sheet or visit the CDFI Fund’s website at www.cdfifund.gov.
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