Seventy-six organizations have been selected to share in $3.5 billion in New Markets Tax Credit (NMTC) awards, announced the Treasury’s Community Development Financial Institutions Fund (CDFI Fund).
The groups receiving awards were selected from a pool of 263 applicants requesting approximately $19.9 billion in allocation authority in the 2014 round. As a result, just 29% of the applicant pool received an allocation.
“The tax credit allocation authorities announced today will go to community development organizations that will make much-needed private-sector investments in businesses and real estate projects located in the nation’s distressed urban and rural communities. Along with these investments come jobs, vital services, and opportunities where they are needed the most,” said Treasury Secretary Jack Lew.
While there was no specific set-aside of tax credits for healthy food financing in the latest round, applicants were asked to indicate if they intend to devote a percentage of their allocation to such activities. Fifty-one of the allocatees, or 67.1%, indicated that they intend to devote some portion of their NMTC allocation to healthy food financing activities.
A number of organizations active in affordable housing received allocations, including a $40 million award to the Corporation for Supportive Housing (CSH).
“The Department of Treasury has given us the tools to leverage even more resources to spur the creation of supportive housing,” said Deborah De Santis, CSH president and CEO, in a statement. “Not only will we be able to create the dynamic to house vulnerable people facing instability, this award will help us fulfill our goal of bringing health-care services to hundreds more who need to access it.”
Thus far, CSH has used NMTC investments to leverage and add to other resources, which in turn have created about 200 units of supportive housing across the country, and enabled 15,000 healthcare visits for those facing homelessness and other forms of housing instability. In addition, CSH investments have generated approximately 800 high-quality permanent and construction jobs in communities.
The Community Builders (TCB) a Boston-based affordable housing developer, received a $40 million NMTC award. This is TCB’s third NMTC award.
TCB plans to use its 2014 NMTC allocation to invest in mixed-use, commercial, and community facility projects—particularly projects that bring health-care facilities to under-served areas and healthy foods to food deserts—that are critical to neighborhood revitalization but cannot obtain financing from other sources.
Through the program, the CDFI Fund allocates tax credit authority to Community Development Entities (CDEs) through a competitive application process. CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. With these capital investments, CDEs can make loans and investments to businesses operating in distressed areas that have better rates and terms and more flexible features than the market. The NMTC Program helps to offset the perceived or real risk of investing in distressed and low-income communities. In exchange for investing in CDEs, investors claim a tax credit worth 39% of their original CDE equity stake, which is claimed over a seven-year period.
Others receiving allocation include the Bank of America CDE, Capital One Community Renewal Fund, Chase New Markets Corp., Citibank NMTC Corp., ESIC New Markets Partners, Genesis LA CDE, IFF, Local Initiatives Support Corp., Low Income Investment Fund, National Trust Community Investment Corp., Ohio Community Development Finance Fund, RBC Community Development, U.S. Bank CDE, and Wells Fargo Community Development Enterprises.
For a full list of awards, visit the CDFI Fund’s award book.