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March 16, 2011
Treasury Awards $3.5 Billion in New Markets Tax Credits
    by Robert Kropp

The Community Development Financial Institutions Fund allocates $3.5 billion to 99 organizations to promote growth in communities with high rates of poverty and unemployment.


The US Treasury announced recently that the Community Development Financial Institutions Fund (CDFI Fund) has awarded $3.5 billion in New Markets Tax Credits (NMTCs), which provide investors with a credit against federal income taxes for investing in Community Development Entities (CDEs), to 99 CDEs headquartered in 27 states and the District of Columbia.

In announcing the awards, Donna Gambrell, Director of the CDFI Fund, stated, "The New Markets Tax Credit continues to be a tool for job-creation and economic revitalization in areas that struggle to attract investment because of poverty, unemployment and a lack of opportunity…our partners have demonstrated why this tool has been so effective in making literally thousands of projects possible across the country and give Americans a chance to make a living, to start a business and to build a better future in areas that need it most."

Under the NMTC program, individual and corporate taxpayers receive credits totaling 39% of the cost of investments in CDEs. The credit is claimed over a seven-year period.

Four CDEs received the largest awards, of $77 million each. Coastal Enterprises of Maine provides financing for small businesses, natural resources industries, community facilities, and affordable housing. A member of Opportunity Finance Network (OFN), a network of CDFIs, Coastal Enterprises has provided financing totaling $375 million to more than 1,900 businesses since 1977.

The other recipients of the largest awards are the National Community Fund I of Portland, Oregon, which provides financing for real estate projects in distressed communities; the National New Markets Fund (NNMF) of Minneapolis, which invests in real estate development projects in urban and rural low-income communities; and Rural Development Partners (RDP), which focuses on agricultural, forestry, and renewable energy projects.

 

 
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