New Markets Tax Credit Awards: Understanding the Program and Its Impact

The New Markets Tax Credit (NMTC) program is a powerful tool for stimulating economic growth in underserved communities. The program awards tax credits to investors who invest in qualified community development entities (CDEs) that create jobs and provide essential services to low-income areas.

A total of $75 billion in tax credits have been awarded through the NMTC program since its inception in 2000. This significant investment has resulted in the creation of over 1.2 million jobs and the development of over 150,000 units of affordable housing.

The NMTC program has a proven track record of success, with a 90% job retention rate and a 95% satisfaction rate among CDEs.

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New Markets Tax Credit Awards are a significant source of funding for community development projects. Dakota Business Lending (DBL) has received a third New Markets Tax Credits Award for $50 million, bringing their total allocation to $60 million.

DBL has used their NMTC awards to support seven small businesses in low-income or distressed areas, creating and retaining 556 permanent jobs. These businesses have also donated over $350,000 to 14 local non-profits.

The U.S. Treasury Department's Community Development Financial Institution (CDFI) Fund administers the NMTC program, which allocated a total of $5 billion to 104 Community Development Entity (CDE) applicants across the nation in 2021. The program aims to encourage investments in low-income census tracts, creating jobs and new opportunities.

The National Trust Community Investment Corporation (NTCIC) has also been awarded $50 million in New Markets Tax Credit allocation authority. They plan to deploy their allocation to historic preservation-based community investment projects, prioritizing those that create quality jobs and support community facilities.

Here are some key facts about the NMTC awards:

NMTC awards are a powerful tool for community development, and organizations like DBL and NTCIC are making a significant impact with their investments.

The award amounts for the new markets tax credit program can be substantial. In CY 2021, the NMTC Program Award Book highlighted significant awards.

Each award can range from tens of millions to hundreds of millions of dollars. This funding can make a huge difference in the communities that receive it.

The CY 2021 NMTC Program Award Book provides a comprehensive look at the program's past awards. It's a valuable resource for understanding the scope and impact of the program.

The award amounts can vary greatly depending on the specific project and location. This flexibility allows the program to address a wide range of community needs.

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Dakota Business Lending has received three New Markets Tax Credit awards, totaling $50 million, with two previous awards of $30 million each in 2021 and 2022.

The U.S. Treasury Department's Community Development Financial Institution (CDFI) Fund selected DBL for these awards.

A total of $5 billion was allocated to 104 Community Development Entity (CDE) applicants across the nation through the NMTC program this year.

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DBL's NMTC priorities remain the same, assisting small businesses in low-income or distressed areas and creating employment opportunities.

To date, DBL has allocated $60M total NMTC awards to seven qualifying small businesses.

These allocations have had a $148.2M+ direct project impact and helped create and retain 556 permanent jobs for citizens across the state.

DBL has used the NMTC program as a unique financing mechanism, providing gap financing with interest only payments for seven years.

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