Key Highlights Of The 2021 $5 Billion NMTC Allocations
In September, the Community Development Financial Institutions Fund (CDFI Fund) announced $5 billion in New Markets Tax Credits (NMTCs). The CDFI Fund awarded tax credit allocations to 100 Community Development Entities (CDEs). The allocation amounts range from $15 million to $65 million. The CDFI Fund made allocation awards to approximately 33.1% of the total amount requested by applicants, to 100 CDEs, which was 48% of the total pool of applicants.
45 of the 100 CDEs will focus investment activities on a national service area, 26 will focus on a multi-state area, 13 will focus on a specific state, and 16 will focus on specific local service areas. Estimates reveal that the award recipients will make more than $1 billion in New Markets Tax Credit investments in non-metropolitan counties.
The CDFI Fund’s NMTC allocation raises the total amount awarded through the program to $66 billion. The record shows that NMTC Program awards have generated $8 of private investment for every $1 invested by the federal government.
Some other key highlights of the 2021 allocations:
- *Approximately $3.8 billion (78%) of NMTC investment proceeds will likely be used to finance and support loans to or investments in operating businesses in low-income communities.
- *Approximately $1.1 billion (22%) of NMTC investment proceeds will likely be used to finance and support real estate projects in low-income communities.
- *$2.689 billion will be invested in major urban areas.
- *$1.106 billion will be invested in minor urban areas.
- *$1.094 billion will be invested in rural areas.
Four Pennsylvania entities received NMTC allocations. They include the following:
Reinvestment Fund, Inc. ($60 million)
Reinvestment Find, Inc. aspires to expand opportunities. Since founded in 1985, Reinvestment Fund has invested more than $2.4 billion in Philadelphia’s they do more than just philly deals I think they are very active in Baltimore] deserving communities in the most need. It focuses on using financial and analytical tools to provide policy solutions that encourage economic growth.
PIDC Community Capital ($60 million)
PIDC Community Capital (PIDC) offers years of experience helping the communities of Philadelphia develop and grow. It structures and invests in public-private partnerships that serve Philadelphia’s key policy areas and developmental priorities. PIDC features flexible financing tools and a targeted portfolio of industrial and commercial real estate to support its mission “to spur investment, support business growth, and foster developments that create jobs, revitalize neighborhoods, and drive growth to every corner of Philadelphia.”
PNC Community Partners, Inc. ($55 million)
PNC Community Partners, Inc. received $55 million in NMTC allocation to benefit the residents and communities of Pittsburgh. PNC operates nationally and has $553 million in direct allocation under management. It is an active investor through third-party CDE relationships with expertise in closing transactions with multiple CDEs.
Pittsburgh Urban Initiatives, LLC ($50 million)
PUI supports the community and economic development objectives of the Urban Redevelopment Authority of Pittsburgh. In total, PUI has received $188 million in total NMTC allocation to benefit the City of Pittsburgh. PUI has created 2,066 construction jobs and 3,72 permanent jobs in Pittsburgh!
As a CDE, PUI’s hard work has had a prodigious effect on low-income neighborhoods by facilitating New Markets Tax Credit (NMTC) investments for projects in Pittsburgh. Some of these amazing projects include:
- *$6 million investment in 7800 Susquehanna Street
- *$6 million investment in City of Asylum
- *$2 million investment in The Proud Company
- *$6 million investment in Mill 19
It is never too early to start preparing for the next round of NMTC allocations. Savage & Associates can help you every step of the way.. Call us today!
Let’s Work Together to Develop our Communities
f you want to learn more about NMTCs, contact Savage & Associates at 215.880.9441 in Philadelphia, or 202.817.3941 in Washington D.C. to arrange a consultation. Dionne Savage can assist you to evaluate the benefits provided by the New Market Tax Credits, Low-Income Housing Tax Credits, C-PACE, Historic Tax Credits programs, and other vital economic development tools that benefit low-income communities throughout the United States. Visit our website at Savage & Associates 24 hours a day, seven days a week for more information.