The Big Picture: New Data Sheds Light on NMTC Investments During First Ten Years

5 min read

In the first 10 years of the federal new markets tax credit (NMTC) program, 8,060 investments totaling $31.1 billion were made in 3,849 businesses and projects throughout the country, according to new data and a companion summary released by the Community Development Financial Institutions (CDFI) Fund. The material shows the growing investment volume each year, the wide variety of businesses and projects financed, and geographic usage patterns.

(For chart showing NMTC investments by state for first 10 years, click here.)

The CDFI Fund issued a summary of the data on all reported NMTC investments for the 10 federal fiscal years ending September 30, 2012, as well as a separate Excel data file listing all of these NMTC investments. Each listing contains a brief description of the type of business or project, the location, the year and size of the NMTC investment, and the community development entity (CDE) that supplied the allocation. CDEs are not identified for projects and businesses receiving multiple allocations.

Under the new markets tax credit program, CDEs compete in periodic funding rounds for NMTC allocation authority that is used to help finance eligible businesses located in low-income communities. They issue the tax credits to investors in exchange for private capital that is deployed as Qualified Low Income Community Investments (QLICIs) in Qualified Active Low Income Community Businesses (QALICBs). Investors claim the tax credit over seven years.

In the 11 funding rounds to date, the CDFI Fund has made 836 awards of NMTC allocation authority totaling $40 billion.

Breakdown of Investment, Businesses

The CDFI Fund summary shows a steady rise during FY 2003-2012 in the aggregate dollar amount of QLICIs reported each year, starting at $97 million in FY 2003 and climbing in nearly each successive year, culminating in $4.4 billion in FY 2012.

The $31.1 billion in NMTC investments (QLICIs) over the 10-year period accounted for 49.5% of the $62.9 billion in total estimated costs for the 3,849 funded businesses (QALICBs).

The CDFI Fund data breaks down the QALICBs – and the QLICIs funding them – into three categories: real estate projects (development and leasing); operating businesses; and other purposes.

According to the summary:

  • 45% of the total number of QALICBs were real estate ventures, 53.3% were operating businesses, and 1.7% were for other purposes.
  • 57.9% of the total number of NMTC investments were for real estate QALICBs, 40.1% for operating businesses, and 1.9% for other types.
  • 85.3% of the total NMTC investment (dollar amount) was in metropolitan areas, 13.4% in non-metropolitan areas, and 1.3% in locations spanning both categories.
  • 87.3% of QALICBs received NMTC allocation from one CDE while 12.7% – 489 QALICBs – received allocations from multiple CDEs.
  • 72.7% of businesses and projects were in census tracts meeting one of three indicators of severe distress, while 24.1% were in locations meeting all three indicators.

Breakdown by States, CDEs
Analysis of the data file revealed that California led all states by far in the greatest number of QALICBs in the 10-year period, at 412, and also topped all states in the aggregate dollar amount of QLICIs, at nearly $2.8 billion. But New York State was No. 1 in estimated total project costs, at nearly $6.6 billion.

Nevada, by far, had the least NMTC investment of any state, with just $1,982,203 placed in three QALICBs.

Analysis of the data also revealed:

  • Milwaukee had the most QALICBs of any city, at 118, followed by New York City (115), New Orleans (103), St. Louis (103), and Chicago (90).
  • 45202 (in Cincinnati, Ohio) was the zip code containing the most QALICBs (32), followed by 45640 (Jackson, Ohio, 26), 45662 (Portsmouth, Ohio, 25), 63103 (St. Louis, 23), and 70130 (New Orleans, 22).
  • National New Markets Tax Credit Fund, Inc. led all CDEs in providing NMTC allocations to the most QALICBs: 262. This tally only included QALICBs in which it was the only CDE providing allocation.

New Data Welcomed

Bob Rapoza, Founder and President of Rapoza Associates, which represents the New Markets Tax Credit Coalition, hailed the release of the comprehensive new data and said it demonstrates the powerful impact of the NMTC program in creating numerous jobs and investment in low-income communities across the U.S.

“It’s important for Congress and policy makers to understand what the new markets tax credit actually does,” said Rapoza. “And this data proves that the credit has an enormous positive impact in revitalizing communities of all sizes and types.”

Policy Associate Paul Anderson said the data also shows that the NMTC program continues to expand to better serve states that were underserved in the early years. As an example, he cited Idaho, which has seen increased NMTC investment in recent years.

Rapoza and Anderson said that another trend has been an increase in recent years in the number of community and health facilities financed under the NMTC program.

(To view the NMTC data file and CDFI Fund summary, go to

Reported NMTC Investments in Fiscal Years 2003-2012

Purpose No. of QALICBs No. of QLICIs Amount of QLICIs
Real Estate 1,731 4,670 $20,315,818,262
Operating Businesses 2,052 3,234 $10,224,240,295
Other 66 156 $577,698,894
Total 3,849 8,060 $31,117,757,451

Source: CDFI Fund

Top 10 States by Number of QALICBs, Fiscal Years 2003-2012

Rank State No. of QALICBs Amount of QLICIs Est. Total Project Costs
1 California 412 $2,786,470,430 $5,101,599,268
2 Ohio 323 $1,579,596,905 $3,274,167,816
3 Wisconsin 204 $1,288,806,642 $2,481,878,372
4 Louisiana 199 $2,134,336,801 $4,478,139,312
5 New York 199 $2,565,083,170 $6,599,232,569
6 Massachusetts 196 $1,555,443,308 $2,360,177,020
7 Illinois 151 $895,532,556 $1,616,306,478
8 Missouri 142 $1,293,061,630 $2,415,665,238
9 Minnesota 138 $802,610,080 $1,316,031,925
10 Kentucky 126 $667,799,239 $1,495,848,234

Source: Compiled from CDFI Fund public file data