Report: CDEs Often Exceed Minimum Financing Requirements

Tuesday, August 1, 2017 - 9:30am

New markets tax credit (NMTC) allocatees reviewed for a report often exceeded minimum financing thresholds to provide more flexible capital and investment in more highly distressed areas than required by the program, according to a report released today by the Community Development Financial Institutions (CDFI) Fund. “Compliance Review of New Markets Tax Credit Program” found no instances of noncompliance among the reviewed community development entities (CDEs) in adhering to NMTC allocation agreements and the Internal Revenue Service (IRS) statute. The report also found that flexible financing provided by CDEs reduces the net cost of capital for borrowers and that fees and other charges do not appear to affect the cost of capital for low-income community businesses significantly.