One-hundred community development entities (CDEs) got good news Sept. 1 when the Community Development Financial Institutions (CDFI) Fund announced calendar-year 2020 (CY 2020) new markets tax credit (NMTC) allocation awards.

The CDFI Fund provided $5 billion of allocation authority to the 100 CDEs, which included nine first-time awardees. The $5 billion award total was an increase from the $3.5 billion in allocation authority over most of the NMTC history. The next five rounds will also be for $5 billion per year, due to legislation passed at the end of 2020.

A total of 208 CDEs applied for allocation, requesting $15.1 billion in allocation authority. The 48.1% success rate for applying CDEs was the highest since the combined 2015-2016 round, which had $7 billion in allocation authority. The high success rate was at least partly due to the CDFI Fund maintaining a similar average award size despite the greater funding amount.

Award sizes varied from $15 million to $65 million, with 15 CDEs receiving the highest total. Most CDEs were at the higher end of the allocation scale: Seventy-two of the 100 CDEs received allocations of $50 million to $65 million.

At the other end of the scale, one CDE received $15 million in allocation authority and four CDEs received $20 million each.

The CDFI Fund reported that the 100 allocatees’ headquarters are located in 34 states and the District of Columbia. Of the $5 billion in allocation authority, nearly $2.7 billion will be focused on major urban areas, while slightly more than $1.1 billion will be invested in minor urban areas. Nearly $1.1 billion will be invested in rural areas, according to the CDFI Fund.

The CDFI Fund also reported that 78% of the investment will likely be used to finance and support loans to or investments in operating businesses in low-income communities. The other 22% will be used to finance and support real-estate projects in those low-income communities.

The CDFI Fund also reports on allocations to minority- or Native-owned or controlled entities. For the CY 2020 round, 47% of highly qualified entities that fit that description (Minority CDEs) received allocations, compared to 56% of the general highly qualified applicant pool. Fourteen Minority CDEs received allocations totaling $670 million.

The NMTC incentive awarded its first allocations in 2003. In 17 rounds, the CDFI Fund has made 1,354 allocation awards totaling $66 billion in tax credit authority. For every $1 invested by the federal government, the NMTC incentive generates more than $8 in private investment, according to the CDFI Fund.