Robust NMTC Equity Market Has Focus on Racial Equity

Published by Mark O’Meara on Monday, June 6, 2022
Journal Cover Thumb June 2022

The COVID-19 pandemic caused a pause in the new markets tax credit (NMTC) equity market. But the market has recovered and is now doing quite well.

Tom Oldenburg, vice president, business development officer of U.S. Bancorp Community Development Corporation (USBCDC), called the NMTC equity market, “Robust. It’s strong for sure, probably stronger now than six-to-12 months ago.”

En Jung Kim, managing director of NMTC investments at JPMorgan Chase, used the same word to describe the equity market. “Our pipeline is robust,” said Kim. “Last year, Chase invested in over $500 million in NMTC allocation across 30 projects.”

The market is very active right now.

“I am very pleased with what I have seen,” said Maurice Coleman, community development banking market executive at Bank of America. “Investors remain active in the market.”

David Gibson, senior vice president and manager of specialty tax credits at PNC Bank, agrees. “It’s been a much more competitive landscape among investors since the last award round,” said Gibson.

NMTC Equity Pricing

NMTC equity pricing has almost returned to its
pre-pandemic level.

“NMTC equity was in the low- to mid-80s before COVID. That was at the ceiling,” said Oldenburg. “Equity pricing is in the mid- to high-70s now.”

Bank of America is seeing similar pricing for NMTCs. “NMTC equity is in the 70 to 80-cent range,” said Coleman. “We are seeing all positive things right now.”

Gibson is seeing NMTC equity pricing in the “mid- to upper-70s.” Gibson said this increase in pricing, and therefore demand, will help absorb the now larger $5 billion in NMTC allocation awards.

NMTC Industry Rallies Around Racial Equity

The NMTC industry is rallying around investments that focus on racial equity.

“The industry is aligning around racial equity investing. It’s becoming a very important asset type,”  said Oldenburg. “We see NMTCs as an important tool we can use to help build Black wealth and invest in communities of color as part of our U.S. Bank Access Commitment.” Access Commitment is the bank’s long-term program to build wealth and redefine how it serves racially diverse customers and creates more opportunities for diverse employees, starting with the Black community.

In October 2020, JPMorgan Chase announced a $30 billion racial equity commitment to help close the racial wealth gap among Black, Hispanic and Latino communities. As part of that commitment, the firm established a new Racial Equity Initiative, which uses NMTC investments to spur growth and inclusion. Since 2020, the firm has provided $221 million in NMTC investments across 16 projects.

“With our Racial Equity Initiative, we focus on projects supporting Black-owned or Black-led businesses and projects that serve Black communities,” said Kim. “We also prioritize racial equity investments in markets with larger income disparities like Chicago, Washington, D.C., and Los Angeles, to name a few.”

But there are several other investment types that are popular in the market.

“I see an increase in federally qualified heath centers, rural manufacturing and nonprofit asset types with social services,” said Oldenburg.

Kim is also seeing a growth in the health care sector.

“We invest in a wide range of projects, supporting both for-profit and nonprofit developers,” said Kim. “In 2021, we saw an increase in activity in health care clinics.”

Access to food has become increasingly important to PNC Bank since the pandemic.

“During the pandemic, we shifted our focus to food security and basic services to help address critical needs in the communities we serve,” said Gibson. “Two years later and we’re still seeing significant need in this space, especially as COVID-19 disruptions continue and housing costs rise. That’s why we are so focused on allocating the right resources and tax credit programs to address each individual community’s needs.”

Coleman is seeing more investment in culture, entertainment and the arts, as well as health care facilities and food manufacturing.

Bank of America looks at its NMTC investing with a wider lens.

“We take a synergistic approach,” said Coleman. “We like to leverage all of our community development tools. We look at the low-income housing tax credit, historic tax credit and new markets tax credit and use them all together to provide economic opportunities. … Our goal is to take an integrated approach.”

JPMorgan Chase takes a similar approach to community development investing.

“The new markets tax credit, low-income housing tax credit, historic tax credit and lending are all tools that we have available to support and revitalize our communities,” said Kim.


“Initially, we paused in the throes of COVID. The economy as a whole was at a pause,” said Oldenburg. “Within six months, banks and syndicators still had an appetite for NMTCs and were able to adapt to the COVID environment.”

“While investor demand slowed initially, we were still incredibly active in this space supporting many projects that directly impacted health and human services across our national footprint,” said Gibson. “What we’ve seen over the last six months is a return to usual activity levels with demand only increasing.”

Kim said JPMorgan Chase had a different experience during the onset of the pandemic.

“We stepped up to be more active given the increased need during COVID,” said Kim. In fact, Kim said Chase surpassed its NMTC investment goals for 2021.

While business is continuing, COVID’s impacts are still being felt.

“The challenges we are facing now are a biproduct of the pandemic,” said Oldenburg. “There are supply chain issues and construction costs are increasing.”

“At the start of the pandemic, there was a concern across the industry about stress on portfolios,” said Gibson. “However, that stress never materialized, which has helped reinforce the resiliency of the credit. The program’s structures are sound and adaptable–helping to revitalize communities during the pandemic.”


Industry participants have an optimistic outlook on the year ahead.

“Large institutional investors like us, we project 12-to-18 months out,” said Oldenburg . “We continue to see a strong appetite for us and our syndicators.”

Kim agrees.

“I am optimistic that the equity market continues to be robust,” said Kim. “There is an ongoing effort for permanency of the NMTC program. That would be a great win for the industry.”