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New Market Tax Credit News Briefs - Novmeber 2023

The Community Development Financial Institutions (CDFI) Fund Oct. 4 announced that 52 organizations were awarded $321.2 million through the fiscal year 2023 (FY 2023) round of the Capital Magnet Fund (CMF). CMF awards are used for the development, preservation, rehabilitation or purchase of affordable housing and for community facilities serving low-income communities, such as day care centers, workforce development centers and health care clinics. Awardees are required to leverage their awards with public and private investment by a ratio of at least 10 to 1. FY 2023 awardees anticipate these awards will leverage more than $8.6 billion in private investment and plan to develop more than 32,000 affordable housing units. The awardees serve 48 states, the District of Columbia, Puerto Rico and Guam. A total of 144 organizations applied for CMF awards, requesting more than $1.1 billion.

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The CDFI Fund announced Sept. 28 three $100 million guarantees under the CDFI Bond Guarantee program to provide long-term, low-cost, fixed-rate capital for projects in low-income and distressed rural, urban and Native communities. Community Reinvestment Fund will issue a $100 million bond on behalf of Lendistry, Bank of America CDFI Funding Corporation will issue a $100 million bond on behalf of Self-Help Ventures and another $100 million bond on behalf of California Community Reinvestment Corporation. The CDFI Bond Guarantee program is designed to enable CDFIs to execute appropriately scaled projects, including the development of commercial real estate, affordable rental housing units, charter schools, day care centers and health care centers. It also allows CDFIs to provide capital for small businesses and nonprofits.

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The CDFI Fund Sept. 15 announced a transaction-level report (TLR) deadline extension to Dec. 31 for NMTC award allocatees with a TLR due date between Aug. 31 and Nov. 30. The announcement also includes CDFI, Native American CDFI Assistance Program and Rapid Response Program award recipients. The extension allows the CDFI Fund to implement changes in the Awards Management Information System (AMIS) for TLRs. The CDFI Fund plans to send an email once the TLRs are reopened in AMIS.

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A bipartisan group of six senators introduced legislation to create a tax credit for equity-equivalent investments or long-term patient capital available to CDFIs. The Community Development Tax Credit Act of 2023 (S. 2963) would create a CDFI tax credit worth 70%, taken as 3% over the first 10 credit allowance dates and 4% over the next 10 credit allowance dates. The applicable percentage would increase by one point for any qualified CDFI investment without a fixed term or duration. Qualified investments would include equity investments, loans with a minimum term of 10 years and equity equivalent investments for CDFI loan funds. CDFIs would be required to apply for allocation through the CDFI Fund and the credit would be capped at $1 billion in 2023, $1.5 billion in 2024 and $2 billion for each year thereafter, adjusted for inflation. Similar legislation was introduced in the previous session of Congress.

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The CDFI Fund published a notice in the Sept. 22 Federal Register requesting comment on the updated application questions for the CDFI program, Native American CDFI Assistance program and the CDFI Fund’s financial assistance and technical assistance programs. The revised programs application questions have been modified to reflect public comments received through a previous request for public comment. Comments were due Oct. 23.

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PNC celebrated a pair of NMTC investments in Northern California in September. The Fresno Mission City Center helps families experiencing homelessness in Fresno. PNC provided more than $8 million of NMTC equity and $4 million in NMTC allocation to Accion Opportunity Fund and New Markets Community Capital LLC to rehabilitate a former hospital campus. In Redding, PNC provided $6.5 million in NMTC equity and $4 million in NMTC allocation to California Statewide Communities Development Corporation and Urban Action Community Development LLC for the Shasta Community College Leadership Center, which works through several vehicles to better serve the community.

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The CDFI Fund Oct. 2 released guidance to help with the completion of the certification of material events form in AMIS. The form is required for specific material events which must be reported for several programs overseen by the CDFI Fund, including the NMTC incentive, CDFI Bond Guarantee program, CDFI Program/Native American CDFI Assistance program and more. The CDFI Fund released an AMIS training manual and frequently asked questions (FAQ) document.

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New Markets Support Company in September rebranded as Broadstreet Impact Services. Initially an offshoot of the Local Initiatives Support Corporation to oversee its NMTC product, the new name is aimed at better encompassing the breadth of services Broadstreet Impact Services provides.

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The Office of the Comptroller of the Currency released 52 Community Reinvestment Act performance evaluations that became public in August and September. Fourteen institutions were rated outstanding and 38 received satisfactory ratings. The lists include national banks, federal savings associations and insured federal branches of foreign banks. Possible ratings are outstanding, satisfactory, needs to improve and substantial noncompliance.

 

Journal Category:

New Markets Tax Credit

Authors:

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