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Thursday, July 28, 2022

The Community Development Financial Institutions (CDFI) Fund published in today’s Federal Register a request for public comment concerning the criteria to designate a certified CDFI as a Minority Lending Institution (MLI). While no federal funding is associated with an MLI designation, the CDFI Fund seeks to implement this designation for CDFIs that wish to be recognized for high levels of service and accountability to minority populations and to identify barriers that those CDFIs experience in providing access to capital. The CDFI Fund will use the designation for limited purposes, including data collection and reporting. The Federal Register posting includes the list of questions to which the CDFI Fund is requesting comment. Comments must be submitted by Nov. 25.

Wednesday, July 20, 2022

The Community Development Financial Institutions (CDFI) Fund will pause the acceptance of new CDFI certification applications from Oct. 1, 2022, through April 2, 2023, as it deploys new application and reporting tools. The revised certification application, annual certification and data collection report will be released for a second round of public comment in the coming weeks by the Office of Management and Budget, with the updated versions implemented April 3, 2023. During the blackout period, CDFIs will be required to be in a state of good standing with respect to their certification status. Organizations must remain in compliance with all outstanding CDFI Fund awards reporting requirements, including recipients of the new markets tax credit (NMTC) and Capital Magnet Fund (CMF). The CDFI Fund posted a frequently asked questions document on the blackout period.

Friday, July 15, 2022

The Community Development Financial Institutions (CDFI) Fund will publish in Tuesday’s Federal Register an amended notice of funds availability (NOFA) for the fiscal year 2022 CDFI Equitable Recovery Program (CDFI ERP) round. The amended NOFA extends several deadlines, including an extension for CDFI ERP applications to Sept. 22 at 11:59 p.m. ET and extension to submit the OMB Standard Form-424 Mandatory to Aug. 18. In addition to the deadline extensions, the CDFI Fund also amended the NOFA to clarify eligibility requirements around audited financial statements. The CDFI ERP provides $1.75 billion to CDFIs in grants to respond to the economic impacts of the COVID-19 pandemic. Awards are provided to CDFIs to expand services in low- or moderate-income communities and to borrowers that have significant unmet capital or financial services needs and were disproportionally affected by the pandemic.

Thursday, June 30, 2022

The Community Development Financial Institutions (CDFI) Fund today announced that it tentatively plans to update low-income community data for the new markets tax credit (NMTC) incentive in spring 2023. The updated data will be based Census Bureau data from the 2016-2020 American Community Survey (ACS), with a one-year transition period. Eligibility is currently determined by data collected through the 2011-2015 ACS. 

Thursday, June 23, 2022

Surveyed community development entities (CDEs) using new markets tax credits (NMTCs) completed 277 projects that generated 52,718 jobs in 2021, according to the 2022 New Markets Tax Credit Progress Report, prepared by the NMTC Coalition. The organization has surveyed CDEs about their activity annually since 2005. Highlights of the 2021 report include that the 277 projects totaled $6.1 billion in investment and received $3.2 billion in NMTC allocation; projects were in 47 states and territories; 86% of projects were in severely distressed communities; a record 31% of NMTC financing went to non-metropolitan counties and the median equity price reported was 74 cents per dollar of credit.

Thursday, June 23, 2022

The Community Development Financial Institutions (CDFI) Fund today opened the fiscal year 2022 (FY 2022) round for the CDFI Equitable Recovery Program (ERP), which will provide approximately $1.73 billion in awards to certified CDFIs to respond to the economic impact of the COVID-19 pandemic. A Notice of Funds Availability (NOFA) will be published in Friday’s Federal Register. All applications must be submitted to the CDFI Fund by Aug. 23 and application materials are on the CDFI ERP page.

Wednesday, June 22, 2022

The Community Development Financial Institutions (CDFI) Fund today awarded a record $336.4 million to 59 organizations through the fiscal year 2021 (FY 2021) round of the Capital Magnet Fund (CMF). The funds will support financing for the preservation, rehabilitation, development or purchase of affordable housing as well as related economic development. The award total is a 23% increase over the FY 2020 round. Awardees must leverage their awards with other private and public investment by at least a 10-to-1 ratio. The 59 awardees collectively serve 47 states, plus the District of Columbia and Puerto Rico.

Tuesday, June 21, 2022

A bipartisan group of U.S. senators introduced legislation to create a tax credit for private investment in community development financial institutions (CDFIs). The Community Development Investment Tax Credit Act (S. 4418) would create a credit worth 3% of qualified investments in CDFIs for the first 10 credit allowance dates and 4% for the next 10 credit allowance dates, with a 1% increase for equity or equity equivalent investments. 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 2022, $1.5 billion in 2023 and $2 billion for each year thereafter, adjusted for inflation. The bill’s sponsors are Sens. Roger Wicker, R-Mississippi; Cindy Hyde-Smith, R-Mississippi; Mark Warner, D-Virginia; and Chris Van Hollen, D-Maryland. The sponsors also released a one-page summary of the legislation.

Tuesday, June 14, 2022

The proposed global minimum tax and its potential effect on community development tax credit equity investments is the subject of this week’s Novogradac Tax Credit Tuesday podcast episode. Michael Novogradac, CPA, and Novogradac partner Brad Elphick, CPA, discuss the proposal and potential approaches to mitigate the damage to tax credit equity investment. They also examine next steps in the proposal and for community development tax credit stakeholders. Novogradac has also published a white paper on the subject called Pillar Two and Tax Credit Equity Investments and is seeking public comment on the paper. Comments may be sent to [email protected]

The weekly Tax Credit Tuesday podcast offers an in-depth discussion of various tax incentive topics with expert guests.

Thursday, June 2, 2022

The Government Accountability Office (GAO) sent a letter to Treasury Secretary Janet Yellen in May with updates on policy recommendations, including an update on a 2014 recommendation concerning the new markets tax credit (NMTC) incentive. In the letter, the GAO references the 2014 recommendation that Treasury issue guidance on how funding or assistance from other government programs can be combined with the NMTC, including the extent to which those funds can be used to leverage the NMTC by being included in the qualified equity investment (QEI). The letter highlights that the Community Development Financial Institutions (CDFI) Fund plans to solicit public comments on additional data to be collected from community development entities (CDEs) which would be used to identify NMTC-financed properties that may have excessive public funding. That information would inform actions to respond to the intent of the 2014 recommendations

Thursday, May 5, 2022

The three major federal bank regulatory agencies today issued a joint notice of proposed rulemaking to strengthen and modernize Community Reinvestment Act (CRA) regulations. The Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (Fed) and Federal Deposit Insurance Corporation (FDIC) jointly issued the proposal, which would be the first significant interagency revision to the CRA since 1995. The proposal would adopt a metrics-based approach to CRA evaluation of retail lending and community development financing that includes public benchmarks. The rule would also clarify eligible CRA activities that are focused on low- and moderate-income, rural and underserved communities, including affordable housing. 

Wednesday, May 4, 2022

The Community Development Financial Institutions (CDFI) Fund this week sent a letter to new markets tax credit allocatees with calendar year (CY) 2015-2020 allocation agreements announcing a change to extend the 36-month lookback period to Dec. 31, 2022. The lookback period previously included transactions closed by May 31. The CDFI Fund change applies to documented reasonable expenditures outlined in Section 3.3(j)(i) of the allocation agreement–a period increased from 24 months to 36 months before the qualified low-income community investment (QLICI) closing date–for QLICIs closed between June 1, 2020, and Dec. 31, 2022.

Monday, March 28, 2022

President Joe Biden today released his proposed fiscal year 2023 (FY 2023) budget, which includes provisions to make the new markets tax credit (NMTC) permanent and to allow selective basis boosts for bond-financed affordable housing properties, which pair with 4% low-income housing tax credits (LIHTCs). The budget also includes $71.9 billion for the U.S. Department of Housing and Urban Development (HUD)–$6.2 billion more than the 2022 level–and $331 million for the Community Development Financial Institutions (CDFI) Fund, an increase of $25 million over the FY 2022 level.

Friday, March 25, 2022

Community development entities (CDEs) applying in the calendar year 2021 round of new markets tax credit (NMTC) allocation are required to complete a transaction-level report (TLR) interim certification in the Community Development Financial Institutions (CDFI) Fund’s Awards Management Information System (AMIS) by Monday.

Tuesday, March 15, 2022

The Community Development Financial Institutions (CDFI) Fund today reminded organizations that received a CDFI Fund award and/or allocation to check the due date for their annual compliance reports. Many organizations have reports due by March 31, 2022. Due dates for reports can be found in the assistance or allocation agreement and on the report schedule in the CDFI Fund’s Awards Management Information System.

Thursday, March 10, 2022

Legislation introduced in the Minnesota Senate this week would create a state new markets tax credit (NMTC) incentive worth 50% of qualified equity investments (QEI) up to double the QEI authority for the federal NMTC. Under S.F. 3879, the annual statewide cap would be $50 million for metropolitan counties and $50 million for nonmetro counties. The state NMTC would be taken over seven years, with no credit earned in the first two years and 10% per year taken over Years 3-7. The state NMTC would be effective for taxable years beginning Jan. 1, 2023 and have a sunset date of Dec. 31, 2030.

Wednesday, March 9, 2022

The House of Representatives today released a $1.5 trillion omnibus spending bill for fiscal year (FY) 2022 that includes a 6.7% increase in nondefense spending, the largest such increase in four years. Gross appropriations for the U.S. Department of Housing and Urban Development (HUD) is $65.7 billion, an 8.9% increase from FY 2021. The legislation contains no provisions related to the low-income housing tax credit (LIHTC) nor to renewable energy provisions that expired at the end of 2021. This is the first fiscal year without discretionary spending caps from the Budget Control Act of 2011.

Wednesday, March 9, 2022

Legislation introduced in the Connecticut General Assembly would create a state new markets tax credit (NMTC) incentive for calendar years 2023 and 2024. S.B. 382 would be for 39% of qualified equity investments (QEIs) with a statewide cap of $25 million and would be taken in the same manner as the federal NMTC (5% for each of the first three years, 6% for each of the next four years). The project cap for qualified low-income community investment in a business would be the lesser of 40% of expected eligible costs or $5 million.

Monday, February 28, 2022

The Community Development Financial Institutions Fund today announced it received 199 applications from community development entities (CDEs) under the calendar year (CY) 2021 round of the new markets tax credit (NMTC). Applicants are headquartered in 43 states, the District of Columbia, Guam and Puerto Rico. These CDEs requested $14.7 billion in total NMTC allocation authority, more than triple the $5 billion available under the CY 2021 round.

Friday, February 25, 2022

The Community Development Financial Institutions (CDFI) Fund will publish a notice of guarantee availability (NOGA) Monday, inviting applications for the CDFI Bond Guarantee program for fiscal year 2022. The CDFI Fund has up to $500 million in guarantee authority and the notice explains application submission and evaluation requirements and processes. Bond issues will have a minimum guarantee of $100 million each up to the aggregate total of $500 million. Qualified issuer applications are due by 11:59 p.m. ET April 20 and guarantee applications are due by 11:59 p.m. April 26