The Community Development Financial Institutions (CDFI) Fund has announced the award of $5 billion in New Markets Tax Credit (NMTC) authority for the calendar year 2023 allocation round.

Community Housing Capital (CHC), a Community Development Entity (CDE) partner of Smith NMTC, has received a $40 million NMTC allocation—its largest award to date!—that will support investments in affordable homeownership projects.

“We’re incredibly proud of our partnership with Community Housing Capital,” shares Howard Smith, Smith NMTC Co-Founder and Principal.

“Their commitment to creating flexible and accessible capital products for nonprofit developers aligns with our mission to leverage NMTCs for affordable homeownership. This allocation will accelerate their impact, helping to alleviate the national housing shortage while revitalizing neighborhoods, reducing the racial wealth gap, creating desperately needed affordable housing stock, creating construction jobs, bringing tax dollars and fees to cities and towns across the U.S., and strengthening the economic stability of families and their communities.”

Both CDEs managed by Smith NMTC, CHC and The Housing Partnership Network, Inc. have received awards for the 2023 round. Along with an award to Habitat for Humanity International, a total of $135 million in NMTC allocation authority has been awarded to exclusively homeownership-focused CDEs—almost 3% of the total $5 billion of NMTC authority for the 2023 round.

Building Wealth Through Homeownership

Community Housing Capital (CHC) was founded to facilitate the creation and preservation of affordable housing. Since 2022, the organization has deployed $55 million in NMTCs to fund eight projects across seven states.

Guided by their mission of providing equitable access to capital that is transformative for NeighborWorks America (NWA) organizations and the communities they serve, CHC has provided NMTC-supported loans to fund the production of 257 homes to date in low-income communities.

Most recently in March 2024, CHC deployed $25 million to four NWA organizations to fund:

• Comité de Bien Estar’s 30 townhome project in San Luis, Arizona,
• Corporation to Develop Communities of Tampa’s 12 townhome project in Florida,
• Intend Indiana’s Affordable HomeMatters’ 22 single-family home project across neighborhoods in Near Northwest Riverside and Far Eastside in Indianapolis, and
• Neighborhood Housing Services of Baltimore’s 22 single-family rowhome rehab project in West Baltimore, Maryland.

Homeownership is a key driver of economic development through construction jobs, state and local taxes and fees, and providing homes for the workforce. It provides families with long-term financial stability and a pathway to building intergenerational wealth. Homeownership has a cascading effect that strengthens neighborhoods, encourages local investment and businesses, and improves educational and health outcomes for homebuyers and their children.

Incentivizing Investment in Low-Income Communities

In the 20 rounds to date since 2003, the CDFI Fund has made 1,667 allocation awards totaling $81 billion in tax credit authority. For every $1 of federal investment, the NMTC program has generated $8 of private investment.

● View the Award Book and learn key facts and statistics about the allocates
● Search the Award Database for profiles of individual allocates
● Explore the States Served Map for the service areas of recent allocates

Of the $5 billion awarded for the 2023 allocation round, $135 million (2.7%) was awarded to Community Development Entities (CDEs) exclusively focused on developing affordable for-sale homes. These investments provide affordable pathways to homeownership—a critical and dire need for long-term economic stability and to build intergenerational wealth. Each home built helps to decrease the critical shortage of quality affordable housing stock in the U.S.

Seeking Permanency for the NMTC Program

The New Markets Tax Credit program was first authorized by Congress in 2000 to incentivize private investment in economically distressed communities by providing investors with a federal tax credit. It was initially authorized through 2007.

Despite its success and bipartisan support, the NMTC program is not a permanent part of the U.S. tax code. Since 2000, it has been extended eight times, with the most recent renewal in 2020 for five years. The current program authorization expires in 2025.

Smith NMTC supports making the NMTC program a permanent part of the national tax code to encourage greater investment in low-income communities and interest in its potential to help address the national housing crisis.

Creative Solutions for Innovative Financing

Smith NMTC Associates, LLC works with mission-driven organizations throughout the country to develop creative financial models and structures for projects that bring affordable homeownership and community facilities and services to low-income communities and their residents.

Smith NMTC has deployed over $770M in New Markets Tax Credit allocation, providing funding for 160+ projects, and managing compliance and providing a recapture guaranty for over 140 nonprofit developers. In 2008, Smith NMTC pioneered the first NMTC model to support affordable homeownership and deployed $25 million in NMTC funding to five nonprofit developers in the Gulf Opportunity Zone (GO Zone) after Hurricane Katrina. Since then, the company has deployed more than $620M to 141 homeownership projects, in collaboration with 23 CDEs, resulting in 5,500 homes in low-income communities across 32 states and the District of Columbia.

In addition to its work to expand affordable homeownership opportunities, Smith NMTC has also worked with 14 nonprofit organizations and 13 CDEs across four states to deploy $154.6M in NMTC allocation to support impactful community service projects like early childhood education centers, youth camps, nonprofit organization headquarters, community facilities, and hunger relief organizations. Get in touch…