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.

The Housing Partnership Network, Inc. (HPN), a Community Development Entity (CDE) partner of Smith NMTC, has received a $60 million NMTC allocation—its largest award to date!—that will support investments in affordable homeownership projects.

“We are a proud partner of The Housing Partnership Network, Inc.,” shares Howard Smith, Smith NMTC Co-Founder and Principal.

“This allocation will help HPN continue to support their prolific nonprofit housing and community development organizations through flexible and accessible capital products and multiple other programs to create accessible homes and transform communities. Deploying $60 million in NMTC allocation to affordable homeownership projects in underserved communities across the U.S. will enable HPN to lean into its commitments to alleviate the national housing shortage and reduce the racial wealth gap, while creating construction jobs and bringing tax dollars and fees to cities and towns across the country—homeownership transforms families and communities.”

Both CDEs managed by Smith NMTC, HPN and Community Housing Capital 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.

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.

Housing for All

The Housing Partnership Network (HPN)—an award-winning business collaborative of 100+ of the nation’s leading housing and community development organizations—utilizes the NMTC program to provide development subsidy to its member organizations who are building and rehabbing diverse housing for sale in areas of economic distress. Since 2017, the organization has deployed $165 million in NMTCs to fund 25 projects across 13 states.

As an extension of its work as a nonprofit CDFI, HPN facilitates peer-to-peer learning and promotes policy and practice that is based on the proven experience of some of the nation’s most successful nonprofits. Through its unique networked approach, organizations and leaders accelerate and scale innovation to more rapidly respond to changing market challenges and opportunities. Together, HPN addresses local needs with solutions rooted in community expertise.

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…