Useful Stats: New Market Tax Credits Investment by State, FY03-11

Between FY03-11, the U.S. Department of Treasury's Community Development Finance Institutions (CDFI) Fund supported $26.4 billion in private investment through the New Market Tax Credits (NMTC) program, according to data released by the fund. The CDFI Fund helps economically distressed communities leverage private investment capital by offering investors a federal tax credit. During its first nine years, participating Community Development Entities (CDE) leveraged their NMTC allocations to invest in 3,499 projects related to real estate, business development, microenterprise finance and other purposes in mostly low-income communities.

In order to participate in the NMTC program, a qualified investor must be certified as a CDE by the CDFI Fund. The fund then awards an allocation of tax credit authority for that CDE, which can be used to support Qualified Equity investments (QEI) in distressed communities. The CDE must then report information about its investments to the fund within six months after the end of the fiscal year. As of this year, the CDFI Fund has awarded allocations to 749 CDEs, totaling $36.5 billion in tax credit authority.

The current release is a compilation of data from the first nine years of CDFI Fund activity, detailing each transaction and project supported by the tax credits. CDFI has provided the names of the investing institutions, their state, the amount of each transaction, the total amount invested in each project, the type of project supported and whether that project took place in a metropolitan or non-metropolitan area.

As of 2011, CDEs had leveraged the credits to make $26.4 billion in qualified investments, including 3,499 projects and 6,812 total transactions (projects often involve multiple transactions). Most projects were related to real estate, providing construction or rehabilitation for commercial and residential purposes in low-income communities. Together, real estate projects accounted for $17.7 billion of qualified investments in 1,893 individual projects.

Approximately $8 billion in QEIs supported business financing, offering capital to low-income community businesses. A total of 1,472 business financing projects were reported by CDEs. Another $300,000 supported financing for microenterprises in 19 projects. CDEs reported $717.6 million was used to support other types of community financing.

Read the full CDFI Fund release...

SSTI has prepared a table of NMTC investments by state based on CDFI Fund data. The table breaks down these investments by dollars, number of transactions and type of project. View the table...

The breakdown by state illuminates how extensively the NMTC program has been used to benefit the Gulf Opportunity Zone in the aftermath of Hurricane Katrina. While Louisiana is not the leading state for CDE investments, the state ranks in the top three, along with California and New York. Missouri has also made extensive use of the program, ranking sixth among the states in total dollars.

California, Louisiana and Ohio topped the list of states for CDE investments in business financing, while only California and Oregon were documented as making use of the program to support microenterprise financing.