HOPE Weighs in on Changes to NMTC Transaction Level Report
April 28th, 2023
By Courtney Thomas, Senior Policy Analyst
Early February, the CDFI Fund released proposed changes to the New Market Tax Credit Transaction Level Report (TLR). This report collects crucial data that ensures that CDFIS are equitably deploying capital through the New Market Tax Credit Program to serve historically marginalized communities.
The New Market Tax Credit program was launched in 2002 to drive private capital into underserved neighborhoods. Since its inauguration, HOPE has been allocated over 190 million dollars, which have funded 90 community development projects across the Deep South. These projects have included businesses, community facilities, hospitals, Historically Black Colleges and Universities and nonprofit organizations, all of which have advanced racial equity, improved lives, or fostered economic growth in persistent poverty communities. HOPE finances projects in areas with the greatest need for the greatest impact, which have created more than 3,700 jobs in the states of Alabama, Arkansas, Louisiana, Mississippi and Tennessee.
HOPE submitted a public comment in support of the changes to the TLR, which emphasized the points below:
The proposed changes will update and create new data points to acquire additional information related to upfront, ongoing, and back-end fees & developers costs. The CDFI Fund will require that program participants report actual dollar amounts instead of using the former point system. By quantifying costs with the revised data points, the CDFI Fund will be in a better position to identify and prioritize the most impactful investments and the allocations to Community Development Entities that bring the projects to fruition.
Changes to the report include metrics that prioritize race, gender, job quality, and the other long-term project impacts. These additional data points will effectively measure the effects of NMTC projects and ensure they are meeting the needs of underserved areas and communities of color.
Data Collection Process
The new proposed changes are not overly burdensome to CDFIs and can be used to further equitable community development goals. The CDFI Fund should use these data to hold developers accountable for the projects they finance. Additional suggestions included:
- Streamline the data collection process by creating standard Community Benefit Agreement & Intake Forms
- Use the data to inform future funding decisions by prioritizing applicants with a track record of community-minded projects with lower fees and higher social returns.
The updated data points represent positive efforts to ensure that the New Market Tax Credit Program meets its Congressional intent by prioritizing the needs of low-income communities. You can read
HOPE’s full comment here.