Laurie Schoeman, Chief Investment and Impact Officer Partners for the Common Good
In late December of 2025, my organization, Partners for the Common Good, received an allocation of 65 million federal New Market Tax Credits (NMTC). Not only was this award a great holiday present, it also came with an increased sense of certainty that will enable the broader NMTC program to work more effectively in the future.
This award was part of a larger U.S. Department of Treasury accouncement that allocated a record $10 billion in New Markets Tax Credits - the largest single issuance in the program’s history. For community development practitioners, affordable housing advocates, health care providers, educators, and the low-income communities they serve, these awards were more than a budget line. They were a lifeline, arriving at a moment when other federal funding streams continue to be under severe and sustained threat.
The New Markets Tax Credit program stands as proof that market-based mechanisms can move serious capital into places that markets would otherwise abandon. The $10 billion awarded in December 2025 will finance hospitals and health clinics, schools, community facilities and affordable housing and job-creating businesses1, in communities across every region of the country. It will do so not because investors were charitable, but because the NMTC program made it a rational business decision to make.
A Program Born from Persistent Disinvestment
The New Markets Tax Credit program was created by Congress in December 2000, designed to address a chronic and well-documented problem: low-income communities - urban, rural, and tribal alike - are systematically bypassed by private capital markets. Vacant storefronts, crumbling health clinics, outdated schools, and absent grocery stores are not accidents of geography. They are the predictable results of decades of market failure and public disinvestment.
The NMTC program was built on a deceptively simple premise: give investors a compelling reason to put money into places they would otherwise ignore. In exchange for making equity investments in certified Community Development Entities (CDEs) - financial intermediaries that channel capital into distressed communities - investors receive a federal tax credit equal to 39% of their investment, claimed over a seven-year period. CDEs, in turn, deploy that capital as below-market loans and equity investments into businesses, housing projects, health facilities, schools, and community centers in qualifying low-income census tracts.
For every dollar the federal government effectively “spends” through foregone tax revenue, significantly more private capital flows into underserved communities. Historically, NMTC awards have generated approximately $8 of private investment for every $1 of federal investment2 - a multiplier that few public programs can match. A project with $10 million in eligible costs may generate up to $2.5 million in subsidized capital through an NMTC structure, dramatically reducing the need for conventional debt and equity financing that these projects typically cannot access.
Two Decades of Proven Results
In the 25 years since its inception, the NMTC program has quietly accumulated a remarkable record. Through its first twenty allocation rounds, the CDFI Fund made 1,667 awards totaling $81 billion in tax credit allocation authority. Across that history, the program has helped generate more than $143 billion in total development financing, supported more than 8,900 businesses nationwide, and contributed to the creation or retention of more than 888,000 jobs.
But numbers alone do not capture what the program has actually built. The NMTC has financed health clinics that now serve tens of thousands of patients annually in communities where the nearest hospital was an unaffordable distance away. It has funded charter schools in neighborhoods where quality education was a privilege of zip code. It has backed community food systems in areas classified as food deserts, manufacturing facilities that restored economic growth in postindustrial towns, and mixed-use developments that revived declining neighborhoods and commercial corridors.
The breadth of eligible project types - housing, health, education, childcare, retail, energy, manufacturing, food systems is a recognition that community resilience requires comprehensive investment across every dimension of daily life.
Demand for the program has consistently and substantially outpaced supply. Throughout its history, applications for NMTC allocation authority have exceeded available credits by a ratio of six to one, with fewer than one in four applicants receiving awards in any given round. This persistent oversubscription demonstrates the structural gap between the demand for patient, flexible capital that community financing needs and what the conventional market is able to finance on its own.
A Historic Allocation and the Value of Certainty
The December 2025 award was a combined two-year round covering calendar years 2024 and 2025, with 142 Community Development Entities across 41 states, Washington D.C., and Puerto Rico receiving allocation authority. The round reflected a deliberate geographic breadth: 24.2% of the total will flow to rural communities, 26.8% to smaller urban areas, and 47% to major urban centers. Notably, $236 million was specifically committed to tribal areas.
The sheer scale of the most recent funding round reflects a meaningful and structural shift that was made possible when the NMTC program was made permanent under the One Big Beautiful Bill Act. For the first time in its history, the program will no longer face the uncertainty of periodic reauthorization fights, and communities, investors, and project developers will be able to act with a degree of long-term confidence that has never existed before. This permanence removes uncertainty and creates a stable foundation upon which the private sector can build upon with confidence.
A Beacon of Hope During a Time of Shrinking Federal Support
The timing of this historic allocation must be understood in its full context. Across the federal landscape, the funding programs that have long served as the foundation of community development finance are under unprecedented pressure. The Administration’s FY2026 budget proposed the outright elimination of the Community Development Block Grant (CDBG), a $3.3 billion program that has supported infrastructure, housing, and economic development in communities across the country since 1974. The HOME Investment Partnerships Program, which finances affordable housing development and preservation, faced elimination as well. The proposed budget also included over $290 million in cuts to the CDFI Fund itself. While Congress has pushed back on some of the most severe proposals, the uncertainty has been profoundly destabilizing for organizations that have built their work on the assumption of continued federal partnership.
Against this backdrop, the NMTC program’s permanence and its record $10 billion allocation represent something more than good news. They represent a viable anchor for the community development sector at a moment when other anchors are being pulled. The program does not operate through direct federal grants - it functions through the tax code, deploying private capital at scale in ways that are structurally more resilient to the annual appropriations battles that are consuming so many other programs.
This distinction matters enormously for practitioners. A nonprofit building a community health center in a rural county, a CDFI financing a mixed-income housing development in a former industrial city, a tribal economic development organization creating jobs on a reservation - all face the same fundamental challenge: a gap between what their projects cost and what conventional markets will finance. The NMTC program does not replace grants. But it fills a critical layer of the capital stack that no other federal tool addresses as efficiently or at as large a scale.
A Force Multiplier for Community Development
For organizations navigating this new landscape, the most important insight about the NMTC program is not what it does in isolation - it is what it enables in combination. The credit is specifically designed to be layered with other public subsidies and private financing. It can be paired with the federal Low-Income Housing Tax Credit (LIHTC) for housing projects, with historic rehabilitation tax credits for adaptive reuse projects, with state and local tax incentives, with philanthropic capital, and with conventional debt. The NMTC does not demand exclusivity - it rewards inclusivity.
A community health center that cannot qualify for a conventional construction loan at viable rates can use NMTC financing to reduce its effective cost of capital by 15 to 25 percent, making the project financially feasible. A community college in a rural area building a workforce training facility can layer NMTC with state economic development incentives and federal education grants to close a financing gap that would otherwise kill the project. A nonprofit housing developer can use NMTC-enhanced financing for the commercial and community facility components of a mixed-use development, freeing other capital for the affordable residential units.
This leverage potential is the program’s most underutilized feature, particularly among smaller organizations and communities that lack dedicated capacity to navigate complex tax credit transactions. The Community Development Entity network - now operating across 41 states with fresh allocation authority - is the access point. Organizations that have not yet established relationships with CDEs serving their markets should prioritize doing so now, particularly as the upcoming CY2026 allocation round approaches and CDEs are actively identifying pipeline projects.
The Road Ahead
The NMTC program is not a silver bullet. It cannot replace the grant funding or subsidy that the most vulnerable communities depend on for operating capacity, social services, and direct housing assistance. A tax credit that requires sophisticated investors and complex legal structures to execute is not inherently accessible to the smallest or most resource-constrained organizations without technical support.
For community developers, CDFIs, mission-driven lenders, nonprofit developers, and the communities they serve, the work now is to ensure that capital reaches its destination and invested in buildings that change lives. The allocation has been made. The clock is running. The communities are waiting.
Laurie Schoeman is the Chief Investment and Impact Officer at Partners for the Common Good. A highly respected leader with deep expertise in housing policy, finance, and climate resilience, Laurie previously served as a Senior White House Policy Advisor and held leadership roles at Enterprise Community Investment and Enterprise Community Partners.
