2024-27029. Community Development Financial Institutions Fund

Table 1—CY 2024-2025 Allocation Round NMTC Program Critical Deadlines for Applicants

Description	Deadline/date	Time (eastern time—ET)	Submission method
Request to modify CDE certification service area	December 3, 2024	11:59 p.m	Electronically via AMIS.
Subsidiary CDE Certification Application for meeting Qualified Equity Investment (QEI) issuance thresholds	December 3, 2024	11:59 p.m	Electronically via AMIS.
CY 2024-2025 Allocation Application Registration	December 5, 2024	5:00 p.m	Electronically via AMIS.
Amendment request to add Subsidiary CDEs to Allocation Agreements for meeting QEI issuance thresholds	January 17, 2025	11:59 p.m	Electronically via AMIS.
Amendment request to remove a Controlling Entity from Allocation Agreement(s)	January 17, 2025	11:59 p.m	Electronically via AMIS.
Last date to contact CDFI Fund staff	January 27, 2025	5:00 p.m	Electronically via AMIS.
CY 2024-2025 Allocation Application (including required Attachments)	January 29, 2025	5:00 p.m	Electronically via AMIS.
QEI Issuance and making Qualified Low Income Community Investments (QLICIs) by	April 17, 2025	11:59 p.m	Not Applicable.
Report QEIs and certify QLICIs by	April 24, 2025	11:59 p.m	Electronically via AMIS.

Executive Summary: This NOAA is issued in connection with the CY 2024-2025 allocation round (Allocation Round) of the New Markets Tax Credit Program (NMTC Program), as authorized by Title I, subtitle C, section 121 of the Community Renewal Tax Relief Act of 2000 (Pub. L. 106-554) as amended. Through the NMTC Program, the Community Development Financial Institutions Fund (CDFI Fund) provides authority to certified CDEs to offer an incentive to investors in the form of tax credits over seven years, which is expected to stimulate the provision of private investment capital that, in turn, will facilitate economic and community development in Low-Income Communities. Through this NOAA, the CDFI Fund announces the availability of $10 billion of NMTC Allocation authority in this Allocation Round.

In this NOAA, the CDFI Fund specifically addresses how a CDE may apply to receive an allocation of NMTCs, the competitive procedure through which NMTC Allocations will be made, and the actions that will be taken to ensure that proper allocations are made to appropriate entities. ( print page 92284)

I. Allocation Availability Description

A. Programmatic changes from the CY 2023 allocation round:

1. Allocation Application Updates: The NMTC Allocation Application has been revised as part of its renewal under the Paperwork Reduction Act. The Allocation Application will be evaluated as described in Section V of this NOAA.

2. Prior QEI Issuance Requirements: Prior-year NMTC Allocatees will be subject to minimum thresholds for QEI issuance and closing of QLICIs with respect to their prior-year NMTC Allocations. These thresholds and deadlines have been revised in comparison to the CY 2023 NOAA. See Section III. A.5(a) of this NOAA for additional details.

3. CDE Certification: The CDFI Fund will only consider an Applicant as eligible for an NMTC Allocation in this Allocation Round if the Applicant is certified as a CDE as of the publication date of this NOAA in the Federal Register .

II. Allocation Information

A. Allocation amounts: Pursuant to the Taxpayer Certainty and Disaster Tax Relief Act of 2020, the CDFI Fund expects that it may allocate to CDEs the authority to issue to their investors the aggregate amount of $10 billion in equity as to which NMTCs may be claimed, as permitted under IRC § 45D(f)(1)(D). Pursuant to this NOAA, the CDFI Fund anticipates that it may issue up to $120 million in tax credit investment authority per Allocatee. The CDFI Fund, in its sole discretion, reserves the right to allocate amounts in excess of or less than the anticipated maximum allocation amount should the CDFI Fund deem it appropriate. The CDFI Fund reserves the right to allocate NMTC authority to any, all, or none of the entities that submit Applications in response to this NOAA, and in any amounts it deems appropriate.

B. Type of award: NMTC Program awards are made in the form of allocations of tax credit investment authority.

C. Program guidance and regulations: This NOAA describes Application and NMTC Allocation requirements for the CY 2024-2025 Allocation Round of the NMTC Program and should be read in conjunction with: (i) the final NMTC Program Income Tax Regulations issued by the Internal Revenue Service (IRS) (26 CFR 1.45D-1, published on December 28, 2004), as amended and related guidance, notices and other publications (collectively referred to as the “IRS NMTC Regulations” in this NOAA); and (ii) the Application and related materials for this Allocation Round. All such materials may be found on the CDFI Fund's website at https://www.cdfifund.gov. The CDFI Fund requires Applicants to review these documents. Capitalized terms used, but not defined, in this NOAA have the respective meanings assigned to them in the NMTC Program Allocation Application, Internal Revenue Code (IRC) § 45D or the IRS NMTC regulations. In the event of any inconsistency between this NOAA, the CY 2024-2025 Allocation Application (Application), and guidance issued by the CDFI Fund thereto, and IRC § 45D or the IRS NMTC Regulations, the provisions of IRC § 45D and the IRS NMTC Regulations shall govern.

D. Allocation Agreement: Each Allocatee must sign an Allocation Agreement, which must be countersigned by the CDFI Fund, before the NMTC Allocation is effective. The Allocation Agreement contains the terms and conditions of the NMTC Allocation. For further information, see Section VI.B of this NOAA.

E. Statutory and national policy requirements: The CDFI Fund will manage and administer the NMTC Program in a manner so as to ensure that NMTC Allocations associated programs are implemented in full accordance with the U.S. Constitution, Federal law, statutory, and public policy requirements: including, but not limited to, those protecting free speech; religious liberty; public welfare; the environment; and prohibiting discrimination.

III. Eligibility

A. Eligible Applicants: IRC § 45D specifies certain eligibility requirements that each Applicant must meet to be eligible to apply for an allocation of NMTCs. The following sets forth additional detail and certain additional dates that relate to the submission of Applications under this NOAA for the available NMTC Allocation authority.

1. CDE certification: For purposes of this NOAA, the CDFI Fund will only consider an Applicant as eligible for an NMTC Allocation in this round if the Applicant is certified as a CDE as of the Federal Register publication date of the NOAA. The CDFI Fund will not provide NMTC Allocation authority to Applicants that are not certified as CDEs or to entities that are certified as Subsidiary CDEs.

2. Modifying CDE Service Area: If an Applicant currently certified as a CDE wishes to change its designated CDE Service Area for this Allocation Round, then it must submit a CDE Service Area Amendment Application to request such a change from the CDFI Fund, and the CDE Service Area Amendment Application must be received by the CDFI Fund by the deadline listed in Table 1. A request to change a CDE's Service Area will need to include the revised service area designation and updated accountability information that demonstrates that the CDE has the required representation from Low-Income Communities in the revised CDE Service Area.

3. Repayment or Refinancing of QEI with QLICI Proceeds: An Applicant must commit that it will not permit the use of the proceeds of QEIs to make QLICIs in Qualified Active Low-Income Community Businesses (QALICBs) where QLICI proceeds are used, in whole or in part, to repay or refinance a debt or equity provider whose capital was used to fund the QEI, or are used to repay or refinance any Affiliate of such a debt or equity provider, except where: (i) the QLICI proceeds are used to repay or refinance documented reasonable expenditures that are directly attributable to the qualified business of the QALICB, and such reasonable expenditures were incurred no more than 24 months prior to the QLICI closing date; or (ii) no more than five percent of the total QLICI proceeds from the QEI are used to repay or refinance documented reasonable expenditures that are directly attributable to the qualified business of the QALICB. Refinance includes transferring cash or property, directly or indirectly, to the debt or equity provider or an Affiliate of the debt or equity provider.

4. Do Not Pay: The CDFI Fund will contact the Do Not Pay Business Center to ensure that an Applicant, its Controlling Entity, and any Affiliate(s) are not prohibited from receiving Federal funds. An Applicant, its Controlling Entity, and any Affiliate(s) reported by the Do Not Pay Business Center as having a pending or delinquent debt to the Federal government will be required to demonstrate that it has resolved such pending or delinquent debt. Applicants that fail to demonstrate resolution of such pending or delinquent debt to the Federal government will be found ineligible to receive an allocation.

5. Controlling Entities: An organization that was a Controlling Entity to an Allocatee in a prior round(s) and subsequently separated from that Allocatee as a result of an amendment to the Allocation Agreement(s), may not claim the NMTC-related track record of such Allocatee. ( print page 92285)

6. Prior award recipients or Allocatees: Applicants must be aware that success in a prior Application or allocation round of any of the CDFI Fund's programs is not indicative of success under this NOAA. For purposes of this NOAA, and eligibility determinations, the CDFI Fund will consider an Affiliate to be any entity that meets the definition of Affiliate as defined in the NMTC Allocation Application materials, or any entity otherwise identified as an Affiliate by the Applicant in its NMTC Allocation Application materials.

Prior award recipients of any CDFI Fund program are eligible to apply under this NOAA, except as follows:

(a) Prior Allocatees and Qualified Equity Investment (QEI) issuance and Qualified Low Income Community Investment (QLICI) requirements: CDEs that are Allocatees under the CY 2019 to the CY 2023 rounds must finalize at least the percentage of QEIs noted in Table 2 for each NMTC Allocation round and use at least the percentage of those QEIs designated in Schedule 1, section 3.2(j) of their Allocation Agreements to make QLICIs by the deadline in Table 1. CDEs that are Allocatees under the CY 2019 to the CY 2023 allocation rounds and CDEs that are Allocatees designated as Rural CDEs in their CY 2022 and CY 2023 Allocation Agreement must meet the thresholds outlined in Table 2.

Table 2—QEI Issuance and QLICI Requirements

Prior round allocation	Finalized QEI requirement (%)	Rural CDE finalized QEI requirement (%)	QLICIs
CY 2019	100	100	As stated in Schedule 1, Section 3.2(j) of the applicable Allocation Agreement.
CY 2020	90	90
CY 2021	80	80
CY 2022	60	50
CY 2023	10	0