Members of NH&RA’s New Markets Steering Committee participated on a recent conference call held by the Community Development Financial Institutions Fund on data collection for the new markets tax credit program. Part of the discussion was about how to define a multiple-building project and who should report data on these kinds of projects.
Meanwhile, the NMTC Steering Committee achieved an important victory in newly updated guidance for the 2010 NMTC program released by the CDFI Fund. Revisions reflected in the new Q&A document changes the timing of the related party test.
This clarification will have major implications as to how NMTC transactions are structured, and should enable community development entities to structure their NMTC investments as equity. The prior interpretation of the related party test forced most allocatees to structure their investments as debt. Many low-income community businesses can benefit more from increased equity capital than from greater debt, especially when NMTCs are paired with other incentives such as historic rehabilitation and energy tax credits.
The New Markets Steering Committee will meet May 21 at NH&RA’s Spring Policy Forum conference.