On December 23, 2025, the Treasury Department announced that it awarded about $10 billion in New Markets Tax Credit (NMTC) allocations to successful Community Development Entities (CDEs) from the 2024 and 2025 application rounds, which were combined. The $10 billion was awarded to 142 CDEs headquartered in 41 states, Puerto Rico and the District of Columbia.

The NMTC program, administered by Treasury's Community Development Financial Institutions (CDFI) Fund, was established in December 2000 by Congress. The program was designed to encourage investment in operating businesses and real estate projects in low-income communities. It allows individual and corporate investors to receive a tax credit against their federal income tax for making qualified equity investments in investment vehicles called CDEs. An investor's credit totals 39% of the investment in a CDE and is claimed over seven years. A CDE must use substantially all of the investment to make qualified investments in low-income communities. In the 21 rounds to date, the CDFI Fund allocated 1,809 awards totaling more than $81 billion in tax credit authority.

In the latest round, CDFI received a total of 216 applications, requesting a total of $19.2 billion. Of all the applicants, 142 CDEs received the $10 billion in allocations. The allocation award in this round ranged from $20 million to $95 million. About 85% of the amounts awarded went to loans to, or equity investments in, business; 15% went to loans to, or equity investments in, real estate.

Implications

First, congratulations are due to all 142 successful CDEs. Second, now that the award has been announced, CDEs will be spending some time further evaluating pipeline and potential projects. It is incumbent on taxpayers with projects that could benefit from a sub-allocation of NMTCs to reach out promptly to CDEs that received awards. The CDEs are expected to place a significant emphasis on projects that directly benefit low-income populations in economic distress.

Third, CDEs will now also be looking towards the application round for 2026. No timetable has been set, but historically the application round opens two to three months following the release of awards. Taxpayers and potential CDEs should start considering their options for the 2026 application, especially with the new focus areas that the CDFI Fund has when reviewing applications.