CDFIs: Essential for Tax Credit Financing Projects

CDFIs help shepherd tax credit projects – such as those supported by the New Markets Tax Credit (NMTC) and Low-Income Housing Tax Credit (LIHTC) – by providing critical financing, structuring expertise, and project oversight that help complex developments move from concept to completion. As mission-driven lenders and investors, CDFIs often serve as intermediaries, developers, or financing partners that assemble capital stacks, manage compliance requirements, and coordinate among investors, community stakeholders, and public agencies. Their participation helps reduce financing gaps, attract private investment, and ensure projects meet program goals, such as expanding economic opportunity in underserved communities or increasing the supply of affordable housing.

Through NMTC projects, CDFIs finance commercial, community facility, and economic development initiatives in low-income areas, while LIHTC projects enable the development and preservation of affordable rental housing. CDFIs bring specialized knowledge of these programs, provide flexible capital, and help navigate regulatory processes, ensuring projects remain financially viable and aligned with community needs. By guiding tax credit investments and supporting long-term project success, CDFIs help deliver essential community infrastructure, create jobs, and expand access to safe, affordable housing.

Annual Impact: CDFIs help shepherd or finance over 400 NMTC and LIHTC projects each year.