Foley’s New Markets Tax Credit (NMTC) team attended the recent Cohn Reznick NMTC Summit in Miami, where community development entities (CDEs), investors, project sponsors, advisors, and other industry participants discussed the current state of the NMTC market and the program’s future direction.
A consistent theme across the summit was that the NMTC industry has entered a new phase. With permanent authorization now in place, the conversation has shifted from preserving the program’s existence to improving how it operates, where it reaches, and how it can continue to evolve in response to market and policy priorities.
Here are the key themes we heard across the summit.
1. Permanence has changed the conversation, but not the need for advocacy
The most significant backdrop to this year’s discussions was the NMTC Program’s permanent authorization. For years, much of the industry’s advocacy was centered on securing permanence. That objective has now been achieved through the passage of the “One Big Beautiful Bill” last summer, and stakeholders are increasingly focused on what permanence should mean in practical terms.
Across sessions, we heard a common refrain: permanence is not the end of the work. Instead, the industry’s attention is now shifting toward protecting the credit, enhancing its effectiveness, and positioning it for long-term growth. Participants emphasized the importance of continued engagement with Treasury and the CDFI Fund, including staffing, administration, and implementation, to ensure the program remains stable and responsive.
In other words, the policy goal is no longer simply to preserve the NMTC Program. It is now to preserve it and improve it.
2. Predictability in the allocation process remains a major issue
Although permanence gives the market a stronger long-term foundation, many summit participants observed that the allocation process still lacks the kind of predictability that would allow for more efficient planning and execution.
We heard significant discussion about the market’s desire for a more regular and transparent allocation schedule. Even with the program now permanent, sponsors and borrowers still face timing challenges when they cannot reliably predict when an application round will open, how long the application period will last, or when awards will be announced. That uncertainty can be particularly difficult for projects with immediate financing needs.
This issue is also tied to market participation. Several attendees noted that a more predictable process could encourage broader participation by investors, CDEs and project sponsors alike. By contrast, when transaction timing remains uncertain, CDEs often prioritize execution speed, and that can make it more difficult to bring in new direct investors or pursue more complicated transactions.
At the summit, views varied as to when the next application round may be released. Estimates ranged from June to late summer or early fall, and there was similarly wide variation in expectations regarding the length of the application window.
3. The market continues to wrestle with how to serve smaller, rural, and tribal projects
Another major theme we heard was the continuing challenge of directing NMTC subsidy to smaller projects and to communities that may be harder to serve under current market structures, particularly rural communities and Native communities that are being prioritized by the current administration.
Many participants acknowledged that these projects are often among the most impactful from a community development perspective, but they can also be the most difficult to finance using NMTCs. Transaction costs, structuring complexity, limited local capacity, and timing constraints all make these deals harder to bring to closing. By contrast, larger transactions are often more efficient and easier to execute.
At the same time, the summit reflected a strong view that the NMTC market should continue working to reach these communities more effectively. In rural development discussions in particular, many participants emphasized that community impact should not be evaluated solely through traditional job metrics. In many communities, projects such as health care facilities, utilities and broadband projects, childcare centers, convenience stores, and other essential service businesses may provide substantial local benefit even if they do not fit a traditional large-scale economic development model or generate headline job numbers. At the same time, in our conversations with project sponsors and consultants, we also heard a more practical market reality: many CDEs continue to focus on projects with strong, easy-to-quantify job creation metrics, in part because those transactions can present clearer narratives and more readily measurable outcomes for CDFI Fund purposes. We also heard calls for structural improvements that could make the program more accessible in these settings, including additional administrative resources, greater standardization in transaction documents, and more tailored geographic eligibility rules for rural areas where census tract-wide metrics may not fully capture localized need.
4. CDEs are balancing flexibility with the realities of the application and scoring process
The NMTC Program has long been valued for its flexibility, and summit participants repeatedly noted that flexibility remains one of the program’s key strengths. At the same time, we heard recurring discussion about a practical tension within the allocation process: CDEs may be encouraged to respond to evolving community needs and policy priorities, but they are still evaluated in part based on demonstrated experience and track record.
That dynamic can make innovation difficult. CDEs may see opportunities in newer or emerging asset classes, or in policy areas receiving increased attention, but may be reluctant to move too far beyond their existing focus areas if doing so could affect future competitiveness in the application process. As several participants framed it, the challenge is to diversify and evolve without losing strategic clarity or undermining the consistency of a CDE’s platform.
This tension was particularly relevant in discussions involving for-sale housing and other uses that may be receiving increased policy attention. While some market participants are exploring those areas, there was broad recognition that not every CDE is positioned to pivot quickly, and the application framework may not always reward that kind of transition in the near term.
5. Certain sectors continue to attract significant interest, particularly in rural markets
Across sessions and side conversations, several project types consistently emerged as areas of continued market focus.
Rural manufacturing remains a significant priority, as do health care projects, including federally qualified health centers and critical access hospitals. Infrastructure, utilities, broadband, water, electric projects, and other essential community facilities were also frequently identified as strong candidates for NMTC financing, especially in underserved rural markets.
A related practical takeaway from the rural-focused discussions was that transaction readiness matters. Because CDEs remain focused on efficient deployment and timely closings, project sponsors and their counsel may benefit from beginning diligence and organizational work streams early so that projects are well positioned when financing opportunities arise.
Looking ahead
The central message we took away from this year’s summit is that the NMTC market is now operating in a post-permanence environment, but one that still presents meaningful practical and policy questions.
The themes we heard in Miami were less about whether the program will continue and more about how it can function more effectively: with a more predictable allocation timeline, stronger administrative support, better access for smaller and rural projects, and continued flexibility to meet changing community needs.
For CDEs, investors, and project sponsors alike, that shift presents both opportunities and challenges. The Foley NMTC Team will continue monitoring developments in the NMTC market, including allocation timing, policy changes, and transaction trends affecting community development financing.
