Because the NMTC can finance almost anything a community needs, the program continues to evolve as the communities face new challenges. The program also made significant efficiency gains as stakeholders gained experience with the regulatory regime. As more businesses, nonprofit trade associations, and community leaders gained familiarity with the program, competition for NMTC financing also increased.

In fact, every participant in the NMTC program faces stiff competition. Investors compete for projects, CDEs compete for allocation, and of course, hard-hit communities compete for increasingly scarce resources. As a result, the program has matured significantly over the past two decades. Experience, competition, and creativity have combined to test the limit of what can be accomplished in terms of community impact.


The most striking trend is the increasingly equitable distribution of NMTC allocation to every geographical area of the country. In 2011, the CDFI Fund began to provide additional consideration to applicants pledging to invest in states and geographic areas underserved thus far by the program. For example, only $47.8 million in allocation reached Nebraska’s low-income communities from 2003-2012. After the CDFI Fund gave consideration to applicants targeting Nebraska, and $213 million reached the state from 2013-2017. The chart below shows the number of zip codes receiving at least one NMTC investment to date.


Over the years, NMTC investments have shifted away from the Central Business Districts (CBDs) of large cities. While the CBDs of many smaller, severely distressed Main Street communities struggle with vacant buildings, poverty, and economic distress, the CBDs in large cities have fared well over the past two decades. Accordingly, urban NMTC projects shifted toward other, more highly distressed areas. Some CBDs are no longer eligible for the NMTC.

Our analysis of NMTC investments found a noticeable decline in the share of NMTC investments in CBDs. From 2001-2009, more about 12 percent of NMTC allocation was placed within one mile of a CBD. The share of projects in close proximity to CBDs declined significantly in recent years. From 2010 to 2019, just over 6 percent of projects were located within one mile of a CBD.


As discussed earlier, in 2004, Congress required non-metropolitan areas to receive a proportional share of allocation. The results, in the chart above, speak for themselves. The table below shows trends using the U.S. Department of Agriculture’s Rural-Urban Commuting Area codes.