The House and Senate have reached a $1.4 trillion spending agreement for Fiscal Year 2020, with a record-setting appropriation of $262 million for the CDFI Fund and an extension of the New Markets Tax Credit (NMTC) Program for one year with an increase in the allocation to $5 billion. The spending bill has passed the House and the Senate, and the President signed it into law on December 20, 2019.
The bill also provides $500 million in guarantee authority for the CDFI Bond Guarantee Program and creates two new programs within the CDFI Fund: a Small Dollar Loan Fund, which is funded at $5 million; and the Economic Mobility Corps, which is funded at $2 million and will be operated in conjunction with the Corporation for National and Community Service.
For the FY 2020 CDFI Financial Assistance program, ten percent of funds must be used for awards that support investments in “persistent poverty” counties (poverty levels of 20 percent over the past 30 years). In addition, the CDFI Fund is required to prioritize CDFI program awards to CDFIs lending and investing in “high poverty areas,” defined as census tracts where the poverty rate is over 20 percent. A breakdown of funding for each program area at the CDFI Fund is included below, with a comparison to FY 2019 and the President’s Budget Proposal.
The NMTC was set to expire at the end of December 2019. With this extension, the CDFI Fund will be able to open up a new round of NMTC applications for allocations next fall. The application period that closed in October 2019 was the last round of allocations available under the expiring authorization. Beyond the extension, the newly authorized round will increase available allocations from $3.5 billion to $5 billion, which is the first increase in the baseline (non-disaster response) allocation for the NMTC since 2007.
After the new year, Congress will begin the appropriations process for Fiscal Year 2021, which will begin on October 1, 2020. Stay tuned for additional information from OFN about the FY 2021 appropriations process, our continued push for permanency for the NMTC, and how you can support these advocacy efforts.