The U.S. Department of the Treasury is opening a new $5 billion round of a federal tax-credit program designed to attract private investment into economically distressed communities.
Treasury’s Community Development Financial Institutions Fund announced the Calendar Year 2026 round of the New Markets Tax Credit Program in a Federal Register notice published September 15.
Organizations seeking an allocation face several deadlines, including a November 10, 2026, deadline for the full application.
The $5 Billion Isn’t a Pool of Direct Grants
The New Markets Tax Credit Program works differently from a traditional federal grant program.
Through the New Markets Tax Credit Program, the CDFI Fund gives certified Community Development Entities, or CDEs, authority to offer federal tax credits to investors who make qualifying equity investments.
Those CDEs then use the investment capital to finance eligible businesses and projects in low-income communities.
The federal tax credit totals 39% of the original qualified investment and is claimed over seven years. Investors generally claim 5% in each of the first three years and 6% in each of the following four years.
That means the newly announced $5 billion represents the amount of equity investment authority for which New Markets Tax Credits may ultimately be claimed—not $5 billion that Treasury will distribute directly to businesses or communities as grants.
The Program Has Financed Businesses and Community Projects
Congress created the New Markets Tax Credit Program in 2000 to encourage investment in communities that historically have had difficulty attracting private capital.
According to the CDFI Fund’s program overview, eligible investments have helped finance businesses and projects serving distressed communities.
The CDFI Fund says that through fiscal year 2023, the program generated about $8 in private investment for every $1 of federal funding and supported the construction or rehabilitation of more than 268 million square feet of commercial real estate.
Projects financed through the program can include operating businesses as well as facilities and services serving low-income communities.
The program does not mean that every business located in a low-income area automatically qualifies for a tax credit. Investments must flow through qualified Community Development Entities and meet detailed federal requirements.
Treasury Has $5 Billion Available for the 2026 Round
The Federal Register notice for the 2026 allocation round makes $5 billion in New Markets Tax Credit allocation authority available.
The CDFI Fund anticipates awarding individual allocatees up to $100 million in tax-credit investment authority.
However, that isn’t an absolute cap or a guaranteed award amount.
The agency says it may award more or less than $100 million when it determines doing so is appropriate, and it retains discretion to make allocations to any, all, or none of the organizations that apply.
Awards are therefore competitive rather than automatic.
Congress Made the $5 Billion Annual Program Permanent
The 2026 round follows a significant change to the future of the program.
The New Markets Tax Credit had previously been extended by Congress for limited periods, creating uncertainty about whether the program would continue after its existing authorization expired.
The One Big Beautiful Bill Act of 2025 permanently extended the New Markets Tax Credit and provided $5 billion in annual allocation authority beginning in 2026.
That means the current $5 billion round isn’t simply another short-term extension of the program.
The CDFI Fund’s 2026 notice cites the 2025 law as the authority for the $5 billion available in this year’s allocation round.
Applicants Face Several Deadlines
Organizations interested in the 2026 allocation can’t wait until November to begin the process.
The CDFI Fund has established several critical deadlines:
- September 22, 2026, at 11:59 p.m. ET: CDE certification applications and certain certification/service-area requests
- October 6, 2026, at 5 p.m. ET: Allocation Application Registration
- November 3, 2026, at 11:59 p.m. ET: Certain allocation-agreement amendment requests
- November 6, 2026, at 5 p.m. ET: Last day to contact CDFI Fund staff with application questions
- November 10, 2026, at 5 p.m. ET: Full CY 2026 Allocation Application and required attachments
Applications and related submissions are handled electronically through the CDFI Fund’s Awards Management Information System, or AMIS.
Importantly, an organization that fails to complete the required application registration by October 6 won’t be able to subsequently submit a 2026 allocation application.
Certification Rules Also Changed for This Round
Treasury highlighted two notable program changes for the 2026 round.
First, prior New Markets Tax Credit allocatees face revised minimum requirements involving the issuance of Qualified Equity Investments and the closing of Qualified Low-Income Community Investments tied to earlier allocations.
Second, applicants must meet new timing requirements involving CDE certification.
To be considered for a 2026 allocation, an applicant generally must either already be certified as a Community Development Entity as of the Federal Register publication date or submit its CDE certification application through AMIS by the September 22 deadline.
The CDFI Fund says it won’t provide allocation authority to applicants that ultimately aren’t certified as CDEs.
Some Prior Allocatees Face January 2027 Deadlines
The application deadline isn’t the only date organizations participating in the program need to watch.
Certain prior allocatees subject to Qualified Equity Investment issuance and Qualified Low-Income Community Investment requirements have until January 7, 2027, at 11:59 p.m. ET to meet the applicable thresholds.
The deadline to report those QEIs and certify the required QLICIs through AMIS is January 14, 2027, at 11:59 p.m. ET.
Those deadlines are particularly relevant to organizations with earlier New Markets Tax Credit allocations because satisfying prior-round requirements can affect eligibility in the new competition.
Organizations considering an application should review the complete CDFI Fund New Markets Tax Credit application materials rather than relying only on the headline November deadline.
With $5 billion in new allocation authority available and the program now permanently extended, the 2026 round represents the beginning of a new phase for a tax incentive that has been directing private investment toward low-income communities for more than two decades.
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Amanda Blankenship is the Chief Editor for District Media. With a BA in journalism from Wingate University, she frequently writes for a handful of websites and loves to share her own personal finance story with others. When she isn’t typing away at her desk, she enjoys spending time with her daughter, son, husband, and dog. During her free time, you’re likely to find her with her nose in a book, hiking, or playing RPG video games.