News & Events

A Case for NMTCs in US Territories

Annually, following the release of the New Markets Tax Credit (“NMTC”) Application, the Community Development Financial Institutions (“CDFI”) Fund identifies ten states, plus US territories, that have not received as much NMTC investment as the other 40, and classifies them as underserved.  While community development entities (“CDEs”) that invest in underserved states do not receive preferential treatment from the CDFI Fund, investments in underserved states are classified as “innovative.”[1] This year, the ten states are: Arkansas, Florida, Georgia, Idaho, Kansas, Nevada, Tennessee, Texas, West Virginia, and Wyoming.[2]  States come and go on this list as more or less NMTC investment is made into them, but one thing has remained constant: the lack of investment into the US territories of Puerto Rico, American Samoa, Guam, Northern Marianna Islands and the U.S. Virgin Islands (the “Territories”).

Those of us familiar with the NMTC Program know how increasingly difficult it has become to find an allocation of credits for a project in most places in the United States, but the numbers for projects seeking allocation in the Territories are staggering. While Puerto Rico has received some investment (further discussed below), American Samoa, Guam, Northern Marianna Islands and the U.S. Virgin Islands have received no NMTC investment to date.

The Territories have an average per capita income of just over $26,000 annually.[3]  While any of the Territories functions as a good example of this issues, Puerto Rico, the only one to receive any investment at all, will be highlighted here.  Currently, Puerto Rico’s unemployment rate is approximately 15%, which is more than twice that of the United States.[4]  Additionally, Puerto Rico has more per capita debt than any of the United States[5]; however, the latest available numbers show NMTC investment in Puerto Rico around $110 million dollars total, approximately .3% of total NMTC investment.  Of this number, only $500,000 came from a CDE outside of Puerto Rico.[6]

Puerto Rico is in desperate need of investment in healthcare and manufacturing- there is scarcely a spot on the entire island that is not medically underserved.  The NMTC program was developed to encourage investment into low income areas.  One would be hard pressed to find areas more in need of NMTC investment than the Territories.

Julia Fendler

Julia Fendler

[1] CDFI Fund NMTC Program Allocation Application Questions and Answers available at

[2] Ibid

[3] The World Factbook available at

[4] Welcome to Puerto Rico available at

[5] Ibid

[6]CDFI Fund Releases New Markets Tax Credits Public Data for 2003-2013 available at