What is a Community development entity?
A Community Development Entity is a domestic corporation or partnership that receives certification from the IRS to participate in the New Markets Tax Credit program. To qualify, the entity must have a primary mission of serving or providing investment capital to low-income communities, maintain accountability to residents through board representation or advisory councils, and demonstrate a track record of capital deployment in underserved areas. CDEs apply annually for NMTC allocation authority from the Community Development Financial Institutions Fund, competing for limited credits based on their business strategy, capitalization strategy, and community impact track record. Successful CDEs coordinate with Individuals and businesses to deploy capital while managing complex compliance requirements throughout seven-year credit periods.
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