Planning under permanence: How NMTC investors, CDEs, and developers can operationalize new certainty

The permanence of the New Markets Tax Credit (NMTC) program marks a pivotal shift toward greater certainty and stability. With annual allocation authority incorporated in the One Big Beautiful Bill Act (OBBB), organizations can plan farther ahead than ever before. Plus, permanence adds a credibility that is likely to give lending organizations like smaller banks and municipalities the confidence to explore the program, and attract new participants to the space. 

At the same time, this shift is not a simplification: timing and award sizes for now remain uncertain, along with the inherent uncertainty of application success for new and seasoned community development entities (CDEs) alike. The result is a new operating reality: Longer horizons paired with ongoing variability. 

For investors, CDEs, and developers, the most important change is not strategic, but operational. Permanence will benefit organizations that treat NMTC as a continuous (if not guaranteed) business line, invest deliberately in people and systems, and build flexibility into staffing, capital deployment, and pipelines. Read on for best practices for this new world, based in part on insights shared at our 25th annual NMTC Summit.

Plan for permanence, operate for uncertainty 

Permanence allows organizations to move beyond year-to-year survival planning, but it does not eliminate risk. Awards are still competitive, and may become even more so as permanence attracts more players. By nature, participants will continue to see variation in funded geographies, asset classes, and census tracts based on which CDEs receive awards, federal priorities, and other factors. Deployment thresholds may shift from round to round. Timelines remain uneven – though relief in that regard may be on the horizon, with the hope that NOAAs and award announcements will take on a more regular cadence.  

Effective planning now requires holding two ideas at once: NMTC is permanent, but outcomes are still not guaranteed. 

At a high level, this means organizations should consider treating NMTC more as an ongoing platform than a one-off opportunity, while retaining flexibility for years where awards do not come through as expected (smaller allocations, not chosen for allocation). More specifically, it may mean deliberately targeting future-year projects and/or adjusting deployment pacing.  

(On the flip side, permanence also offers greater freedom around project timing: If a project is not yet ready, there is less pressure to fit it into the soonest announced allocation round, as a next one is more certain to be coming. Requests for funding can wait until all the right pieces are in place, shovel-ready.) 

For developers, this all reinforces the value of early engagement and realistic scheduling; for investors, it supports more disciplined capital deployment.  

Start with the following: 

• Model at least two operating scenarios each year: Award and no award. 
• Pressure-test pipeline assumptions against smaller-than-expected allocations. 
• Evaluate whether smaller investments can create impact without straining execution capacity. 
• Explore opportunities for other community lending.  
• Build a strategy for staying active in the program even in years without an award, such as building long-term institutional relationships with other participants; increasing advocacy efforts; or shifting focus to internal systems, processes, and procedures to be better prepared for the next round.  

Align staffing strategy with reality, toward continuity and growth 

While permanence is increasing willingness to invest in headcount – and may make positions more enticing to potential hires, with greater assurance that the program is here to stay – NMTC expertise remains specialized and difficult to source directly.  

It is a good idea to assume award success and stay prepared with the necessary staff to support underwriting, recording, and other key functions. But rather than hiring narrowly for NMTC experience, organizations are more likely to find success in prioritizing core financial and operational skill sets and building program knowledge post-hire. Or, consider outsourcing to take advantage of external expertise in NMTC compliance, reporting, and asset management.  

• Hire for transferable skills – accounting, underwriting, finance, development – rather than specific prior NMTC experience. 
• Create explicit internal training paths – e.g., one-on-one coaching, professional development training – so that NMTC knowledge is shared, not concentrated. Prioritize continuous training with exposure to deals across lifecycle stages. 
• Use cross-functional or outsourced staffing during peak periods (instead of permanent over-hiring). Avoid being too siloed within the NMTC community: Consider collaborators that may have less NMTC experience, but offer relevant strengths such as construction management, or a strong track record with historic, low-income housing, renewable, or other tax credit programs. 
• Identify succession and knowledge-transfer risks early. NMTC is an intricate program, and it takes time to learn; expertise should not reside with one person. Position NMTC as a core enterprise capability, not a niche program, and document processes and institutional knowledge to support continuity and training. 

Along with growing their NMTC expertise, organizations will need to grow their general operational expertise to support expansion and acceleration. As portfolios grow, many CDEs are discovering that asset management and compliance capacity – not capital – becomes the limiting factor. Lean teams that once focused on origination are now managing larger post-closing obligations across reporting, asset management, and ongoing monitoring. Amid this shift, operational maturity will increasingly be a differentiator for investor confidence and long-term partnerships. 

• Reassess staffing needs based on portfolio size, not just annual deal flow. 
• Allocate dedicated resources for asset management and reporting – and/or consider outsourced options – as portfolios exceed manageable thresholds. 
• Evaluate where/when specialized roles are warranted versus generalist coverage. 
• Assess technology systems for opportunities to modernize: Centralize data systems, enable enterprise-wide visibility, harness efficiencies in AI and innovation.  
• Treat post-closing obligations as core operations, not overhead. 

Standardize where it works 

NMTC transactions remain bespoke by nature. Attempting to fully standardize deal structures often adds friction without reducing risk. Instead, the potential for strongest efficiency gains is post-closing, particularly in compliance and reporting, where standardization can support both audit readiness and smoother long-term asset management. 

• Resist one-size-fits-all templates for deals; instead, focus standardization efforts on data capture, documentation discipline, reporting alignment, and compliance calendars. 
• Build policies and procedures that mirror CDFI Fund reporting requirements from the outset. 

Embed continuous audit and desk review readiness into operations and systems 

With NMTC permanence, expectations around documentation and transparency are just as important, even without formal regulatory changes. To reduce disruption and support more predictable operations over time, shift compliance from a periodic preparation exercise to an operational discipline around continuous readiness. 

• Remember that whether by the IRS or the CDFI Fund, records may be reviewed at any time; maintain “open-file” readiness. 
• Periodically self-review compliance files against reporting requirements and/or consider engaging an outside advisor to perform a mock assessment. 
• Follow compliance and asset management policies and procedures throughout routine workflows (rather than during year-end or AMIS deadline scrambles). 

From permanence to performance 

NMTC permanence will not reward complacency; it will reward organizations that invest in people, systems, and operational discipline, while acknowledging that uncertainty remains.  

For investors, CDE leadership, and developers, planning for permanence means building organizations that are continuously ready, adaptable, and resilient. With the days of survival mindset now in the past, NMTC players can focus more fully on operational excellence and growth.