How permanence changes the players

Under an extension model, NMTC participation required organizations to absorb upfront costs, staffing needs, and learning curves with little assurance the program would remain available long enough to justify the investment.

Permanence changes that risk calculus, and overall strengthens the program’s appeal. It signals stability, attracts attention, and encourages new participants to explore the space; it may even entice back “re-entrants” from those who had previously stepped away. We have so far begun to see interest from:

• • Organizations exploring becoming CDEs over a medium-term horizon rather than immediately
  • Investors with adjacent experience who can now justify learning NMTC structures and timelines
  • Local, regional, or state-aligned entities evaluating NMTC as a sustained community development tool
  • Sponsors and nonprofits that previously stayed on the sidelines due to timing and uncertainty

That said: That interest has not yet translated cleanly into participation, and the market is instead in what can best be described as a “soft expansion” phase. New entrants are exploring the program, but structural factors – such as long timelines, intricate structuring requirements, and uncertain allocation availability timing – continue to slow full entry.

This is a different dynamic than seen with prior, finite program extensions, when activity often centered on short-term deployment and known counterparties. By contrast, permanence is validating longer-term strategic decisions and encouraging participants to invest in the platform – but not necessarily accelerating execution timelines. Yet.

Opportunities to harness

New partnership candidates and conditions

Permanence is enabling deeper engagement with institutions that may not have previously invested in NMTC, including large nonprofits, municipalities, and national organizations. New entrants often bring:

• • Local market knowledge and sourcing strength
  • Mission alignment in priority areas such as housing, rural investment, or community facilities
  • Balance sheet participation, lending capacity, or operating expertise that complements allocation holders

The promise of longer-term timelines creates opportunities for longer-term collaboration, beyond transactional relationships. The time is right to:

• • Develop multi-project or programmatic relationships rather than one-off deals
  • Educate new partners on how and when to use NMTC effectively
  • Leverage networks to scale knowledge across affiliated organizations

In this time of expansion, individual partners may be more or less familiar with the program, but permanency allows room for growth through a phased approach: learning, partnering, and gradually expanding roles over multiple cycles, taking time to build experience, credibility, and relationships.

Sharpen strategies

Cut through competition

Even before permanence, the NMTC was very competitive, and it is likely to remain so as more players seek to be involved.This competition is not inherently negative; it reflects program strength and expanded relevance. This industry has long been built on collaboration; for example, we’ve often seen CDEs partner with one another to make sure that projects have adequate allocation to succeed. Participants of all types should plan to carry forward that model by proactively defining where collaboration adds value – geography, asset class, sourcing, execution – rather than default to a competitive mindset.

However, competition does raise the bar for differentiation. Organizations that rely on historical positioning alone may find themselves outpaced as the environment continues to evolve.

New and established players alike should take time to:

• • Refine your value proposition: Clearly articulate your investment strategy, target sectors, and community impact.
  • Strengthen deal-flow pipelines: Build stronger relationships with sponsors and intermediaries.
  • Prioritize application readiness: Treat allocation applications as a continuous, year-round effort.
  • Use data effectively: Demonstrate track record and impact in a concise, compelling way.

Balance safety and growth

Even with the prospect of new opportunities, in a time of change, it can be tempting to default to known counterparties – potentially a safer approach, but one that ultimately limits ecosystem growth.

Instead, find ways to balance the risks of branching out:

• • Formalize portfolio strategies that balance low-risk and new-venture deals.
  • Define acceptable levels of execution variability.
  • View onboarding as a strategic investment.

Fostering collaboration

The NMTC program has been evolving for 25 years, and it takes an experienced hand to fully navigate its intricacies: transaction lifecycles, capital structuring nuances, compliance and reporting requirements. As a result, new collaborations may require more time (e.g., longer deal ramp-up periods, variability in execution times), more early-stage education, and more iterative deal development. Experienced players can help ease the path by:

• • Building tiered engagement models (emerging vs. experienced participants)
  • Developing standardized “How NMTC works” materials
  • Treating onboarding as part of the transaction process, not a separate activity

On a broader scale, permanence has not eliminated the barriers that have historically limited entry: uncertain timing, long lead times, network access challenges, high knowledge requirements. To encourage and facilitate more new entry, existing players can:

• • Establish clear intake and readiness criteria for new entrants.
  • Build pre-development or “pre-NMTC” pipelines to prepare participants before allocation competition.
  • Create defined entry points into the ecosystem through outreach and partnerships.

Lowering barriers does not mean lowering standards – it means making the pathway to participation more transparent and navigable.

Translate new participation into new progress

Permanence creates the conditions for growth, but it does not guarantee it. Growth will depend on whether participants at all stages can collaborate effectively, support one another’s success, and maintain execution efficiency at scale.

Those that treat this expansion not as friction, but as a long-term growth signal, will be best positioned to capture the opportunities that permanence creates.