Why Construction Owners Should Pay Attention to the 2026 New Markets Tax Credit Round
Some projects with the greatest potential community impact are also the hardest to finance.
On September 17, the U.S. Treasury Department’s Community Development Financial Institutions Fund opened the 2026 New Markets Tax Credit allocation round, making $5 billion in allocation authority available for investment in qualifying low-income communities.
Although the program operates through specialized financial and community-development organizations, its effects can be highly tangible: renovated buildings, expanded manufacturing facilities, community-serving developments, new jobs, and construction activity in areas where conventional financing may not be sufficient.
How the Program Works
The New Markets Tax Credit program encourages private investment in economically distressed communities.
Certified Community Development Entities receive authority to offer federal tax credits to investors. Those organizations then direct the resulting capital into qualifying businesses and projects. Investors may claim credits totaling 39% of their qualified investment over seven years.
Since the program began in 2000, the federal government has awarded $91 billion in allocation authority. According to the CDFI Fund, the program has supported millions of square feet of manufacturing, office, and retail development while creating or retaining more than 950,000 jobs.
A Tool with Regional Relevance
The program is not theoretical for the St. Louis region.
The Heartland Regional Investment Fund, a subsidiary of the St. Louis Economic Development Partnership, has used New Markets Tax Credit financing to support projects and businesses in distressed communities throughout portions of St. Louis and St. Charles counties and Southwestern Illinois.
A recent regional example included a $4 million New Markets Tax Credit investment supporting Alton Steel’s operations and expansion.
For qualifying projects, this type of financing can help close the gap between what a development costs and what traditional funding sources can reasonably support.
The 2026 Timeline Is Moving Quickly
Organizations seeking an allocation face several near-term deadlines:
- September 22: Certification deadline for applicants not already certified as Community Development Entities
- October 6: Application registration deadline
- November 10: Allocation application deadline
- Summer 2027: Awards expected to be announced
Owners do not apply for credits in the same way they would seek a conventional loan. Instead, potential projects typically work with Community Development Entities and experienced financial, legal, and development partners.
That makes early identification and coordination essential.
Why It Matters to the Region
St. Louis has no shortage of buildings and neighborhoods with redevelopment potential. The challenge is often assembling enough capital to make those projects feasible.
This $5 billion national allocation round creates a timely reason for owners, developers, public agencies, and community partners to examine whether planned projects could qualify for New Markets Tax Credit investment.
For architects, engineers, contractors and other providers, it is also a reminder that project financing increasingly shapes when—and whether—construction opportunities move forward.
Understanding the funding strategy behind a project allows the entire team to provide better guidance on scope, phasing, cost certainty and long-term feasibility.
The strongest project teams do more than respond after financing is complete. They help owners develop projects that can attract investment and move successfully from vision to construction.
