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The directory has been created for national banks and federal savings associations interested in learning about financing and investment opportunities from federal tax credit programs designed to promote community economic development and energy conservation.
The information contained in this guide is general in nature. Banks should consult their own tax advisors about these tax treatments and the consequences that may apply to their own transactions. When it is necessary to distinguish between national banks and federal savings associations, they are referred to separately; otherwise, they are referred to collectively as banks.
National banks may make investments that are primarily designed to promote the public welfare under the investment authority in 12 USC 24(Eleventh) (PDF) and the implementing regulation, 12 CFR 24. This authority allows banks to make investments that primarily benefit low- and moderate-income individuals, low- and moderate-income areas, or other areas targeted by a government entity for redevelopment, or if the investment would receive consideration as a qualified community development investment under 12 CFR 25.23 of the Community Reinvestment Act. Examples of these investments include supporting affordable housing and other real estate development, providing equity for start-up and small business expansion, and revitalizing or stabilizing a government-designated area (see the Public Welfare Investments Fact Sheet for more information).
National banks seeking to provide financing to tax credit projects under the public welfare investment authority must either request prior OCC approval or submit an after-the-fact notice to the OCC, depending on the bank’s safety and soundness profile, CRA performance, and the nature of the project financing.
Federal savings associations may make similar public welfare investments under 12 CFR 560.36. They also have limited authority under 12 CFR 160.36, “De Minimus Investments,” to make investments of the type permitted for national banks under 12 CFR 24.11 Further, federal savings associations are authorized under 12 CFR 159 to make investments in service corporations engaged in broad range of preapproved activities, including certain community development related investments and activities that include “investments in low-income housing tax credit and new markets tax credit projects and entities authorized by statute (e.g., community development financial institutions) to promote community, inner city, and community development purposes.”
Under 12 USC 24(Seventh) and 12 USC 1464 lending authority and implementing regulation 12 CFR 7.1025 (effective on April 1, 2021), banks may engage in tax equity finance transactions. A tax equity finance is the functional equivalent of a loan, and the transaction satisfies applicable conditions. The authority to engage in tax equity finance transactions is separate from, and does not limit, other investment authorities available to banks under the National Bank Act, for example, public welfare investments pursuant to 12 USC 24(Eleventh) and 12 CFR 24. See OCC Bulletin 2021-15, “Commercial Lending: Tax Equity Finance Transactions Pursuant to 12 CFR 7.1025.”
For more information, refer to the Public Welfare Investments Resource Directory.
If you need assistance, please call the Community Affairs Department at (202) 649-6420 or contact your District Community Affairs Officer.
The federal Historic Tax Credit Program helps revitalize communities by encouraging the flow of private funds to facilitate the rehabilitation of historic buildings. Under the program, the costs of rehabilitation and restoration of certified historic properties are subsidized by transferring HTCs from project sponsors to third parties, which may include banks. The National Park Service within the U.S. Department of the Interior and the Internal Revenue Service jointly administer the Historic Tax Credit Program in partnership with State Historic Preservation Offices.
On December 22, 2017, Public Law No. 115-97 was signed and enacted, amending the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. Pub. L. 115-97 (Section 13402) modifies the 20 percent HTC and provides certain transition rules. These and other changes to the Internal Revenue Code may affect a taxpayer’s ability to use of the 20 percent HTC. Pub. L. 115-97 also repeals the 10 percent HTC for non-historic buildings.
National Park Service
U.S. Department of the Interior, National Park Service (NPS)
The NPS administers the Historic Tax Credit program jointly with the Internal Revenue Service (IRS) and in partnership with State Historic Preservation Offices (SHPO). They offer a wealth of resources including Program Regulations for Historic Tax Credits, 36 CFR 67.
U.S. Department of the Treasury, Internal Revenue Service
National Conference of State Historic Preservation Officers (NCSHPO) NCSHPO is the professional association of the state government officials who carry out the national historic preservation program as delegates of the Secretary of the Interior pursuant to the National Historic Preservation Act of 1966, as amended (NHPA) (16 USC 470). The NHPA provides for the designation of a State Historic Preservation Officer (SHPO) in each state.
National Housing & Rehabilitation Association (NH&RA) NH&RA is an association for professions in the historic rehabilitation, affordable housing, new markets, and renewable energy tax credit programs. In addition, the association produces Tax Credit Advisor publications for organizations interested in financing tax credit projects.
National Trust for Historic Preservation The National Trust for Historic Preservation is a private, nonprofit membership organization dedicated to saving historic places and revitalizing America’s communities by providing industry leadership, education, advocacy, and resources.
Novogradac Historic Tax Credit Resource Center The resource center offers information on IRS rulings, legislation, studies and reports, and breaking news on Historic Tax Credits.
The Low-Income Housing Tax Credit (LIHTC) program was established by the Tax Reform Act of 1986 (Internal Revenue Code Section 42) to create market incentives for the acquisition and development or rehabilitation of affordable rental housing. The equity capital generated from the tax credits lowers the debt burden on LIHTC properties, making it easier for owners to offer lower, more affordable rents, while investors, such as banks, obtain a dollar-for-dollar reduction in their federal tax liability. Over the past 25 years, this program has become an important tool for addressing the nation’s affordable housing needs.
The U.S. Department of the Treasury’s Internal Revenue Service is the federal agency responsible for administering the LIHTC program. LIHTCs are distributed to state housing finance agencies (HFA) on an annual basis. The state HFAs then allocate the credits to qualified affordable housing development projects on a competitive basis. HUD collects data on LIHTC projects and provides resources for using the program to develop affordable rental housing.
Internal Revenue Service
State Housing Finance Agencies
U.S. Department of Housing and Urban Development
Affordable Housing Investors Council The council provides information about the benefits of investing in affordable housing tax credit properties, educates corporate investors on all aspects of affordable housing, and discusses issues of importance to investors in the industry.
Affordable Housing Tax Credit Coalition The coalition is a group of developers, syndicators, lenders, nonprofit groups, public agencies, and others concerned with the low-income housing tax credit.
CohnReznick Affordable Housing Resource Center The center has a variety of materials, including housing tax credit performance data and analysis.
National Association of Local Housing Finance Agencies The national association comprises professionals, city and county agencies, nonprofit organizations, underwriters, consultants, financial advisors, bond counsels, and rating agencies that help finance affordable housing in the broader community development context at the local level.
National Association of State and Local Equity Funds The association promotes the efficient management of state and local equity funds to create or rehabilitate affordable rental housing throughout the United States.
National Housing & Rehabilitation Association The association is an association for professions in the historic rehabilitation, affordable housing, new markets, and renewable energy tax credit programs. In addition, the association produces the Tax Credit Advisor for organizations interested in financing tax credit projects.
Novogradac Affordable Housing Resource Center The center provides news, facts and figures, federal and state guidance, research and reports, and other resources on the LIHTC program.
Community Development Insights: Low-Income Housing Tax Credits: Affordable Housing Investment Opportunities for Banks This edition of Community Developments Insights describes how LIHTCs are used to develop affordable rental housing and how banks can benefit from investing in LIHTC-financed projects. The report describes the two approaches for investing in LIHTCs: direct investments in individual affordable housing projects and fund investments that have multiple projects managed by third parties. The report outlines risks and regulatory considerations of LIHTC investments and describes how these investments would be considered under the Community Reinvestment Act.
The New Markets Tax Credit (NMTC) Program was designed to leverage private capital to spur economic development in urban and rural low-income communities. Within the U.S. Department of the Treasury, the Community Development Financial Institutions Fund (CDFI Fund) and the Internal Revenue Service (through Section 45D of the Internal Revenue Code) jointly administer the program. The NMTC Program has become an important tool for promoting economic development and community revitalization strategies in low-income markets.
The US Department of the Treasury
The Treasury Department’s CDFI Fund, established by the Riegle Community Development and Regulatory Improvement Act of 1994, expands the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities in the United States. The CDFI Fund is the administrator of the NMTC Program. The NMTC Program website provides information on the program, including eligibility and application materials.
CDFI Coalition The coalition represents community development financial institutions (CDFI) nationwide. CDFIs often work in partnership with banks to develop innovative ways, including NMTCs, to deliver loans, investments, and financial services to distressed communities.
New Markets Tax Credit Coalition The coalition is a national membership organization that promotes increased economic activity in low-income urban and rural communities through the NMTC Program. The coalition carries out action-oriented research, policy review and analysis, technical assistance and lobbying in support of the NMTCs.
Novogradac New Markets Tax Credit Resource Center The center provides news, facts and figures, federal and state guidance, research and reports, a mapping tool and other resources on the NMTC Program.
The following case studies are examples of typical NMTC projects.
Community Developments Insights Report: New Markets Tax Credits: Unlocking Investment Potential This report examines the primary risks, benefits, and regulatory considerations associated with NMTCs. The report also discusses the ways in which bank investors have structured and managed these credits effectively. Banks have been active participants in the NMTC Program because of the ability to generate competitive economic returns, and the opportunities they present for positive Community Reinvestment Act consideration.
Revitalizing Communities Using the Public Welfare Investment Authority Video This brief video describes the OCC’s role in administering the public welfare investment authority and encouraging participation in the NMTC Program.
An opportunity zone is an economically distressed area designated by the U.S. Department of the Treasury to attract private investment from qualified opportunity funds (QOF). A QOF is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property in an opportunity zone. Monies invested in QOFs can help spur economic development and create jobs in these distressed areas.
CDFI Fund
Economic Innovation Group The Economic Innovation Group (EIG) is a national leader in bringing geographic inequality into the national conversation, analyzing the decline in economic dynamism, and developing ideas that strengthen the foundations of our economy. The organization produces maps, research, and webinars on how the opportunity zone tax incentive is being used in the United States.
Beeck Center Inclusive Community Impact Investing The Beeck Center teamed with the Centre for Public Impact to launch Opportunity to Impact: An Investment Assessment Tool and published three Impact in Action Case Studies illustrating usage of the Beeck Center Guiding Principles and Impact Reporting Framework. The tool seeks to increase positive social, economic, and environmental impacts in underserved communities by helping project sponsors define steps for impact and access resources to increase that impact.
Urban Institute Opportunity Zones The Urban Institute has conducted research, analyzed data, and developed an impact assessment tool for opportunity zone investments.
This resource guide provides easy access to information on national organizations and programs that encourage investment in renewable energy production. Use the resource guide to explore tax incentives and technical assistance sources for investing in renewable energy facilities.
The U.S. Department of Agriculture offers a variety of rural development energy programs.
The U.S. Department of Energy has numerous programs to promote energy efficiency. Visit these two websites for more information:
The U.S. Department of Housing and Urban Development Office of Environment and Energy describes energy initiatives and policies.
The U.S. Energy Information Administration offers statistical information and analysis regarding renewable energy.
Database of State Incentives for Renewables & Efficiency is a comprehensive source of information on federal, state, local, and utility incentives that promote renewable energy and energy efficiency.
American Solar Energy Society The association comprises solar professionals and advocates.
American Clean Power The association strives to transform the U.S. power grid to an affordable, reliable and clean power system.
Edison Electric Institute The institute provides information about various energy efficiency and low-income energy assistance programs offered by utility companies.
Novogradac Renewable Energy Tax Credit Resource Center The center offer information on Internet Revenue Service rulings, legislation, studies and reports, and news on renewable energy tax credits.
Alternative Energy News This resource provides articles about renewable energy, and new technologies intended to help civilization use energy and natural resources in a more sustainable and efficient way. The Renewable Energy Markets Association represents organizations that sell, purchase, or promote renewable energy products.
Solar Energy Industry Association The association represents the U.S. solar energy industries.
Solar Electric Power Alliance The alliance represents electric utilities, solar companies, and other companies with an interest in solar electricity.
26 USC Section 48, Legislation authorizing investment tax credit for renewable energy facilities.
26 USC Section 45, Legislation authorizing production tax credit from renewable energy sources.
OCC Community Developments Fact Sheet: Investing in Wind Energy Under the Public Welfare Investment Authority This fact sheet outlines key issues for banks investing in wind energy using the Public Welfare Investment Authority.
OCC Community Developments Fact Sheet: Public Welfare Investments in Solar Energy Facilities Using Renewable Energy Investment Tax Credit This fact sheet outlines key issues for banks investing in the federal energy investment tax credit (ITC) program.
Community Developments Insights: Investing in Wind Energy Using the Public Welfare Investment Authority This issue examines how banks can be a source of financing for facilities that generate renewable wind energy.
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