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New Market Tax Credits

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New Market Tax Credits (NMTC) are intended to support business growth, job creation and spur economic development in under served communities across the country. Typical projects involve the acquisition, rehabilitation or construction of real estate or the expansion of operating businesses in low-income communities. These can include:

  • Commercial offices and retail services/products
  • Mixed-use (commercial/residential) properties
  • Factories and industrial facilities
  • Community centers
  • Educational facilities
  • Entertainment/cultural facilities
  • Health-related facilities
  • Hotels and hospitality properties
  • Businesses that buy, develop, build, rehabilitate or sell residential property
  • Small business loan funds

Projects often focus on:

  • Creating quality jobs in low-income communities
  • Assisting minority, women-owned and low-income community businesses
  • Offering flexible lease rates to tenant businesses
  • Providing goods and services and housing options in low-income communities
  • Improving access to healthy and affordable food options
  • Increasing environmental sustainability
  • Pioneering developments that will catalyze additional private investments in the community

In order to finance underlying businesses and developments, Community Development Entities (CDEs), which are organizations that have primary missions of providing investment capital for, and other financial services to, qualified businesses in the low-income communities that the CDE serves. CDEs apply to the Community Development Financial Institutions Fund (CDFI Fund), a division of the U.S. Department of the Treasury, in a competitive application process for NMTC Allocation Authority. This Authority allows successful CDEs to raise investment capital from private investors in exchange for the rights to claim tax credits over a seven year compliance period (5 percent of the aggregate qualified investment for three years and 6 percent for the remaining four years). Capital raised by the CDEs is then used to provide below-market financing to qualified businesses in low-income communities.

View more information on New Market Tax Credits, or contact our Economic Development Division to find out how you can qualify today.