The New Markets Tax Credit (NMTC) Program drives transformative investment across California, from Silicon Valley’s innovation corridors to Los Angeles’s manufacturing districts, the Central Valley’s agricultural communities, and underserved neighborhoods in cities throughout the world’s fourth-largest economy. As home to extraordinary wealth alongside persistent poverty, California presents compelling opportunities for NMTC deployment that address economic inequality, expand access to essential services, and create quality employment in communities excluded from the state’s prosperity. CBO Financial partners with technology companies, manufacturers, healthcare providers, and community organizations to structure financing solutions leveraging California’s economic dynamism while serving its most economically distressed areas.
California’s economy—characterized by technology and innovation, entertainment and media, aerospace and defense, agriculture, biotechnology, clean energy, and international trade—creates diverse applications for community development investment. The state generates more business activity than most nations, yet maintains census tracts with poverty rates exceeding 40% and neighborhoods lacking basic services. This economic disparity makes NMTC loan financing particularly valuable for projects serving California’s underserved communities.
How the NMTC Program Works in California
The NMTC Program incentivizes private capital investment by providing federal tax credits to investors who support qualified businesses and real estate projects in designated low-income census tracts. Community Development Entities (CDEs) certified by the U.S. Treasury’s CDFI Fund receive allocation authority to deploy tax credit equity into qualifying projects throughout California’s diverse urban, suburban, and rural communities.
In California, this financing structure addresses several distinct market challenges. Despite the state’s overall prosperity, many neighborhoods in Los Angeles, Oakland, Fresno, Stockton, and other cities experience concentrated poverty, limited commercial investment, and inadequate access to healthcare, fresh food, and quality employment. The Central Valley, despite producing a significant share of the nation’s agricultural output, includes counties with poverty rates rivaling those of Appalachia. Immigrant communities, particularly along the state’s southern border and in agrarian regions, face language barriers, limited capital access, and discrimination preventing conventional financing despite viable business concepts and community needs.
The NMTC subsidy—approximately 20% of the qualified equity investment after fees—bridges financing gaps that prevent economically viable projects from achieving financial feasibility. Whether supporting a food manufacturing facility creating jobs in South Los Angeles, developing a community health center in the Central Valley, or financing a technology training center in East Oakland, NMTC capital enables projects that conventional underwriting rejects despite strong community impact potential and solid economic fundamentals.
California benefits from numerous active CDEs, including California Statewide Communities Development Corporation (CSCDC), which has deployed significant NMTC allocations throughout the state, and Civic Communities, which focuses on San Diego’s underserved neighborhoods. These organizations understand California market conditions, regulatory complexity, and community needs, making them valuable partners for NMTC transactions. For comprehensive information about California’s broader community development finance ecosystem, explore our resources covering CDFI requirements and multiple capital sources supporting economic growth in underserved markets.
Eligible Projects and Borrowers
NMTC financing in California supports diverse community development initiatives aligned with the state’s economic strengths and community needs.
Technology and Innovation projects include technology business incubators in underserved urban neighborhoods, workforce training facilities preparing residents for tech industry careers, advanced manufacturing supporting semiconductor production and clean energy technology, and data centers in economically distressed areas. California’s position as a global technology leader creates opportunities for NMTC-financed projects that connect underserved communities to the innovation economy.
Food Processing and Agriculture projects encompass food manufacturing and value-added agricultural processing, cold storage and distribution infrastructure, specialty crop processing supporting California’s diverse agricultural production, organic and sustainable food operations, and aquaculture facilities. The Central Valley’s agrarian dominance, combined with significant rural poverty, creates substantial NMTC opportunities supporting food-related industries.
Healthcare and Education projects address critical access gaps through federally qualified health centers in urban food deserts, rural clinics serving agricultural communities, specialty care facilities addressing California’s healthcare disparities, behavioral health centers supporting communities affected by substance abuse and homelessness, charter schools and STEM education centers, and workforce training facilities preparing Californians for careers in healthcare, technology, and advanced manufacturing.
Entertainment and Media projects leverage California’s entertainment industry leadership through production facilities in distressed neighborhoods, music recording studios supporting local artists, film and television production infrastructure, and creative arts centers providing youth programming and community services.
Clean Energy and Sustainability projects include solar manufacturing and installation operations, energy storage facilities, electric vehicle charging infrastructure, sustainable building materials production, water conservation technology, and circular-economy enterprises that address California’s environmental priorities while creating quality employment.
Commercial and Community Development encompasses downtown revitalization in smaller California cities, mixed-use developments combining housing and commercial space, grocery stores serving food-desert areas, particularly in Central Valley communities, community centers providing social services, and facilities supporting nonprofit organizations serving low-income populations.
Eligible borrowers include for-profit businesses, nonprofit organizations, cooperatives, social enterprises, real estate developers, and community facilities serving qualified low-income communities. Projects must be located in qualifying census tracts and demonstrate measurable community benefit through job creation, service provision to low-income populations, or economic revitalization of distressed neighborhoods.
CBO Financial provides experienced NMTCs consulting, helping California borrowers navigate qualification requirements, identify appropriate CDEs with California allocation authority and mission alignment, and structure transactions optimized for community impact while managing California’s complex regulatory environment.
Benefits of the NMTC Program for California
The NMTC Program delivers substantial benefits, particularly suited toCalifornia’ss development challenges and opportunities:
Addressing Economic Inequality: California’s stark wealth disparities require creative financing solutions. NMTC enables projects serving communities excluded from the state’s prosperity, creating employment opportunities, expanding essential services, and building community assets in neighborhoods where conventional investment remains scarce despite clear economic potential.
Central Valley Development: California’s agricultural heartland faces persistent poverty despite its critical role in national food production. NMTC-financed food processing facilities, agrarian technology operations, healthcare centers, and commercial development strengthen Central Valley communities while supporting California’s agricultural economy.
Urban Neighborhood Revitalization: Los Angeles, Oakland, Fresno, and other California cities have neighborhoods experiencing disinvestment despite their urban locations. NMTC financing enables downtown revitalization, commercial corridor development, community facilities, and mixed-use projects, catalyzing broader neighborhood transformation.
Technology Sector Access: California’s technology economy generates extraordinary wealth, concentrated in specific regions and demographics. NMTC-financed training facilities, technology incubators, and manufacturing operations connect underserved communities to opportunities in the innovation economy, addressing skills gaps while providing employers with access to untapped talent.
Immigrant Community Support: California’s substantial immigrant population faces unique challenges in accessing capital and opportunities. NMTC supports businesses serving these communities —from food production and distribution to specialty retail and services —while creating culturally appropriate employment opportunities.
Healthcare Access Expansion: Despite California’s overall prosperity, many communities lack adequate healthcare access. NMTC-financed clinics, specialty care centers, and behavioral health facilities bring essential services to underserved urban and rural areas, improving health outcomes while creating quality employment for healthcare professionals.
Climate Innovation: California’s clean energy leadership creates opportunities for NMTC-financed projects addressing climate challenges while creating quality employment. Solar manufacturing, energy storage, sustainable agriculture, and circular economy enterprises align environmental and economic development objectives.
Whether you’re expanding technology operations, developing healthcare facilities, or creating community infrastructure in California, CBO Financial can assess your project’s eligibility and structure financing suited to the state’s unique market conditions and regulatory complexity. Request a project consultation to explore your options.
Regulatory & State Development Framework
California’s economic development framework supports projects aligned with NMTC objectives by enabling agencies to understand the state’s unique dynamics. The California Governor’s Office of Business and Economic Development (GO-Biz) serves as the state’s leader for job growth and economic development efforts in the world’s fourth-largest economy. GO-Biz offers no-cost consultation services, including site selection, permit streamlining, regulatory guidance, small business assistance, and coordination with state resources that complement NMTC transactions.
The California Jobs First initiative, launched by Governor Newsom, represents a bottom-up economic development strategy that engages 13 regional collaboratives and identifies 10 strategic industry sectors to drive sustainable economic growth. This framework aligns with NMTC program objectives by prioritizing job creation in underserved communities and supporting industry sectors critical to California’s financial future.
California Statewide Communities Development Corporation (CSCDC) serves as a major CDE deploying NMTC allocation throughout California. Created by the California Statewide Communities Development Authority, CSCDC focuses on community facilities, charter schools, healthcare centers, and projects creating significant community impact in low-income areas across the state’s 530+ participating cities, counties, and special districts.
California’s network of regional economic development organizations, workforce development boards, and community-based financial institutions provides localized support for project planning, workforce training, and coordination with state programs. The state’s robust CDFI sector includes organizations specializing in a range of market segments, from technology startups to agricultural enterprises to immigrant-owned businesses.
CBO Financial maintains relationships with CDEs holding California allocation authority and specializes in navigating the state’s complex regulatory environment, coordinating with GO-Biz programs and regional initiatives, and structuring comprehensive financing packages maximizing available resources while ensuring compliance with federal NMTC regulations and California state requirements.
Get Started with NMTC Financing in California
Ready to explore how New Markets Tax Credits can support your California project? CBO Financial’s experienced team understands California’s unique market dynamics—extraordinary economic diversity, stark wealth inequality, complex regulatory environment, and regional variations from Silicon Valley to the Central Valley to Southern California—and can structure transactions suited to your specific circumstances.
From initial feasibility assessment through closing and compliance monitoring, we provide comprehensive support throughout the NMTC process. We evaluate projects considering California-specific factors, including environmental regulations, labor requirements, workforce availability across diverse regions, and coordination with state economic development programs and regional initiatives.
Contact us today to discover how strategic community development finance can transform your vision into reality while delivering lasting benefits to California’s underserved communities.