The New Market Tax Credit (NMTC) program has supported thousands of diverse projects since its establishment in 2000, directing billions of dollars in investment capital toward economically distressed communities across America. The program’s flexibility regarding project types represents one of its most valuable characteristics, enabling Community Development Entities (CDEs) to respond to varied community needs across multiple sectors and asset classes. For developers, business owners, and community organizations evaluating whether NMTC financing might support their initiatives, understanding what types of projects are eligible for New Market Tax Credits funding helps identify opportunities, structure appropriate proposals, and maximize the program’s potential to catalyze transformative community development investments.
Manufacturing and Industrial Facilities
Manufacturing projects represent one of the most common and successful categories of NMTC-financed developments. The program has supported diverse manufacturing operations including food processing facilities, advanced manufacturing plants, automotive parts suppliers, furniture manufacturers, textile operations, and specialized production facilities serving niche markets.
Understanding what types of projects are eligible for New Market Tax Credits funding begins with recognizing that manufacturing projects align naturally with program objectives. These operations typically create substantial employment in low-income communities, generate significant capital investment through facility construction and equipment purchases, and demonstrate clear community impact through job creation, supply chain development, and economic base strengthening.
NMTC financing commonly supports manufacturing projects requiring capital for facility acquisition or construction, production equipment purchases, technology infrastructure, working capital for startup or expansion phases, and related improvements necessary to commence or expand operations. A manufacturer might use NMTC capital to construct a new production facility, purchase specialized machinery, implement quality control systems, or finance inventory during market expansion.
The capital-intensive nature of manufacturing operations creates financing gaps that NMTC capital effectively addresses. Equipment costs, facility requirements, and working capital needs often exceed what conventional lenders will finance, particularly for businesses in underserved markets where lenders perceive heightened risk. NMTC financing’s below-market rates and flexible terms enable manufacturers to undertake investments that support growth, competitiveness, and long-term sustainability.
Healthcare and Medical Facilities
Healthcare facilities and medical service providers have emerged as major NMTC recipients, reflecting the program’s effectiveness in addressing healthcare access gaps in underserved communities. Eligible healthcare projects span diverse delivery models and specializations including community health centers, federally qualified health centers (FQHCs), dental clinics, specialty care facilities, ambulatory surgery centers, behavioral health treatment facilities, and urgent care centers.
NMTC financing for healthcare projects typically supports facility construction or renovation, medical equipment purchases, health information technology systems, laboratory infrastructure, and operational working capital during startup phases. A community health center might use NMTC capital to construct a new clinic building, equip examination rooms, implement electronic health records systems, and cover operating expenses until patient volumes generate sufficient revenue.
Healthcare projects prove particularly attractive to CDEs because they address critical community needs, create quality employment for medical and administrative staff, serve vulnerable populations, and demonstrate measurable health outcome improvements. The essential nature of healthcare services and the sector’s relative stability even during economic downturns further enhance these projects’ appeal from both community impact and credit risk perspectives.
The NMTC program has proven especially valuable for nonprofit healthcare providers that lack equity capital for major facility investments and face challenges accessing conventional financing. Tax-exempt status doesn’t disqualify organizations from receiving NMTC financing—many successful healthcare projects involve nonprofit operators receiving NMTC capital structured as loans rather than equity investments.
Retail and Commercial Development
Retail projects, particularly grocery stores and supermarkets serving food deserts, represent significant NMTC activity. Understanding what types of projects are eligible for New Market Tax Credits funding includes recognizing the program’s role in bringing essential retail services to underserved communities where market forces alone provide inadequate commercial development.
Eligible retail projects include supermarkets and grocery stores in food deserts, pharmacies providing prescription services, retail centers combining multiple tenants serving community needs, restaurants providing dining options and employment, and specialty retailers addressing specific market gaps. The program generally excludes certain retail categories—liquor stores as principal businesses, and businesses primarily serving luxury or non-essential markets—but accommodates diverse retail formats serving legitimate community needs.
NMTC financing for retail development supports land acquisition, building construction or rehabilitation, store fixtures and equipment, inventory financing, and tenant improvement allowances for anchor tenants. A grocery chain expanding into an underserved neighborhood might use NMTC capital to acquire property, construct a store building, purchase refrigeration equipment and point-of-sale systems, and stock initial inventory.
Mixed-use retail developments combining ground-floor commercial space with upper-floor office or community facility uses frequently utilize NMTC financing for the commercial components. These projects create comprehensive neighborhood improvements addressing multiple community needs through integrated development rather than single-purpose facilities.
Community Facilities and Nonprofit Infrastructure
Community facilities serving educational, cultural, social service, or civic purposes qualify for NMTC financing when operated by entities meeting qualified active low-income community business (QALICB) requirements. Eligible community facility projects include performing arts centers, community centers offering recreation and programming, workforce development training facilities, childcare centers, after-school program facilities, museums, libraries, and facilities supporting nonprofit service delivery.
These projects often involve nonprofit operators providing essential community services without generating substantial revenues. NMTC financing proves particularly valuable for these organizations because the tax credit subsidy enables capital access despite limited revenue-generating capacity. A nonprofit workforce development organization might use NMTC capital to acquire and renovate a facility for training programs, purchase computer equipment, and establish infrastructure supporting program delivery.
Understanding what types of projects are eligible for New Market Tax Credits funding for community facilities requires recognizing that projects must involve active business operations rather than passive property holding. Facilities must support actual service delivery, program operations, or organizational activities rather than merely housing administrative functions or serving as investment properties.
Office Buildings and Commercial Real Estate
Office buildings and commercial properties serving businesses in low-income communities qualify for NMTC financing when structured appropriately. Eligible office projects include multi-tenant office buildings, corporate headquarters or regional offices for businesses serving qualifying markets, medical office buildings housing healthcare providers, professional services facilities, and buildings combining office and retail or community facility uses.
NMTC financing supports office development through property acquisition, new construction, substantial rehabilitation of existing buildings, tenant improvements attracting quality tenants, and infrastructure necessary for modern office functionality. A developer might use NMTC capital to redevelop a historic downtown building into Class A office space, attracting professional services firms, technology companies, and nonprofit organizations serving the community.
Office projects must demonstrate clear community benefit beyond mere real estate development. Projects creating quality employment, housing organizations serving low-income populations, attracting businesses to underserved areas, or catalyzing broader neighborhood revitalization align well with NMTC program objectives. Pure speculative office development without clear community impact would struggle to attract CDE support even if meeting technical eligibility requirements.
Educational Facilities and Charter Schools
Educational facilities including charter schools, vocational training centers, early childhood education facilities, and specialized educational programs qualify for NMTC financing. These projects address critical community needs by expanding educational access, improving facility quality, or providing specialized programs underserved by existing educational infrastructure.
Charter school facilities represent substantial NMTC activity, with financing supporting property acquisition, building construction or renovation, educational technology infrastructure, library and laboratory facilities, and related improvements necessary for school operations. A charter school operator might use NMTC capital to purchase a building, renovate classrooms, install technology systems, and equip science laboratories.
Understanding what types of projects are eligible for New Market Tax Credits funding in education includes recognizing that projects must involve facilities housing active educational operations. Buildings leased to school operators, facilities owned by educational organizations, or properties developed specifically for educational use all potentially qualify depending on structure and QALICB status.
Hotel and Hospitality Development
Hotel projects in economically distressed areas qualify for NMTC financing when they demonstrate community economic development benefits. Eligible hotel projects include limited-service and select-service hotels serving business travelers, convention or conference center hotels supporting economic development, destination hotels catalyzing tourism development, and hospitality facilities supporting broader revitalization strategies.
NMTC financing for hotels supports property acquisition, building construction, furniture and equipment purchases, technology infrastructure, and working capital during startup phases. A developer might use NMTC capital to construct a hotel in a downtown revitalization area, creating construction jobs, permanent employment, and visitor traffic supporting retail and restaurant businesses.
Hotels must demonstrate clear employment benefits, neighborhood revitalization potential, or economic development catalysis to attract NMTC support. Projects creating quality jobs, paying living wages, providing benefits, and supporting local economic activity align with program objectives. Luxury hotels or resorts primarily serving affluent travelers would face challenges securing NMTC financing even if technically located in qualifying census tracts.
Energy and Infrastructure Projects
Renewable energy facilities, energy efficiency improvements, and infrastructure projects supporting community development qualify for NMTC financing. Eligible projects include solar energy installations, wind energy facilities, biomass energy production, combined heat and power systems, energy storage infrastructure, and substantial energy efficiency retrofits in commercial or community facilities.
These projects align with NMTC objectives by creating employment, reducing operating costs for businesses and organizations in low-income communities, demonstrating environmental leadership, and catalyzing green economy development. A community development corporation might use NMTC capital to install solar arrays on nonprofit facilities, reducing energy costs and freeing resources for program expansion.
Understanding what types of projects are eligible for New Market Tax Credits funding in energy includes recognizing that projects must involve substantial capital investment in qualified business property rather than mere equipment leasing or service arrangements. Projects must create lasting infrastructure generating ongoing benefits rather than temporary installations or short-term improvements.
Technology and Innovation Centers
Technology facilities including data centers, research and development facilities, technology incubators, innovation hubs, and manufacturing facilities for technology products qualify for NMTC financing. These projects support economic diversification, create quality employment, attract knowledge workers, and position communities for participation in innovation economies.
NMTC capital supports technology projects through facility construction or renovation, specialized equipment purchases, technology infrastructure, and working capital supporting operations during growth phases. A technology company might use NMTC financing to construct a research facility, purchase testing equipment, and establish infrastructure supporting product development.
Technology projects demonstrate community benefit through job creation in high-wage sectors, skill development opportunities for local residents, attraction of complementary businesses and investments, and economic base diversification away from declining traditional industries. Projects creating career pathways, partnering with educational institutions, or supporting workforce development enhance NMTC attractiveness.
Agriculture and Food System Projects
Agricultural processing facilities, food distribution centers, urban agriculture operations, aquaculture facilities, and food system infrastructure qualify for NMTC financing. These projects support local food systems, create agricultural employment, address food access challenges, and strengthen connections between producers and consumers.
NMTC financing supports agricultural projects through processing equipment, storage facilities, distribution infrastructure, greenhouse structures, aquaculture systems, and related improvements. A food hub might use NMTC capital to construct refrigerated warehouse space, purchase processing equipment, and establish distribution logistics supporting local farmers accessing institutional markets.
Understanding what types of projects are eligible for New Market Tax Credits funding in agriculture includes recognizing that projects must involve substantial capital investment and active business operations. Projects must process, distribute, or produce agricultural products rather than merely owning farmland or providing passive investment in agricultural operations.
Mixed-Use and Comprehensive Development
Mixed-use developments combining multiple project types—retail with office, commercial with community facilities, or diverse uses within integrated developments—frequently utilize NMTC financing. These comprehensive projects create synergies among uses, establish vibrant neighborhood destinations, and maximize community impact through coordinated development.
NMTC capital can finance multiple components within mixed-use developments provided they meet QALICB requirements and substantially-all tests. Developments must carefully structure ownership, operations, and capital deployment to maintain compliance across different use types while optimizing tax credit benefits and community outcomes.
The diversity of eligible project types demonstrates the NMTC program’s flexibility and responsiveness to varied community needs. From manufacturing to healthcare, retail to education, and energy to agriculture, the program accommodates diverse investments that share common characteristics: location in economically distressed communities, substantial capital requirements, meaningful job creation or service delivery, and demonstrated community impact that justifies subsidized financing enabled by the tax credit structure.