The New Markets Tax Credit (NMTC) program has supported thousands of diverse projects since its inception 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. Understanding what types of projects are eligible for NMTC funding helps developers, business owners, and community organizations identify opportunities and structure appropriate proposals.
Manufacturing and Industrial Facilities
Manufacturing projects represent one of the most common and successful categories of NMTC-financed developments. The program has supported a diverse range of manufacturing operations, including food processing facilities, advanced manufacturing plants, automotive parts suppliers, furniture manufacturers, textile operations, and specialized production facilities serving niche markets.
Manufacturing projects align naturally with program objectives by creating substantial employment in low-income communities, generating significant capital investment through facility construction and equipment purchases, and demonstrating clear community impact. NMTC financing commonly supports facility acquisition or construction, the purchase of production equipment, technology infrastructure, working capital for startup or expansion phases, and related improvements necessary to commence or expand operations.
Healthcare and Medical Facilities
Healthcare facilities have emerged as the primary recipients of NMTCs, reflecting the program’s effectiveness in addressing healthcare access gaps in underserved communities. Eligible healthcare projects encompass a diverse range of delivery models, 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. Healthcare projects prove particularly attractive to CDEs because they address critical community needs, create quality employment opportunities, serve vulnerable populations, and demonstrate measurable improvements in health outcomes.
Retail and Commercial Development
Retail projects, particularly grocery stores and supermarkets serving food deserts, represent a significant source of NMTC activity. Eligible retail projects include supermarkets and grocery stores in food deserts, pharmacies offering prescription services, retail centers featuring multiple tenants that serve community needs, and restaurants providing dining options and employment opportunities.
NMTC financing for retail development supports land acquisition, building construction or rehabilitation, store fixtures and equipment, inventory financing, and tenant improvement allowances. A grocery chain expanding into an underserved neighborhood might use NMTC capital to acquire property, construct a store building, purchase refrigeration equipment, and stock initial inventory. Working with experienced CDFI organizations helps retailers navigate qualification requirements.
Community Facilities and Nonprofit Infrastructure
Community facilities serving educational, cultural, social service, or civic purposes qualify for NMTC financing when operated by entities that meet the requirements of a qualified active low-income community business (QALICB). 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, and libraries.
These projects often involve nonprofit operators providing essential community services without generating substantial revenues. NMTC financing proves particularly valuable because the tax credit subsidy enables access to capital despite limited revenue-generating capacity. Projects must involve active business operations rather than passive property holding—facilities must support actual service delivery or program operations.
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, and buildings combining office and retail or community facility uses.
Office projects must demonstrate clear community benefit beyond mere real estate development. Projects that create quality employment opportunities, housing organizations serving low-income populations, businesses that attract to underserved areas, or initiatives that catalyze broader neighborhood revitalization align well with the NMTC program objectives. Examining successful NMTC projects provides insights into effective office development structures.
Educational Facilities and Charter Schools
Educational facilities, including charter schools, vocational training centers, early childhood education centers, and specialized academic programs, are eligible for NMTC financing. 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.
Projects must involve facilities housing active educational operations. Buildings leased to school operators, facilities owned by academic organizations, or properties explicitly developed for educational use all potentially qualify, depending on structure and QALICB status.
Hotel and Hospitality Development
Hotel projects in economically distressed areas qualify 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 that support economic development, and hospitality facilities that support broader revitalization strategies.
Hotels must demonstrate clear employment benefits, neighborhood revitalization potential, or economic development catalysis to attract NMTC support. Projects that create quality jobs, pay living wages, provide benefits, and support local economic activity align with program objectives.
Energy, Technology, and Agricultural Projects
Renewable energy facilities, technology centers, and agricultural processing facilities also qualify for NMTC financing. Eligible projects include solar energy installations, wind energy facilities, data centers, research and development facilities, technology incubators, agricultural processing facilities, food distribution centers, and urban agriculture operations.
These projects align with NMTC objectives by creating employment, reducing operating costs for businesses in low-income communities, supporting economic diversification, and strengthening local food systems. Projects must involve substantial capital investment in qualified business property and active business operations rather than passive holdings. Expert NMTC services help determine qualification for specialized project types.
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.
Common Qualifying Characteristics
The diversity of eligible project types demonstrates the NMTC program’s flexibility and responsiveness to the varied needs of different communities. 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.
To explore whether your project qualifies for NMTC financing and how to structure an optimal application, request a project evaluation from experienced community development finance professionals who can assess eligibility and guide you through the qualification process.