Determining which projects qualify for New Markets Tax Credit (NMTC) financing is crucial for businesses and developers seeking to leverage this powerful economic development tool. The program has supported thousands of diverse projects across the United States, from manufacturing facilities and healthcare centers to grocery stores and mixed-use developments. Understanding the eligible projects for New Markets Tax Credits helps applicants assess whether their proposed venture aligns with program objectives and meets the technical requirements for securing New Markets Tax Credit financing.
Commercial Real Estate Development Projects
Commercial real estate represents a significant category among eligible projects for New Market Credits. Office buildings in low-income communities qualify when they meet location requirements and maintain substantial occupancy by Qualified Active Low-Income Community Businesses (QALICBs).
Retail centers and shopping plazas in underserved areas bring essential goods and services to communities that lack adequate retail infrastructure. Industrial and warehouse facilities supporting distribution, manufacturing, or logistics operations qualify when they create substantial employment. Commercial office buildings housing multiple tenants can be eligible, provided they maintain at least 80 percent occupancy by QALICBs throughout the seven-year compliance period.
Healthcare and Medical Facility Projects
Healthcare facilities are among the most impactful categories of eligible projects for New Market Credits, addressing critical gaps in healthcare access. Community health centers that provide primary care, dental services, behavioral health, and other essential medical services represent ideal NMTCs for healthcare projects.
Hospital and medical center projects in underserved areas qualify when they demonstrate a commitment to serving low-income populations. Dental clinics, behavioral health facilities, and medical office buildings that house multiple healthcare providers all qualify as NMTC projects, creating healthcare hubs that improve access by conveniently co-locating services.
Educational Facility Projects
Educational facilities represent important eligible projects for New Market Credits. Charter school facilities have become one of the most common NMTC project types, with hundreds of charter schools utilizing NMTC financing for new construction or significant renovations. Early childhood education centers, childcare facilities, and vocational training centers that provide job skills training all qualify as NMTC projects.
Manufacturing and Industrial Projects
Manufacturing facilities constitute a crucial category of eligible projects, creating production jobs that often pay living wages with benefits. Food processing and manufacturing plants qualify when located in low-income communities. Advanced manufacturing operations producing machinery, electronics, automotive components, or other manufactured goods represent ideal NMTC projects through the CDFI program.
Light industrial and assembly operations qualify when they create jobs in underserved areas. Research and development facilities engaged in product development can be eligible if they meet the location and operational requirements.
Grocery Stores and Food Retail Projects
Grocery stores and supermarkets are highly valued, eligible projects that address food deserts where low-income residents lack access to fresh, healthy food. Full-service supermarkets qualify when located in underserved areas, typically creating 50 to 200 jobs. Specialty food retailers, ethnic grocery stores, farmers’ markets with permanent facilities, and food halls that house multiple food vendors all qualify for NMTC financing.
Mixed-Use and Community Facility Projects
Mixed-use developments combining multiple uses represent impactful eligible projects. Residential and commercial mixed-use projects with ground-floor retail and upper-floor housing can utilize NMTC financing for commercial components. Live-work developments and transit-oriented developments near public transportation also qualify.
Community centers providing recreational, social service, and educational programming to low-income populations qualify as NMTC projects. YMCA facilities, Boys and Girls Clubs, and similar organizations have utilized NMTC financing. Cultural facilities, including performing arts centers, museums, theaters, and galleries, qualify if they primarily serve low-income communities.
Hospitality, Technology, and Energy Projects
Hotel and lodging projects in low-income communities can qualify when they create employment and support local economic development. Restaurant projects that make significant employment qualify for NMTC support. Technology company facilities, including software development offices, data centers, and innovation labs, qualify for designation as located in low-income communities.
Co-working spaces and business incubators that support entrepreneurship in underserved areas represent innovative eligible projects. Renewable energy projects, including solar installations, wind farms, and biomass facilities, can qualify when they create employment in low-income communities. Telecommunications infrastructure projects that expand broadband access are emerging as eligible projects.
Project Success Factors
Successful eligible projects for New Market Credits share common characteristics beyond mere compliance with technical requirements. Strong community support and demonstrated need increase project attractiveness to Community Development Entities (CDEs). Projects that meaningfully engage community stakeholders and respond to identified needs receive favorable consideration.
The potential for job creation significantly influences project selection. Projects creating substantial employment for low-income community residents align closely with NMTC program objectives. The quality of jobs matters alongside quantity, with projects that offer living wages and benefits viewed favorably. Experienced development teams and sound business fundamentals improve project prospects. Engaging NMTC services professionals helps position proposals effectively.
Conclusion
The diversity of eligible projects for New Market Credits demonstrates the program’s flexibility and broad applicability across industries and community types. From healthcare facilities and charter schools to manufacturing plants and grocery stores, NMTC financing supports projects that create jobs, provide essential services, and revitalize underserved communities. Understanding which projects qualify helps applicants assess fit and position proposals effectively, unlocking this powerful financing tool for community economic development.