The New Markets Tax Credit (NMTC) Program catalyzes essential investment throughout Pennsylvania’s economically diverse communities. From Philadelphia’s urban neighborhoods to Pittsburgh’s revitalizing corridors, from Erie’s waterfront redevelopment zones to the coal-transition communities of Appalachian Pennsylvania, NMTC financing unlocks capital for transformative projects in areas where conventional lending remains insufficient. CBO Financial collaborates with Pennsylvania developers, life sciences companies, advanced manufacturers, healthcare systems, and community organizations to structure comprehensive financing solutions that strengthen the Commonwealth’s economy while addressing persistent challenges in post-industrial cities and rural Appalachian communities experiencing economic transition.
Pennsylvania’s multifaceted economy—anchored by healthcare and life sciences, advanced manufacturing, energy production, agriculture, technology, logistics, and financial services—creates exceptional opportunities for NMTC deployment. The program provides a 39% federal tax credit to investors who deploy capital in qualified low-income communities, substantially reducing borrowing costs and enabling projects that serve critical community needs. Whether you’re developing biopharmaceutical research facilities in Philadelphia’s University City, expanding precision manufacturing in the Lehigh Valley, creating mixed-use developments in Harrisburg or Allentown, or building healthcare infrastructure in rural counties, NMTC financing delivers the capital efficiency necessary for project success in Pennsylvania’s competitive markets.
How the NMTC Program Works in Pennsylvania
The NMTC Program operates through certified Community Development Entities (CDEs) authorized by the U.S. Treasury’s CDFI Fund to make Qualified Low-Income Community Investments (QLICIs) throughout Pennsylvania. Projects must be located in census tracts where the poverty rate exceeds 20% or the median family income falls below 80% of the area median. Investors providing equity to CDEs receive tax credits totaling 39% over seven years—5% annually for the first three years and 6% annually for the subsequent four years.
Pennsylvania contains extensive eligible geography across its metropolitan areas, smaller cities, and rural communities. Philadelphia, the state’s largest city, features thousands of qualifying census tracts throughout North Philadelphia, West Philadelphia, and surrounding neighborhoods. Pittsburgh contains substantial eligible areas in its Hill District, Homewood, and other neighborhoods experiencing post-industrial transition. Mid-size cities, including Allentown, Erie, Reading, Scranton, and Harrisburg, include significant eligible geography. Rural Pennsylvania—particularly coal-region communities in northeastern and southwestern counties, former steel towns throughout the state, and Appalachian communities—presents widespread NMTC opportunities due to manufacturing and mining industry decline, limited economic diversification, and persistent poverty.
The program supports sectors central to Pennsylvania’s economic priorities: life sciences and pharmaceutical research facilities, advanced manufacturing operations, healthcare infrastructure, technology and innovation spaces, food processing and agricultural value-chain facilities, energy transition projects including renewable energy and abandoned mine reclamation, logistics facilities leveraging Pennsylvania’s strategic location, and mixed-use urban developments. CBO Financial connects Pennsylvania projects with the state’s robust network of regional and national CDEs, many with deep Pennsylvania experience, navigating sophisticated compliance requirements while ensuring projects advance NMTC debt forgiveness objectives aligned with the Commonwealth’s economic development strategies.
Eligible Projects and Borrowers
Pennsylvania projects eligible for NMTC financing address critical infrastructure and economic development needs across the Commonwealth’s diverse regions. Life sciences and pharmaceutical projects leverage Pennsylvania’s concentration of research institutions and pharmaceutical companies, particularly in the Philadelphia region. Laboratory facilities, biomanufacturing plants, clinical research organizations, gene therapy facilities, and medical device manufacturing operations qualify when located in eligible census tracts and create accessible employment opportunities.
Healthcare infrastructure projects remain critically important given disparities in healthcare access between urban centers and rural communities. Hospital expansions and modernizations, federally qualified health centers, specialty clinics, behavioral health facilities, substance abuse treatment centers addressing Pennsylvania’s opioid crisis, and rural health clinics all qualify when serving underserved populations. Pennsylvania’s challenges with rural hospital closures, aging population healthcare needs, and urban health disparities make healthcare facilities particularly compelling NMTC candidates.
Advanced manufacturing facilities represent a strong NMTC opportunity given Pennsylvania’s manufacturing heritage. Precision machining operations, steel and metal fabrication facilities, plastics and chemical manufacturing, robotics and automation equipment production, and food processing equipment manufacturing qualify when demonstrating job creation in low-income communities. The state’s manufacturing workforce and industrial infrastructure support sophisticated production operations.
Food processing and agricultural infrastructure projects support Pennsylvania’s robust agricultural sector. Dairy processing facilities, meat processing operations, specialty food production, mushroom cultivation and processing facilities, and farm-to-market distribution centers qualify for NMTC support. Pennsylvania’s position as a leading agricultural state creates substantial opportunities for value-added processing.
Energy transition projects align with Pennsylvania’s evolution beyond coal dependence. Renewable energy equipment manufacturing, battery storage systems, abandoned mine reclamation projects creating productive use of former mining sites, and natural gas processing facilities qualify when serving community development objectives. Technology and innovation spaces—including incubators, accelerators, research parks, and innovation centers—qualify when spurring economic development in transitioning communities.
Logistics and distribution facilities leverage Pennsylvania’s strategic location between major East Coast markets. Warehousing operations, fulfillment centers, cold storage facilities, and transportation hubs qualify when creating jobs in low-income communities. Educational facilities such as charter schools, early childhood education centers, STEM learning facilities, and workforce training centers address academic needs and qualify for financing.
Downtown revitalization projects in cities like Reading, Allentown, Erie, Scranton, Wilkes-Barre, Johnstown, and York leverage NMTC to transform vacant or underutilized properties into vibrant mixed-use developments. Historic building rehabilitation combining state and federal historic tax credits with NMTC creates powerful financial structures for adaptive reuse projects throughout Pennsylvania’s older cities.
Eligible borrowers include for-profit businesses, nonprofit organizations, and local government entities developing qualified projects. The borrower must demonstrate substantial service to low-income communities and prove that NMTC financing is essential to project feasibility. CBO Financial creates comprehensive capital stacks leveraging CDFI fund resources that combine NMTC with conventional debt, equity, Pennsylvania Department of Community and Economic Development incentives, opportunity zone benefits, historic tax credits, and other complementary funding sources optimized for Pennsylvania’s development environment.
Benefits of the NMTC Program for Pennsylvania
The NMTC Program delivers substantial economic benefits to Pennsylvania communities while providing borrowers with competitive financing terms. The 39% tax credit significantly reduces effective capital costs, often enabling projects to achieve debt service coverage ratios that satisfy lenders while maintaining operational sustainability. For capital-intensive projects common in Pennsylvania—life sciences facilities, advanced manufacturing plants, healthcare campuses, large-scale urban redevelopments—this cost reduction frequently determines project viability.
Beyond financial mechanics, NMTC investments generate measurable community impact aligned with Pennsylvania’s development priorities. Job creation remains a central metric, with projects committing to create or retain positions accessible to low-income individuals. In Pennsylvania’s distressed communities—whether in North Philadelphia, Pittsburgh’s Hill District, Reading’s downtown, or coal-region towns—quality job creation carries substantial importance for breaking cycles of poverty and economic decline that have persisted since industrial and mining job losses.
NMTC projects catalyze significant private investment—each allocation dollar typically attracts multiple additional capital dollars, multiplying the program’s economic multiplier effect. This leverage proves especially important in Pennsylvania’s transitioning communities, where individual projects can substantially impact local economies. A manufacturing facility creating 150 jobs in the Lehigh Valley or a mixed-use development anchoring downtown revitalization in Erie represents a transformative investment at the community scale.
Pennsylvania’s coal region and former steel communities particularly benefit from NMTC’s capacity to finance projects serving essential community needs despite challenging market conditions. Healthcare facilities in Appalachian counties, advanced manufacturing operations in former mill towns, technology incubators in transitioning cities, and downtown revitalization projects become feasible through NMTC’s cost reduction and its attraction of mission-driven investors.
The program provides patient capital with flexible repayment structures. Unlike conventional loans requiring immediate full debt service, NMTC transactions often feature interest-only periods during initial years, allowing projects to stabilize operations before principal payments commence. This flexibility proves valuable for projects with extended lease-up periods or serving markets with limited immediate revenue potential. To evaluate your Pennsylvania project’s NMTC potential, apply for project analysis with CBO Financial’s experienced team.
Regulatory & State Development Framework
Pennsylvania’s sophisticated economic development infrastructure strongly supports NMTC deployment through comprehensive state and local programs. The Pennsylvania Department of Community and Economic Development (DCED) administers numerous incentive programs that complement NMTC financing, including Pennsylvania First, the Redevelopment Assistance Capital Program (RACP), Keystone Innovation Zones, Manufacturing Tax Credits, and various industry-specific initiatives. Understanding how to layer DCED incentives with federal NMTC benefits can dramatically enhance project economics.
The Pennsylvania Industrial Development Authority (PIDA) and Pennsylvania Economic Development Financing Authority (PEDFA) provide additional financing tools, including low-interest loans and tax-exempt bond financing, that may complement NMTC transactions. For projects in opportunity zones—which overlap substantially with NMTC-eligible census tracts—opportunity zone benefits provide additional tax incentives that can be strategically combined with NMTC.
For projects involving historic preservation—common in Pennsylvania’s older industrial cities—the state historic tax credit program provides substantial financial benefits when combined with federal historic credits and NMTC. The Pennsylvania Historical and Museum Commission administers these programs and provides technical review.
Regional economic development organizations—including the Economy League of Greater Philadelphia, Allegheny Conference on Community Development, Greater Lehigh Valley Chamber of Commerce, and various county and municipal development entities—provide project support and help navigate local incentive programs. Ben Franklin Technology Partners supports innovation and technology projects with grants and investments that can complement NMTC structures.
The Appalachian Regional Commission (ARC) provides grants and financing for projects in Pennsylvania’s 52 Appalachian counties, creating opportunities to layer ARC funding with NMTC for projects in much of rural Pennsylvania. For agricultural projects, the Pennsylvania Department of Agriculture can provide connections and technical assistance.
CBO Financial ensures projects meet both federal NMTC compliance requirements and Pennsylvania’s state regulatory framework. We coordinate timing between NMTC closing schedules, DCED incentive applications, including RACP, which has specific deadlines, local approval processes, environmental reviews, and historic preservation reviews, where applicable. Our deep experience with Pennsylvania’s economic development ecosystem—including relationships with DCED regional offices and understanding of local political dynamics—streamlines project execution across the Commonwealth’s diverse markets.
Get Started with NMTC Financing in Pennsylvania
If you’re developing a project in a Pennsylvania low-income community—whether in Philadelphia or Pittsburgh’s urban neighborhoods, mid-size cities throughout the state, Appalachian coal-region communities, or former industrial towns—NMTC financing merits thorough evaluation. The program’s capacity to reduce capital costs while attracting impact-focused investment to underserved areas makes it uniquely powerful for addressing Pennsylvania’s development challenges, particularly supporting economic transitions in post-industrial communities and revitalizing urban cores.
CBO Financial’s approach begins with a comprehensive project assessment: verifying census tract eligibility, analyzing community impact potential, evaluating NMTC suitability relative to Pennsylvania’s numerous other incentive programs, including RACP and opportunity zone benefits, and identifying optimal CDE partners from Pennsylvania’s deep bench of experienced allocatees. We then develop customized capital stacks that may combine NMTC with conventional debt, equity investments, DCED incentives, PIDA/PEDFA financing, opportunity zone benefits, historic tax credits, ARC funding for Appalachian projects, and other complementary sources.
Pennsylvania clients benefit from our established relationships with CDEs, tax credit investors, and lenders highly active in the Commonwealth’s competitive markets. We understand Pennsylvania’s unique development context—the life sciences cluster’s opportunities in Philadelphia, the advanced manufacturing strengths in the Lehigh Valley, the challenges facing coal-region communities, the revitalization dynamics in Pittsburgh, and the regulatory considerations across diverse county contexts. This Pennsylvania-specific expertise increases NMTC allocation success rates and streamlines transaction execution.
Project size shouldn’t discourage NMTC exploration. Pennsylvania hosts some of the nation’s largest and most sophisticated NMTC transactions in markets like Philadelphia and Pittsburgh, while projects ranging from $3 million in smaller communities to over $150 million in major metros regularly close using sophisticated structuring approaches. Early engagement with experienced advisors who understand both NMTC mechanics and Pennsylvania’s specific development environment maximizes success potential. Connect with new market tax credit consulting professionals at CBO Financial today to discover how NMTC can transform your Pennsylvania community development vision into reality.