The New Markets Tax Credit (NMTC) Program provides critical financing for economic development projects across Vermont’s distinctive communities. From Burlington’s waterfront redevelopment zones to Rutland’s downtown corridors, from St. Albans’s mill districts to Brattleboro’s commercial centers, NMTC financing enables transformative investments in areas where traditional capital markets fall short. CBO Financial partners with Vermont developers, food and beverage producers, advanced manufacturers, healthcare providers, and community organizations to structure financing solutions that strengthen the Green Mountain State’s economy while addressing unique challenges, including small market scale, geographic isolation, seasonal economic fluctuations, and the transition of rural agricultural and manufacturing communities.
Vermont’s distinctive economy—characterized by food and beverage production, tourism and hospitality, advanced manufacturing, renewable energy, agriculture, healthcare, and creative industries—creates substantial opportunities for strategic NMTC deployment. The program offers a 39% federal tax credit to investors who provide capital to qualified projects in low-income communities, significantly reducing borrowing costs and making economically vital projects financially feasible. Whether you’re expanding craft food production facilities, developing healthcare infrastructure in rural counties, creating mixed-use developments in Vermont’s small cities, or building renewable energy manufacturing operations, NMTC financing can provide the capital advantage necessary to move your project forward in Vermont’s unique markets.
How the NMTC Program Works in Vermont
The NMTC Program functions through certified Community Development Entities (CDEs) authorized by the U.S. Treasury’s CDFI Fund to make Qualified Low-Income Community Investments (QLICIs) throughout Vermont. Projects must be situated 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 remaining four years.
Vermont contains eligible geography across its cities, towns, and rural areas. Burlington, the state’s largest city, features qualifying census tracts in various neighborhoods. Rutland, Vermont’s second-largest city, contains substantial eligible geography due to post-industrial economic transition. Other communities, including Bennington, Brattleboro, St. Albans, St. Johnsbury, Barre, and Montpelier, include qualifying tracts. Rural Vermont—particularly the Northeast Kingdom, southern Vermont communities, and agricultural towns throughout the state—presents widespread NMTC opportunities due to territorial consolidation, manufacturing job losses, seasonal employment challenges, and limited economic diversification.
The program supports sectors central to Vermont’s economic priorities: food and beverage production, including specialty foods and craft beverages; advanced manufacturing, including precision machining and aerospace components; healthcare infrastructure, renewable energy projects and clean technology, tourism and hospitality facilities, agricultural processing and value-added facilities, creative industry spaces, and downtown revitalization projects. CBO Financial connects Vermont projects with regional and national CDEs, navigating compliance requirements while ensuring projects advance financial advisory for social impact projects objectives aligned with state economic development goals.
Eligible Projects and Borrowers
Vermont projects eligible for NMTC financing address critical infrastructure and economic development needs across the state’s unique sectors. Food and beverage production projects represent a firm fit given Vermont’s brand strength in specialty foods and craft beverages. Cheese production facilities, craft brewery and cidery operations, distillery facilities, specialty food manufacturing, maple products processing, organic food production, and farm-to-market distribution infrastructure all qualify when located in eligible census tracts and create accessible employment opportunities. Vermont’s reputation for high-quality, artisanal food products creates substantial opportunities for NMTC-financed production facilities.
Advanced manufacturing facilities producing precision-machined components, aerospace parts, medical devices, specialized equipment, and electronics qualify when demonstrating job creation in low-income communities. Vermont’s skilled manufacturing workforce and tradition of quality production support sophisticated operations despite the state’s small scale.
Healthcare infrastructure projects remain critically important given Vermont’s aging population, rural geography, and healthcare provider recruitment challenges. Rural hospital stabilization and modernization, federally qualified health centers, specialty clinics, behavioral health facilities, substance abuse treatment centers addressing Vermont’s opioid crisis, dental clinics, and telehealth infrastructure qualify when serving underserved populations.
Renewable energy and clean technology projects align with Vermont’s environmental leadership and clean energy goals. Solar equipment manufacturing, energy storage systems, biomass energy facilities utilizing Vermont’s forest resources, energy efficiency technology production, and renewable energy installations serving community facilities qualify for NMTC support. Tourism and hospitality facilities leverage Vermont’s significant tourism economy. Hotels and inns in underserved areas, ski resort infrastructure improvements, recreation facilities, cultural centers, and tourism support infrastructure qualify when located in eligible census tracts.
Agricultural processing and value-added facilities support Vermont’s farming economy. Meat processing operations, including mobile slaughter units serving small farms, dairy processing facilities, produce packing and cold storage, value-added agricultural products, and farmers’ market infrastructure, qualify for NMTC financing. Creative industry spaces—including artisan production facilities, craft studios, performing arts venues, and maker spaces—support Vermont’s creative economy.
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 communities like Rutland, Bennington, Brattleboro, St. Johnsbury, Newport, and Springfield leverage NMTC to transform vacant mill buildings and underutilized commercial properties into vibrant mixed-use developments.
Historic building rehabilitation represents a particular opportunity in Vermont, given the state’s inventory of nineteenth and early twentieth-century commercial buildings and mill structures. Combining state and federal historic tax credits with NMTC creates powerful financial structures for adaptive reuse projects, preserving Vermont’s architectural character while creating modern commercial space.
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 through community project financial consulting that combine NMTC with conventional debt, equity, Vermont Economic Development Authority financing, historic tax credits, state and federal agricultural programs, and other complementary sources tailored to Vermont’s unique development landscape.
Benefits of the NMTC Program for Vermont
The NMTC Program delivers substantial economic benefits to Vermont communities while providing borrowers with advantageous financing structures essential in the state’s small, capital-constrained markets. The 39% tax credit significantly reduces effective capital costs, often enabling projects to achieve debt service coverage acceptable to lenders while maintaining operational viability. For capital-intensive projects common in Vermont—food production facilities, healthcare campuses, historic building rehabilitations, and manufacturing plants—this cost reduction frequently determines project feasibility.
Beyond financial mechanics, NMTC investments generate measurable community impact aligned with Vermont’s development priorities. Job creation and retention constitute primary program objectives, with projects committing to creating positions accessible to low-income individuals. In Vermont’s small communities, where even modest job creation carries substantial impact and where younger residents often leave the state for economic opportunities, quality jobs in underserved areas are particularly important for community sustainability.
Vermont’s rural communities and small cities particularly benefit from NMTC’s ability to finance projects serving essential community needs despite limited market scale. A food production facility in the Northeast Kingdom, a healthcare clinic in a rural town, a downtown mixed-use development in Rutland, or a craft beverage facility creating tourism and employment can become feasible through NMTC’s cost reduction.
NMTC projects catalyze significant private investment—each allocation dollar typically attracts multiple additional capital dollars, multiplying the program’s economic effect. This leverage proves especially important in Vermont, where capital availability is constrained and individual projects can meaningfully impact entire communities.
The program provides patient capital with flexible repayment terms. Unlike conventional loans requiring immediate full debt service, NMTC structures often feature interest-only periods during initial years, allowing projects to stabilize operations before principal payments commence. This flexibility proves valuable for projects with seasonal revenue patterns common in Vermont’s tourism and agricultural sectors or those with extended market development timelines. To evaluate your Vermont project’s NMTC potential, launch a free project analysis with CBO Financial’s specialized team.
Regulatory & State Development Framework
Vermont’s economic development infrastructure supports NMTC deployment through various state-level programs and agencies. The Vermont Department of Economic Development, part of the Agency of Commerce and Community Development, administers incentive programs that complement NMTC financing, including the Vermont Employment Growth Incentive (VEGI), Workforce Development Grants, and various industry-specific initiatives. Understanding how to layer these state resources with federal NMTC benefits can significantly enhance project economics.
The Vermont Economic Development Authority (VEDA) provides financing tools, including loans, loan guarantees, and participation financing, that often complement NMTC transactions’ mission-driven approach and understanding of Vermont’s unique markets make it an essential partner for many NMTC projects in the state.
For downtown revitalization projects, the Vermont Downtown and Village Center Tax Credit Program provides substantial state tax credits for the rehabilitation of historic buildings in designated downtown districts. Combining these credits with federal historic tax credits and NMTC creates mighty financial structures for adaptive reuse projects in Vermont’s small cities and towns.
Vermont’s Working Lands Enterprise Initiative supports agricultural businesses and food producers with grants and technical assistance that can complement NMTC financing for food and agriculture projects. The Vermont Housing and Conservation Board provides resources for projects with housing or conservation components.
Regional Development Corporations throughout Vermont—including the Addison County Economic Development Corporation, Brattleboro Development Credit Corporation, Central Vermont Economic Development Corporation, Franklin County Industrial Development Corporation, and others—provide local project support and help navigate state and local programs. Vermont’s close-knit economic development community facilitates coordination across agencies and organizations.
For agricultural projects, the Vermont Agency of Agriculture, Food and Markets, and the University of Vermont Extension provide technical assistance. USDA programs, including Business & Industry Loan Guarantees, Rural Energy for America Program, and Value-Added Producer Grants, often complement NMTC structures for agricultural and rural projects.
CBO Financial ensures projects meet both federal NMTC compliance requirements and Vermont’s state regulatory framework. We coordinate timing between NMTC closing schedules, VEGI applications, VEDA financing approvals, Downtown Tax Credit certifications, local approval processes, and historic preservation reviews. Our understanding of Vermont’s collaborative development culture—where personal relationships and community support often prove as crucial as financial structures—streamlines project execution in the state’s unique environment.
Get Started with NMTC Financing in Vermont
Suppose you’re developing a project in a Vermont low-income community. In that case, whether in Burlington’s waterfront areas, Rutland’s downtown, Northeast Kingdom communities, or rural towns throughout the state, NMTC financing deserves serious consideration. The program’s capacity to reduce capital costs while directing investment to underserved areas makes it uniquely powerful for addressing Vermont’s development challenges, particularly supporting food and agriculture businesses, maintaining viability in small rural communities, and preserving historic downtown districts while creating modern economic infrastructure.
CBO Financial’s process begins with a comprehensive project evaluation: verifying census tract eligibility, analyzing community impact potential, assessing NMTC suitability relative to other financing options, including VEDA and state tax credit programs, and identifying optimal CDE partners with experience in small-market, rural transactions. We then construct customized capital stacks that may combine NMTC with conventional debt, VEDA financing, equity investments, state tax credits, agricultural programs, and other complementary sources.
Vermont clients benefit from our established relationships with CDEs, tax credit investors, and lenders experienced with small-market transactions and Vermont’s unique business environment. We understand Vermont’s distinctive development context—the importance of the food and beverage sector, the challenges of small market scale and seasonal fluctuations, the opportunities in sustainable agriculture and clean energy, the value of historic preservation, and the community-oriented approach essential to successful Vermont projects. This Vermont-specific expertise increases NMTC allocation success rates and streamlines transaction execution.
Project size shouldn’t deter NMTC exploration. While Vermont’s small population means projects are typically more modest than in larger states, transactions ranging from $2 million to $25 million regularly close using creative structuring approaches tailored to Vermont’s markets. The key is early engagement with experienced advisors who understand both NMTC mechanics and Vermont’s specific development landscape. Connect with financial services for community projects professionals at CBO Financial today to discover how NMTC can make your Vermont community development project a reality.