The New Markets Tax Credit (NMTC) Program catalyzes essential investment throughout Virginia’s economically diverse communities. From Richmond’s urban neighborhoods to Hampton Roads’s waterfront redevelopment zones, from Northern Virginia’s opportunity corridors to the coal-transition communities of Southwest Virginia, NMTC financing unlocks capital for transformative projects in areas where conventional lending remains insufficient. CBO Financial collaborates with Virginia developers, technology companies, defense contractors, healthcare systems, and community organizations to structure comprehensive financing solutions that strengthen the Commonwealth’s economy while addressing persistent challenges in rural Appalachian communities, tobacco-dependent regions, and urban neighborhoods experiencing economic transition.
Virginia’s multifaceted economy—characterized by federal government operations, defense and cybersecurity, technology, healthcare and life sciences, agriculture, tourism, advanced manufacturing, and international trade—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 cybersecurity operations in Northern Virginia, expanding shipbuilding facilities in Hampton Roads, creating mixed-use developments in Roanoke or Lynchburg, or building healthcare infrastructure in rural counties, NMTC financing delivers the capital advantage necessary for project success in Virginia’s competitive markets.
How the NMTC Program Works in Virginia
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 Virginia. 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.
Virginia contains extensive eligible geography across its metropolitan areas, smaller cities, and rural communities. Richmond features numerous qualifying census tracts throughout the city. Northern Virginia—including parts of Alexandria, Arlington, Prince William County, and other jurisdictions—contains eligible tracts despite the region’s overall prosperity. Hampton Roads cities, including Norfolk, Newport News, Portsmouth, and Hampton, contain substantial eligible areas. Southwest Virginia—particularly coal-region communities in Wise, Buchanan, Dickenson, and Lee Counties—presents widespread NMTC opportunities due to the coal industry’s decline. Southside Virginia’s tobacco-dependent communities also contain extensive eligible geography.
The program supports sectors central to Virginia’s economic priorities: defense and cybersecurity operations, technology and data center facilities, healthcare and life sciences infrastructure, advanced manufacturing, including shipbuilding and aerospace, agricultural processing and value-added facilities, tourism and cultural heritage infrastructure, renewable energy projects, and mixed-use urban developments. CBO Financial connects Virginia projects with regional and national CDEs, navigating compliance requirements while ensuring projects advance infrastructure project funding objectives aligned with the Commonwealth’s economic development strategies.
Eligible Projects and Borrowers
Virginia projects eligible for NMTC financing address critical infrastructure and economic development needs across the Commonwealth’s diverse regions. Defense and cybersecurity projects leverage Virginia’s concentration of military installations and federal contractors. Cybersecurity operations centers, defense contractor facilities, technology operations supporting government agencies, data centers, and secure communications facilities qualify when located in eligible census tracts and create accessible employment opportunities. Virginia’s position as a national defense and cybersecurity hub creates substantial opportunities for NMTC-financed operations.
Technology facilities, including software development centers, data centers, cloud computing operations, artificial intelligence research facilities, and technology innovation spaces, qualify when demonstrating job creation in low-income communities. Healthcare infrastructure projects remain critically important given disparities in healthcare access between Northern Virginia, urban centers, and rural communities. Hospital expansions, federally qualified health centers, specialty clinics, behavioral health facilities, substance abuse treatment centers, rural health clinics, and telehealth infrastructure all qualify when serving underserved populations.
An advanced manufacturing facility, including shipbuilding and ship repair operations in Hampton Roads, aerospace component production, precision machining, advanced materials manufacturing, and defense industry supplies, qualifies when located in an eligible census tract. Virginia’s significant port infrastructure supports international trade and logistics operations. Distribution centers, warehousing facilities, cold storage operations, and trade-related logistics qualify for NMTC support.
Agricultural processing and value-added facilities support Virginia’s diverse agricultural economy. Poultry processing operations, produce packing and distribution, seafood processing leveraging Chesapeake Bay resources, wine production facilities, specialty food manufacturing, and farm-to-market infrastructure qualify when creating jobs in low-income communities. Tobacco-transition projects helping former tobacco-dependent communities diversify their economies represent particularly impactful NMTC opportunities.
Tourism and cultural heritage facilities—including museums preserving Civil War and Colonial history, cultural centers, performing arts venues, and hospitality infrastructure—support Virginia’s significant tourism economy. Renewable energy projects, including solar installations and energy storage systems, align with Virginia’s clean energy transition goals.
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 Petersburg, Danville, Martinsville, Bristol, and Norton leverage NMTC to transform underutilized properties into vibrant mixed-use developments.
Historic building rehabilitation represents a particular opportunity in Virginia, given the Commonwealth’s extensive inventory of historic structures. Combining state and federal historic tax credits with NMTC creates powerful financial structures for adaptive reuse projects throughout Virginia’s cities and towns.
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 the CDFI bond guarantee program that combine NMTC with conventional debt, equity, Virginia Economic Development Partnership incentives, local incentives, historic tax credits, opportunity zone benefits, and other complementary funding sources optimized for Virginia’s development environment.
Benefits of the NMTC Program for Virginia
The NMTC Program delivers substantial economic benefits to Virginia 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 Virginia—cybersecurity operations centers, healthcare campuses, shipbuilding facilities, data centers—this cost reduction frequently determines project viability.
Beyond financial mechanics, NMTC investments generate measurable community impact aligned with Virginia’s development priorities. Job creation remains a central metric, with projects committing to create or retain positions accessible to low-income individuals. In Virginia’s distressed communities—whether in Southwest Virginia coal towns, Southside tobacco communities, or urban neighborhoods in Richmond and Hampton Roads—quality job creation carries substantial importance for economic revitalization and reducing persistent poverty.
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 Virginia’s transitioning regions, where individual projects can substantially impact local economies. A cybersecurity facility creating 100 jobs in Southwest Virginia or a mixed-use development anchoring downtown revitalization in Southside represents a transformative investment at the community scale.
Virginia’s coal-region and tobacco-transition communities particularly benefit from NMTC’s capacity to finance economic diversification projects. Communities that relied on coal mining or tobacco farming for generations now need new economic engines, and NMTC-financed technology centers, advanced manufacturing facilities, healthcare infrastructure, and tourism developments help these communities build sustainable, diversified economies.
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 development timelines or those serving markets with limited immediate revenue potential. To evaluate your Virginia project’s NMTC potential, request project analysis with CBO Financial’s experienced team.
Regulatory & State Development Framework
Virginia’s robust economic development infrastructure strongly supports NMTC deployment through comprehensive state and local programs. The Virginia Economic Development Partnership (VEDP) administers numerous incentive programs that complement NMTC financing, including the Virginia Investment Partnership Grant Program, Major Eligible Employer Grant, Commonwealth’s Development Opportunity Fund, and various industry-specific initiatives. Understanding how to layer these state incentives with federal NMTC benefits can dramatically enhance project economics.
The Tobacco Region Revitalization Commission provides grants and financing for projects in Virginia’s tobacco-dependent communities, creating substantial opportunities to layer these funds with NMTC for projects in Southside and Southside Virginia. The Virginia Coalfield Economic Development Authority administers programs supporting economic transition in Southwest Virginia’s coal region, providing complementary resources for NMTC projects in that area.
Local governments in Virginia offer additional incentives through enterprise zones, technology zones, tax increment financing, and various local programs. Northern Virginia jurisdictions, Hampton Roads cities, and other localities maintain active economic development programs that can enhance NMTC transactions.
For projects involving historic preservation, Virginia’s state historic rehabilitation tax credit program provides substantial financial benefits when combined with federal historic credits and NMTC. The Virginia Department of Historic Resources administers these programs and provides technical review.
Regional economic development organizations—including the Greater Richmond Partnership, Northern Virginia Chamber of Commerce, Hampton Roads Alliance, Roanoke Regional Partnership, and various regional commissions—provide project support and help navigate local incentive programs. GO Virginia regional councils coordinate workforce development and economic development initiatives across nine regions.
The Port of Virginia provides resources for logistics and trade-related projects. Virginia’s community college system offers workforce training through the Virginia Jobs Investment Program and other initiatives, adding value to manufacturing and business expansion projects.
CBO Financial ensures projects meet both federal NMTC compliance requirements and Virginia’s state regulatory framework. We coordinate timing between NMTC closing schedules, VEDP incentive applications, Tobacco Commission or Coalfield Authority funding applications, local approval processes, environmental reviews, and historic preservation reviews where applicable. Our understanding of Virginia’s regional economic development dynamics and relationships with state and regional organizations streamlines project execution across the Commonwealth’s diverse markets.
Get Started with NMTC Financing in Virginia
If you’re developing a project in a Virginia low-income community—whether in Northern Virginia, Richmond, Hampton Roads, Southwest Virginia’s coal region, Southside tobacco communities, or rural areas throughout the Commonwealth—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 Virginia’s development challenges, particularly supporting economic transitions in coal and tobacco regions, defense and technology sector growth, and urban neighborhood revitalization.
CBO Financial’s approach begins with a comprehensive project assessment: verifying census tract eligibility, analyzing community impact potential, evaluating NMTC suitability relative to Virginia’s numerous state and local incentive programs, including Tobacco Commission and Coalfield Authority resources, and identifying optimal CDE partners. We then develop customized capital stacks that may combine NMTC with conventional debt, equity investments, VEDP incentives, regional commission funding, local programs, historic tax credits, opportunity zone benefits, and other complementary sources.
Virginia clients benefit from our established relationships with CDEs, tax credit investors, and lenders highly active in the Commonwealth’s competitive markets. We understand Virginia’s unique development context—the defense and cybersecurity sector’s importance, the Port of Virginia’s logistics advantages, the challenges facing coal-region communities, the opportunities in tobacco-transition areas, and the regional economic development dynamics across Virginia’s diverse geography. This Virginia-specific expertise increases NMTC allocation success rates and streamlines transaction execution.
Project size shouldn’t discourage NMTC exploration. Virginia transactions range from $3 million projects in rural communities to over $100 million developments in Northern Virginia and Hampton Roads, all successfully closing using sophisticated structuring approaches. Early engagement with experienced advisors who understand both NMTC mechanics and Virginia’s specific development environment maximizes success potential. Connect with project funding companies’ professionals at CBO Financial today to discover how NMTC can transform your Virginia community development vision into reality.