How to Access the New Markets Tax Credits program
There are two ways to access the New Markets Tax Credit program. To fund a single project, you will need to solicit CDEs that currently have an allocation and have an investment strategy that complements your business model and geographic location.
If you have rather large project or a pipeline of projects in need of financing, the best option is to form a CDE and apply directly for an allocation from the New Markets Tax Credit Program.
The New Markets Tax Credit Program can play an important role in revitalizing communities through equity investments resulting in building projects, job creation, and other community development activities that benefit from private investment. The tax incentives realized from making equity investments in distressed communities can be beneficial to a broad spectrum of entities and result in the development of both inner city and rural communities. These contributions make a demonstrable community impact in the form of low income urban centers, retail stores, local small technology firms, inner city shopping centers, and other NMTC projects that utilize NMTC allocation awards.
Equity investments are typically seen in the form of money invested into companies through the purchase of stock shares of that particular company, but they can also include private equity investments into real estate funds or other investment vehicles.
The NMTC program is an incentivizing factor when it comes to community development and economic growth through the use of tax incentives to attract private investments in low-income communities. As of 2020, the NMTC Program has:
- Resulted in approximately $8 of private equity investment for every $1 from federal income tax funding
- Generated over368 million square feet of office space, manufacturing space and retail space
- Assisted in the financing of over 9,500 businesses
NMTC Program applicants must be certified as Community Development Entities by the CDFI Fund. For more information on Community Development Entity Certification and CDFI, please see our CDFI page.
CDE Certification is intended to be utilized by community development financing intermediaries. Any businesses seeking new market tax credits for financing should directly contact CBO Financial.