Colorado New Market Tax Credits

The Colorado NMTC funds stimulates unique ventures in distressed neighborhoods

The Colorado New Markets Tax Credit program is a US federal government subsidy tax plan developed to incentivize financial commitments into low-income neighborhoods, producing around 25% of program costs in versatile, under market financing that is generally eliminated at the end of the 7-year compliance period.
Colorado New Markets Tax Credit

The Colorado NMTC program motivates investment decisions in distressed neighborhoods for financial rejuvenation

NMTC investors make financial commitments in organizations referred to as Community Development Entities (CDEs) that successively provide funding to organizations in low-income neighborhoods. The objective of the program is to spur desirable economic revitalization in these spots.

A CBO Financial Subsidiary, Community Development Funding, LLC was one of just 66 organizations to get NMTC allotment in Round 1 in 2003, and one of 62 organizations to receive an allotment in Round 2 - one of only ten groups to receive both 1st and 2nd round allocations. Ever since, the CBO group has actually moved on to secure increased allotments for our own CDE, and helped many different clients with setting up CDEs and effectively making an application for a direct NMTC allocation award. NMTCs develop rewards to tax credit financiers, organizations that need capital, and state and city government and economic advancement bodies.

Colorado New Markets Tax Credit Lending Outline

Learn about the specific benefits to applicants, investors, and the US Economic Development Administration (EDA) from the NMTC Plan.
States - Municipalities - EDAs
Build Communities in Colorado

Borrower Benefits

  • Prospective brand-new or extra provider of financing for qualified borrowers in Colorado
  • Offer financing when formerly unavailable in Colorado
  • Lead to availability of capital in Colorado at significantly lower expense than standard loan providers
  • Result in conversion of up to 30% of Colorado project debt to borrower equity
Leverage Tax Credits in Colorado

Colorado Investor Benefits

  • Colorado NMTC essentially ensures return of investment plus a return on the financial investment regardless of debtor efficiency
  • Colorado Investors can further increase financial investment return and Colorado project subsidies with extra tax credits (e.g., historical and eco-friendly tax credits).
Facilitate Economic Revitalization in Colorado

Public Benefits

  • Chance to combine public financing with Colorado tax credits to cause development.
  • Potential extra sources of revenue to agency as a CDE.
  • Possible favorable financial revitalization in these Colorado areas.

Significant factors for NMTC Programs financing for Colorado

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Impoverished Colorado Communities

A low-income community is a demographic zone with a minimum of 20% poverty, or one that has an average family earnings that is at or below 80% of the community's mean household earnings.

Qualifying Colorado New Markets Tax Credit Investments

Investments are made in the form of equity-like loans to companies situated in low-income census tracts or ones that predominantly serve or mostly employ low-income persons.

This financing generally is used as "gap funding" for the development of commercial, commercial and retail real estate tasks (including neighborhood facilities).

Other NMTC tasks may also include for-sale real estate designated for moderate-to-low-income families, renewable innovations, and sustainable, eco-friendly innovations operating on a business scale.

Plan to Qualify for Colorado NMTCs

The Colorado New Markets Tax Credit (NMTC) application was developed by the CDFI Fund, and CBO Financial can assist you figure out how well your application will be rated.

The New Markets Tax Credit program is a federal tax credit that incentivizes business and property designers to invest in lower-income locations in Colorado. A huge part of the application determines whether the Colorado location served by the advancement is low-income, or underserved in certain distinct manners.

Fundamental approval for the Colorado NMTC program needs a development to be in a census region with income at or lower than 80 percent location mean earnings, or hardship to be higher than 20 percent. (Area average earnings describes the median family income of the state, or if the tract remains in a Metropolitan Statistical Area with a higher median family income than the state as a whole, the average family earnings of the MSA.).

CBO Financial distributes federal New Markets Tax Credits to stimulate retail passages, tidy up brownfield zones and enhance investment projects in real estate, schools and community services in Colorado.


There are 2 methods to access the program. To money a single task, you will require to get CDEs that currently have an allocation and have an investment method that complements your organization design and geographical location.

If you have a somewhat large job or a pipeline of jobs in need of funding, the very best option is to form a CDE and use straight for an allotment of NMTCs.

What Prerequisites to be Be Completed by the Borrower to be Approved for Colorado NMTCs

The client must be a verified Active Low-Income neighborhood Business (QALICB), which is a business that satisfies the list below qualifications:

  • The borrower is is a corporation for profit or nonprofit), or a collaboration
  • It proactively performs any business with the exception of residential rental, property development, sale or licensing of intangibles, golf course, golf club, massage parlor, jacuzzi center, suntan facility, racetrack, off-sale liquor
  • Fewer than 5% of its properties include "antiques" (e.g., antiques, jewelry, white wine, etc).
  • Fewer than 5% of its assets consist of "financial home" (e.g., stocks, bonds, money besides sensible operating capital).
  • 40% of its tangible assets lie in a low-income community.
  • 40% of staff member services are provided in a low-income neighborhood.

Learn More Regarding NMTCs in Colorado



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