New Jersey New Market Tax Credit

The New Jersey NMTC tax program increases unique investment options in distressed localities

The New Jersey New Markets Tax Credit program is a federal government assistance program created to incentivize investment decisions into low-income places, generating roughly 25% of plan costs in adjustable, under market funding that is typically forgiven at the end of the 7-year compliance period.
New Jersey New Markets Tax Credit

The New Jersey NMTC program facilitates investments in distressed communities for financial rejuvenation

NMTC investors make financial investments in business recognized as Community Development Entities (CDEs) that subsequently create funds to companies in low-income areas. The intent of the solution is to stimulate constructive economic revitalization in these local areas.

A CBO Financial Subsidiary, Community Development Funding, LLC was among just 66 teams to be given NMTC allocation in Round 1 in 2003, and one of 62 organizations to be given an allocation in Round 2 - among only ten companies to get both 1st and 2nd round allowances. Considering that then, the CBO group has carried on to secure increased allocations for our own CDE, and aided a wide range of clients with setting up CDEs and successfully getting a direct NMTC allocation award. NMTCs create benefits to tax credit investors, businesses that need capital, and state and local federal government and economic development authorities.

New Jersey NMTC Program Outline

Review the unique perks to recipients, investors, and the US Economic Development Administration (EDA) from the NMTC Program.
States - Municipalities - EDAs
Build Communities in New Jersey

Borrower Benefits

  • Possible brand-new or extra supply of funding for certified clients in New Jersey
  • Provide money where formerly not available in New Jersey
  • Lead to accessibility of capital in New Jersey at substantially lower expense than traditional lending institutions
  • Lead to conversion of up to 30% of New Jersey project debt to customer equity
Leverage Tax Credits in New Jersey

New Jersey Investor Benefits

  • New Jersey NMTC essentially guarantees return of financial investment plus a return on the financial investment regardless of customer efficiency
  • New Jersey Financiers can further increase investment return and New Jersey project subsidies with extra tax credits (e.g., historical and renewable tax credits).
Facilitate Economic Revitalization in New Jersey

Public Benefits

  • Opportunity to combine public financing with New Jersey tax credits to cause development.
  • Prospective extra sources of revenue to agency as a CDE.
  • Prospective favorable financial revitalization in these New Jersey areas.

Very important points to consider for New Markets Tax Credit financing for New Jersey

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Marginalized Neighborhoods in New Jersey

A low-income neighborhood is a census region with a minimum of 20% hardship, or one that has a typical family earnings that is at or below 80% of the neighborhood's mean household earnings.

Eligible New Jersey NMTC Funding

Investments are made in the kind of equity-like lending to companies found in low-income census systems or ones that predominantly serve or mainly utilize low-income persons.

This financing usually is applied as "space financing" for the development of industrial, commercial and retail realty jobs (consisting of community facilities).

Other NMTC projects may also include for-sale real estate designated for moderate-to-low-income families, eco-friendly technologies, and sustainable, environmentally friendly technologies running on a commercial scale.

How to Qualify for New Jersey NMTC Programs

The New Jersey New Markets Tax Credit (NMTC) application was produced by the CDFI Fund, and CBO Financial can assist you determine how well your application might score.

The New Markets Tax Credit program is a federal tax credit that incentivizes business and real estate designers to purchase lower-income locations in New Jersey. A major part of the application figures out whether the New Jersey location served by the development is low-income, or underserved in particular distinct ways.

Standard eligibility for the New Jersey NMTC plan needs a development to be in a census zone with earnings at or lower than 80 percent area average income, or poverty to be greater than 20 percent. (Area average income describes the mean family earnings of the state, or if the tract is in a Metropolitan Statistical Area with a greater mean family income than the state as an entire, the median household income of the MSA.).

CBO Financial syndicates federal New Markets Tax Credits to vitalize retail areas, tidy up brownfield locations and strengthen investment in housing, schools and area services in New Jersey.


There are two ways to connect to the program. To money a single job, you will need to obtain CDEs that presently have an allowance and have a financial investment strategy that matches your service design and geographical area.

If you have a relatively large project or a pipeline of tasks in requirement of financing, the best option is to form a CDE and apply straight for an allocation of NMTCs.

Important Conditions that have to Be Fulfilled by the Investor to be Approved for New Jersey NMTC

The borrower needs to be a verified Active Low-Income Community Business (QALICB), which is a business that fulfills the list below requirements:

  • The borrower is is a for profit corporation or not-for-profit), or a partnership
  • It proactively carries out any business excluding non-commercial rental, projects, sale or licensing of intangibles, golf course, golf club, massage parlor, hot tub center, suntan center, racetrack, off-sale alcohol
  • Less than 5% of its properties include "antiques" (e.g., antiques, precious jewelry, red wine, etc).
  • Fewer than 5% of its properties include "financial residential or commercial property" (e.g., stocks, bonds, money besides sensible working capital).
  • 40% of its tangible properties are located in a low-income neighborhood.
  • 40% of worker services are rendered in a low-income neighborhood.

Get More Information Concerning NMTC Programs in New Jersey



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