New Markets Tax Credits
for Workforce Facilities

The NMTC for Workforce Facilities tax program stimulates unique investments in low-income areas

The Workforce Facilities New Markets Tax Credit program is a US federal government subsidization tax plan designed to incentivize financial investments into low-income neighborhoods, supplying around 25% of venture expenses in adjustable, below market financing that is generally forgiven at the end of the 7-year compliance duration.

The Workforce Facilities NMTC program encourages financial investments in low-income neighborhoods for financial revitalization

NMTC investors make investments in organizations recognized as Community Development Entities (CDEs) that successively generate loans to companies in low-income communities. The intent of the program is to stimulate favorable economic revitalization in these spots.

A CBO Financial Subsidiary, Community Development Funding, LLC was one of only 66 organizations to get NMTC allotment in Round 1 in 2003, and one of 62 organizations to get an allotment in Round 2 - one of just ten groups to receive both 1st and 2nd round allotments. Considering that then, the CBO team has actually advanced to secure even more allowances for our own CDE, and assisted a wide range of clients with creating CDEs and proficiently requesting a direct NMTC allowance award. NMTCs create rewards to tax credit investors, companies that need to have capital, and state and regional federal government and economic advancement bodies.

Very important considerations for New Market Tax Credits funding for Workforce Facilities

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Workforce Facilities in a Low-Income Community

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

Eligible Workforce Facilities New Markets Tax Credit Funding

Investments are made in the kind of equity-like lending to businesses found in low-income census systems or ones that mainly serve or primarily employ low-income individuals.

This funding generally is used as "space financing" for the advancement of industrial, commercial and retail real estate tasks (including neighborhood centers).

Other NMTC jobs may also consist of for-sale real estate designated for moderate-to-low-income households, eco-friendly innovations, and sustainable, eco-friendly technologies operating on a commercial scale.

Advice to Access NMTCs for Workforce Facilities?

There are 2 methods to get access to the program. To fund a single job, you will need to solicit CDEs that presently have an allowance and have an investment strategy that matches your business design and geographical area.

If you have a somewhat large task or a pipeline of projects in need of funding, the best option is to form a CDE and use directly for an allocation of NMTCs.

What Terms Must Be Adhered to by the Borrower to Qualify for Workforce Facilities NMTC?

The recipient must be a Qualified Active Low-Income neighborhood company (QALICB), which is a company that fulfills the list below criteria:

  • The entity is is a for profit corporation or not-for-profit), or a collaboration
  • It actively carries out any service excluding non-commercial rental, projects, sale or licensing of intangibles, golf course, golf club, massage parlor, jacuzzi facility, suntan center, racetrack, off-sale liquor
  • Fewer than 5% of its properties include "antiques" (e.g., antiques, jewelry, red wine, and so on).
  • Fewer than 5% of its properties consist of "monetary residential or commercial property" (e.g., stocks, bonds, money besides affordable working capital).
  • 40% of its concrete properties are situated in a low-income community.
  • 40% of worker services are provided in a low-income neighborhood.

More Information Workforce Facilities

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Does Your Project Qualify for Low-Cost Financing or New Markets Tax Credits?

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