Tennessee New Markets Tax Credit

The Tennessee NMTC tax program stimulates unique property investments in distressed communities

The Tennessee New Markets Tax Credit program is a federal government aid plan made to incentivize financial commitments into low-income localities, providing around 25% of project expenses in flexible, below market funding that is generally absolved at the end of the 7-year compliance period of time.
Tennessee New Markets Tax Credit

The Tennessee NMTC program encourages investment decisions in distressed areas for economic rejuvenation

NMTC investors make financial investments in organizations referred to as Community Development Entities (CDEs) that subsequently create funds to businesses in low-income communities. The purpose of the solution is to spark desirable economic revitalization in these spots.

A CBO Financial Subsidiary, Community Development Funding, LLC was one of just 66 teams to earn NMTC allotment in Round 1 in 2003, and one of 62 organizations to get an allowance in Round 2 - among just 10 companies to get both 1st and 2nd round allowances. Ever since, the CBO group has actually carried on to acquire extra allowances for our own CDE, and aided numerous clients with starting CDEs and successfully obtaining a direct NMTC allowance award. NMTCs produce rewards to tax credit financiers, companies that require capital, and state and city government and financial advancement bodies.

Tennessee NMTC Financing Structure

Discover the unique perks to applicants, investors, and the US Economic Development Administration (EDA) from the NMTC Program.
States - Municipalities - EDAs
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Borrower Benefits

  • Possible new or additional provider of capital for qualified clients in Tennessee
  • Provide financing when previously not available in Tennessee
  • Lead to accessibility of financing in Tennessee at significantly lower expense than traditional loan providers
  • Result in conversion of up to 30% of Tennessee venture debt to customer equity
Leverage Tax Credits in Tennessee

Tennessee Investor Benefits

  • Tennessee NMTC essentially ensures return of investment plus a return on the financial investment despite customer efficiency
  • Tennessee Investors can even more increase financial investment return and Tennessee project subsidies with additional tax credits (e.g., historic and eco-friendly tax credits).
Facilitate Economic Revitalization in Tennessee

Public Benefits

  • Opportunity to combine public financing with Tennessee tax credits to induce advancement.
  • Prospective extra sources of income to firm as a CDE.
  • Potential favorable economic revitalization in these Tennessee areas.

Essential factors for NMTCs lending for Tennessee

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Troubled Neighborhoods in Tennessee

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

Eligible Tennessee NMTC Program Investments

Investments are made in the form of equity-like financing to organizations found in low-income census systems or ones that primarily serve or mostly use low-income persons.

This financing normally is applied as "space funding" for the development of business, industrial and retail genuine estate jobs (consisting of community centers).

Other NMTC jobs might also include for-sale housing designated for moderate-to-low-income households, sustainable innovations, and sustainable, environmentally friendly innovations running on a commercial scale.

Consulting to Qualify for NMTCs in Tennessee

The Tennessee New Markets Tax Credit (NMTC) application was created by the CDFI Fund, and CBO Financial can help you figure out how well your application may score.

The New Markets Tax Credit program is a federal tax credit that incentivizes organization and genuine estate designers to invest in lower-income locations in Tennessee. A significant part of the application determines whether the Tennessee area served by the advancement is low-income, or underserved in certain unique ways.

Standard qualification for the Tennessee NMTC program requires a property development to be in a census area with earnings at or lower than 80 percent area typical income, or poverty to be higher than 20 percent. (Area median income refers to the typical family earnings of the state, or if the system remains in a Metropolitan Statistical Area with a higher typical household income than the state as an entire, the typical household income of the MSA.).

CBO Financial distributes federal New Markets Tax Credits to energize retail passages, tidy up brownfield areas and reinforce investment plans in housing, local schools and neighborhood services in Tennessee.


There are 2 ways to connect to the program. To money a single task, you will require to obtain CDEs that presently have an allotment and have a financial investment strategy that complements your organization model and geographic location.

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

Important Conditions that should be Be Met by the Customer to be Approved for Tennessee NMTCs

The client must be a verified Active Low-Income neighborhood organization (QALICB), which is a business that satisfies the following guidelines:

  • The borrower is is a corporation for profit or not-for-profit), or a partnership
  • It proactively performs any operations other than residential rental, development, sale or licensing of intangibles, golf course, golf club, massage parlor, jacuzzi center, suntan center, racetrack, off-sale alcohol
  • Less than 5% of its possessions include "antiques" (e.g., antiques, jewelry, white wine, and so on).
  • Less than 5% of its assets include "financial property" (e.g., stocks, bonds, money besides reasonable working capital).
  • 40% of its concrete possessions lie in a low-income neighborhood.
  • 40% of employee services are rendered in a low-income community.

Relevant Information About NMTC in Tennessee



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