New Markets Tax Credits

The New Markets Tax Credit (NMTC) program was established to stimulate investment opportunities for not-for-profits, operating businesses and real estate projects located in low-income communities. Community Development Entities (CDEs) apply annually to the U.S. Treasury Department for delegated authority to sell these federal tax credits. The proceeds from that sale are then used to fund investments, typically structured as low interest rate loans, in qualifying businesses or commercial real estate developments.

NMTCs were not designed to be a primary source of funding, but they can be an excellent option to fill a gap in funding for projects that make economic sense. NMTC net proceeds can fund up to 20-25% of a project and are paired with capital campaign proceeds, owner equity, borrowed funds or other available tax credits and incentives.

Our NMTC professionals work closely with owners, developers, community leaders, lenders, investors, and CDEs to optimize a project’s approach to capital while ensuring compliance, mitigating risk and maintaining transparency for key stakeholders.