New Markets Tax Credit Program

The New Markets Tax Credit (NMTC) is a federal program that helps provide money for buying, building and fixing up buildings in low-income areas. This includes:

• Commercial buildings
• Industrial buildings
• Community centers
• Mixed-use homes

NMTC financing is usually a low-interest rate loan. Sometimes, you don't have to pay back the principal after seven years.

The U.S. Department of Treasury Community Development Financial Institutions (CDFI) Fund runs the NMTC. Investors, often banks, give money to the fund up front in exchange for future tax credits. This money goes through certified lenders called Community Development Entities (CDEs). These lenders then provide financing to eligible projects.

NYCEDC's role

The New York City Economic Development Corporation (NYCEDC) helps others use NMTCs to fund real estate projects in New York City. They do this in the following ways:

• Education: NYCEDC teaches project sponsors about the program. EDC advises on project eligibility and process. They also host an annual conference to educate local real estate, non-profit and other business professionals about the NMTC program.
• Deal facilitation: NYCEDC works with United Fund Advisors (UFA) and its affiliate CDE. It identifies and recommends NMTC-eligible projects. These projects must be in highly distressed low-income communities (as defined by the NMTC program statute and regulations) and have a funding gap. UFA structures the financing and helps close the transaction. NYCEDC may also help with closing.

For more information, please contact NYCEDC.