New Markets Tax Credit Program

The New Markets Tax Credit (NMTC) is a federal program that helps provide financing for acquisition, construction, and major rehabilitation of commercial, industrial, community facility, and mixed-use residential developments in low-income communities. NMTC financing is commonly structured as loans with below-market interest rates which may or may not require principal repayment after seven years.

The NMTC is administered by the U.S. Department of Treasury Community Development Financial Institutions (CDFI) Fund. Tax credit investors (often financial institutions) make a one-time, upfront equity contribution in exchange for a future stream of tax credits. These upfront equity contributions are channeled through intermediary lenders certified by the CDFI Fund (Community Development Entities? or CDEs), which provide financing to eligible projects.

The New York City Economic Development Corporation (NYCEDC) facilitates the use of NMTCs for the financing of real estate projects in New York City in the following ways:

Education: NYCEDC educates project sponsors about the program and advises on project eligibility and process. NYCEDC also hosts an annual conference to educate local real estate, non-profit, and other business professionals about the NMTC program.

Deal Facilitation: NYCEDC has a strategic collaboration with United Fund Advisors (UFA) and its affiliate CDE. NYCEDC identifies and/or recommends NMTC-eligible projects based on certain selection criteria including: (1) projects located in a highly distressed low-income community, as defined by the NMTC program statute and regulations; and (2) the presence of a funding gap. Once a project is selected, UFA structures the financing and facilitates the transaction closing. EDC may also provide closing assistance depending on certain project factors.

For more information about this incentive, please contact the New York City Economic Development Corporation using the contact information available below.