NMTC

New Markets Tax Credit

Spur private investment in low-income and distressed communities

Credit Amount

39%

Over 7 years

Projects Financed

7,100+

Since 2000

Leverage Ratio

8:1

Private to Federal

Program Details

Established

2000 (Community Renewal Tax Relief Act)

Administered By

U.S. Treasury's CDFI Fund

Credit Structure

39% of Qualified Equity Investment over 7 years (5% for first 3 years, 6% for last 4 years)

Claim Period

7 years

Eligible Projects

Community facilities, businesses, mixed-use real estate in low-income census tracts

Target Beneficiaries

Residents of low-income census tracts

Compliance Requirements

At least 85% of funds invested in qualified projects

Best Use Case

Financing community-serving projects like healthcare, schools, manufacturing

How NMTC Works

1

CDE Receives Allocation

Community Development Entities (CDEs) compete for and receive NMTC allocation from the CDFI Fund.

2

Investor Makes QEI

Investors make Qualified Equity Investments (QEI) into CDEs, receiving tax credits of 39% over 7 years.

3

CDE Deploys Capital

CDEs use the capital to make Qualified Low-Income Community Investments (QLICIs) in eligible projects.

4

Project Receives Financing

Qualified businesses receive below-market financing, typically with significant forgiveness after the 7-year compliance period.

Ready to Explore NMTC for Your Project?

Check your project's eligibility and get matched with CDEs that have available allocation.