What is the New Markets Tax Credit Program?

From the CDFI Fund Fact Sheet found here, the Community Revitalization initiative throught the NEw Markets Tax Credit Program (NMTC), established in 2000, helps economically distressed communitis attract private capital. How does it do this? As you may have guessed, the answer is: with a federal tax credit. 

How it works?
Through the NMTC Program, the CDFI Fund allocates tax credit authority to Community Development Entities (CDEs) through a competitive application process. CDEs are financial intermediaries through which private capital flows from an investor to a qualified business located in a low-income community. CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. Using the capital from these equity investments, CDEs can make loans and investments to businesses operating in low-income communities on better rates and terms and more flexible features than the market. In exchange for investing in CDEs, investors claim a tax credit worth 39% of their original CDE equity stake, which is claimed over a seven-year period.

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Before delving into this, I recommend reviewing the research reports which can be found here.

Are you thinking about real estate investments in New England NMTC eligible distressed areas? Let's find a time to talk about how I may be able to assist you!