New Markets Tax Credits: How They Work
The New Markets Tax Credit (NMTC) program provides capital for businesses, developers, and non-profits to help make their projects a reality. MoFi works with investors to turn the credits into cash, and then uses that cash to fund catalytic development projects that create jobs and expand community services for low-income people and places.
NMTC project types can include:
- Health Care
- Mixed Use
- Community Facilities
- Commercial Developments
Funding provided through this program works with equity investments and debt financing to create the most flexible capital stack available today. This innovative financing also ensures that important projects receive the capital they need to get to the finish line.
What does this mean in plain English? A qualifying project can receive 18–23% of the financing it needs in the form of a very low interest loan that, ultimately, can be forgiven and would not have to be repaid.
Criteria for NMTC projects:
- (1) Project is in a qualifying census tract, OR (2) Project will mainly hire or serve low-income people
- Project is over $5 million in total project costs
- No more than 80% of the Project’s ongoing revenue will come from housing rental income
- Project can demonstrate it needs NMTC financing assistance
- Project will benefit the community
Please contact us to learn more and find out if your project might qualify for NMTC.