Things you need to know about New Markets Tax Credit financing
The Center works with Community Development Entities such as CEI Capital Management and the Massachusetts Housing Investment Corporation to make tax credits available under the NMTC Program.
To be eligible to receive NMTC financing through the Center’s program, a project must be substantially focused in an eligible geographic area (as defined by income levels), and promote economic development, create community benefits, and be consistent with sustainable environmental principles.
The Center identifies potential projects, contacts an appropriate Community Development Entity that has been awarded the authority to issue tax credits by the U.S. Treasury Department, and works closely with all parties to put the transaction together. Depending on the project, Center services may involve:
- Explaining the NMTC Program, and answering questions about it
- Reviewing options for how NMTC financing could be used to enhance or facilitate a project
- Helping to structure mission-related objectives to satisfy program criteria
- Bringing in additional deal partners if needed to complete the project
- Helping to structure the project and financing
- Assisting in analyzing the financial elements of the project and the value of NMTC financing
- Assisting in securing financial institutions to invest in the project through purchase of tax credits to provide the desired subsidy and/or to provide debt
- Assisting as appropriate in negotiations with various parties to make the deal work
- Working with Community Development Entities as needed to help secure approval of the project and its financing
- Assisting as needed during the closing process