New Market Tax Credits
The federal New Markets Tax Credit (NMTC) program is designed to stimulate investment in projects that create substantial community impacts in underserved, low-income communities.
The NMTC program attracts capital to low income communities by allowing investors to receive a federal tax credit in exchange for making equity investments in community development entities (CDEs) like the Phoenix Community Development & Investment Corporation.
NMTC financing can provide:
- Commercial real estate gap financing to attract employers creating jobs that are made available to residents of low-income communities
- Gap financing for commercial real estate projects having difficulty securing loans at favorable rates
- Funding to support community redevelopment, particularly within Maricopa county’s most distressed NMTC census tracts
- Nonprofits financial resources to expand services to the disadvantaged communities they serve
Requirements and benefits:
To qualify for the NMTC program, your project must:
- Be located within a federally designated NMTC low income census tract within Maricopa County.
- Seek gap financing of $5 million or more.
NMTC may provide the following favorable terms:
- Below market interest rates
- Lower than standard origination fees
- Longer than standard period of interest-only loan payments
- Higher than standard loan-to-value ratio
- Longer than standard amortization period
- More flexible borrower credit standards
- Non-traditional forms of collateral
- Lower than standard debt service coverage ratio
For more information about the NMTC program, please contact Paul Magallanez at 623-238-1506 or via email at email@example.com.