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‚Äôs 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
  • Subordination

For more information about the NMTC program, please contact Mike Santellanes at 602-262-7644 or via email at msantellanes@phoenixida.com.