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
  • Subordination

Funded Projects

PCDIC received NMTC allocation awards in 2002, 2008, and 2010. PCDIC awarded approximately $263 million of those funds to dozens of projects in Phoenix’s underserved communities. For more information about those projects, visit our Funded Projects page.

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