United States Department of the Treasury - Community Development Financial Institutions Fund
10/28/19 5:00 PM ET Receipt
Opportunity for USA certified Community Development Entities to provide investors in low-income communities with tax credits. Funding is intended to encourage economic growth and community development. Uncertified applicants must submit a certification application prior to applying. These tax credits provide a credit against Federal income taxes for investors that make Qualified Equity Investments (QEIs) in certified financial intermediaries called “Community Development Entities (CDEs).”
Through the NMTC Program, the CDFI Fund allocates tax credit authority to Community Development Entities (CDEs) through a competitive application process. CDEs are financial intermediaries through which private capital flows from an investor to a qualified business located in a low-income community. CDEs use their authority to offer tax credits to investors in exchange for equity in the CDE. Using the capital from these equity investments, CDEs can make loans and investments to businesses operating in low-income communities on better rates and terms and more flexible features than the market.
The NMTC Program has supported a wide range of businesses including manufacturing, food, retail, housing, health, technology, energy, education, and childcare. Communities benefit from the jobs associated with these investments, as well as greater access to community facilities and commercial goods and services.
The NMTC Program helps businesses with access to financing that is flexible and affordable. Investment decisions are made at the community level, and typically 94 to 96 percent of NMTC investments into businesses involve more favorable terms and conditions than the market typically offers. Terms can include lower interest rates, flexible provisions such as subordinated debt, lower origination fees, higher loan-to-values, lower debt coverage ratios and longer maturities.
The CDFI Fund awards a proportional amount of tax credits for investing in Non-Metropolitan Counties.
The NMTC Program provides an incentive for investment in “Low-Income Communities” (LICs). LICs are census
Businesses not located in LICs but that otherwise serve Targeted Populations may also qualify for NMTC-enhanced loans/investment. Targeted Populations include Low-Income Persons (e.g. family income no greater than 80% of the applicable area median family income), to the extent the project is located in a census tract with a median family income at or below 120% of the median family income. Refer to IRS and CDFI Fund guidance for additional details.
GrantWatch ID#: 146449
The CDFI Fund awards a tax credit allocation of $1 million to a CDE.
The CDE offers the tax credit to a single investor in exchange for a $1 million equity investment.
- Generates a $50,000 credit annually for the first three years;
- Generates a $60,000 credit annually for the final four years.
Total credit value over 7 years is $390,000.
The New Markets Tax Credit is taken over a 7-year period.
If awarded an NMTC allocation, CDEs must issue QEIs within 5 years of receiving an allocation.
Before starting your grant application, please review the funding source's website listed below for updates/changes/addendums/conferences/LOIs.
AMIS application system: https://amis.cdfifund.gov/s/AMISHome
Questions regarding New Markets Tax Credit Program may be directed to the CDFI Fund by e-mail to email@example.com; or by phone to (202) 653-0421. Please note this is not a toll free number.
CDE Certification Help Desk Email
IRS Contact (Jian Grant & James Holmes)
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