New Markets Tax Credits
The New Markets Tax Credit (NMTC) Program was authorized by Congress in December 2000 as part of the bi-partisan Community Renewal Tax Relief Act of 2000 (PL 106-554) and amended through the American Jobs Creation Act of 2004 (PL 108-357). The NMTC was further amended by the Tax Relief and Health Care Act of 2006 (PL 109-432) and extended through 2008. The rule governing NMTC is Section 45(D) of the Internal Revenue Code.
Administered by the CDFI Fund of the U.S. Department of the Treasury, the NMTC Program was created to stimulate investment and economic growth in low-income communities that lack access to the capital needed to support and grow businesses, create jobs, and sustain healthy, local economies. By providing private investors with a federal tax credit, the Program facilitates investments made in job creating businesses or catalytic real estate and economic development projects located in some of the most distressed communities in the nation, i.e. census tracts where the individual poverty rate is at least 20% or where median family income does not exceed 80% of the area median.
Since its inception, the NMTC Program has generated investment in low-income communities across all 50 states, the District of Columbia and Puerto Rico. According to the CDFI Fund, the program has raised more than $31 billion in private capital, leveraging about $8 of private capital for every $1 of NMTC investment in distressed communities.
A survey by the New Markets Tax Credit Coalition found that the program has:
- Helped support more than 15,000 businesses in low-income communities;
- Developed or rehabilitated over 68 million square feet of real estate;
- Created more than 500,000 jobs.
For a short video on how the NMTC Program works, click here.
Financing Your Next Business Investment Or Real Estate Development Project With NMTC
Since 2010 AltCap has provided NMTC facilitated financing for $158 million in investments by family-owned small businesses to social service nonprofits to real estate development entities, all in severely distressed, low-income communities throughout Kansas City, Missouri. Our NMTC portfolio includes a LEED Platinum manufacturing facility (the 7th in the nation) to a repurposed church and school.
AltCap uses its NMTC allocation primarily to help finance operating businesses as well as real estate development entities that are making a significant investment in AltCap's service area. Job-creating capital investments by a business (e.g. facility expansion or equipment / machinery purchase) or catalytic commercial, industrial, mixed-use, or community-driven development projects representing at least $5 million in investment are eligible for nontraditional, flexible financing through the NMTC Program.
AltCap was recently awarded $55 million in NMTC allocation by the CDFI Fund as part of the 14th allocation round; this was AltCap's 5th award since 2008. AltCap will continue to prioritize its allocation to support investments in severely distressed census tracts in Kansas City, Missouri (2018 capital investments or "shovel-ready" real estate development projects will be further prioritized).
To determine if your business investment or real estate development project is located in a qualified census tract, use the following mapping tool:
AltCap deploys its allocation via an RFP process. We will accept applications for NMTC facilitated financing as part of our initial RFP round until 5 PM CST on Monday, March 19.
Use the following link to access AltCap's NMTC application:
If you have any questions about the NMTC Program and/or investment/project eligibility, feel free to contact: