New Markets Tax Credit Program

NYC Neighborhood Capital Corporation (NYCNCC) is a federally certified Community Development Entity (CDE) that utilizes the New Markets Tax Credit (NMTC) program to make low-interest and forgivable loans to community development projects in low-income communities in New York City. Typical projects include:

• Schools
• Health care centers
• Community facilities
• Grocery stores
• Industrial buildings
• Mixed-use

The New Markets Tax Credit (NMTC) program is a federal tax credit program administered by the US Department of Treasury Community Development Financial Institutions (CDFI) Fund that is designed to generate private-sector capital investment in low-income communities. 

The NMTC program permits taxpaying investors to receive a credit against federal income tax liability in exchange for making qualified equity investments (QEI) in designated Community Development Entities (CDEs). Substantially, all of the qualified equity investment must in turn be used by the CDE to provide investments to projects and businesses in low-income communities. 

In addition to directly financing projects through capital from NYCNCC, NYCEDC collaborates with a number of national CDEs to identify and help channel capital to qualified low-income community development projects in New York City.

Programs

NMTC QLICI Acquisition and Construction Loans

NYCNCC provides financing for real estate projects, in the form of real estate acquisition and construction loans.  Projects must be impactful community development projects in qualified NMTC low income communities.  General terms for the loans are as follows:

• Size: $8-$10 million per project (mirrors the amount of NMTC allocation provided to the project by NYCNCC)
• Term: 7 years
• Rate: Varies, typically 1-4%
• Amortization: up to 40 years
• Security: flexible and/or subordinate interest in real estate
• Equity equivalent features: loans are split into two notes (A and B notes).  A note is typically 70% of loan principal and must be repaid.  B note is typically 30% of loan principal and is forgivable at end of loan term.  

Technical Assistance

NYCNCC provides guidance to organizations seeking to undertake a NMTC project.  This includes advice on project structure, as well as guidance to additional NMTC resources.

Program Eligibility

Developers of projects requiring acquisition, construction, and major rehabilitation of commercial, industrial, community facility, and mixed-use residential developments in low-income communities are eligible for the NMTC program.

• Developer strength and track record
• Financial feasibility
• Construction timeline
• Community support
• Location: Community Development Financial Institution-qualified NMTC census tracts, as measured by poverty, unemployment, and median family income levels.

Application Process

Interested applicants should reach out to staff at NYCEDC for a preliminary discussion. In general, projects will be asked to fill out NYCNCC's financing application/intake form.  Quality projects will be presented to the NYCNCC Advisory Board and Governing Board for review. If selected, projects go through a 2-3 month closing process.

Selected projects must create quality and accessible jobs, and provide measurable benefits to a low income community in New York City. Projects must also demonstrate financial feasibility, sponsor experience, community support, and a need for public benefits in order to move forward.