New Markets Tax Credit Program

Department of Treasury, Community Development Financial Institutions Fund

Program Type:

Tax Incentive

Eligible Geography:

Nationwide

Summary:

The New Markets Tax Credit Program (NMTC Program) awards financial intermediaries known as Community Development Entities (CDEs) with federal tax credit authority that the CDEs offer to private investors in exchange for equity in the CDE that is then invested in economically distressed communities. Investments are provided to Qualified Active Low Income Community Business in these communities via capital, equity, or offered as a loan.

Eligible Recipients:

Financial Institution; For-Profit Business

Eligible Recipients Detail:

Community Development Entity (CDE) certified Community Development Financial Institutions (CDFI)

Eligible Purpose:

Building Connectivity; Last Mile Connectivity; Broadband Enabled Device (General); Anchor Institution Connectivity

Eligible Purpose Detail:

Investments can be used to finance equipment, operations or real estate costs for qualifying businesses. Real estate financing can purchase or rehabilitate retail, manufacturing, agriculture, community facilities (e.g., health services, museums, or charter schools), rental or for-sale housing, or combinations of these. Investments and loans are qualified by business type and location, and not necessarily activity.

Other Eligibility Criteria:

Any investment in a for-profit or non-profit corporation is eligible if: At least 50 percent of the total gross income of that business is derived from the active conduct of its business within any Qualified Low Income Community. A substantial portion (defined as at least 40 percent) of the use of the tangible property of that business (whether owned or leased) is within any Qualified Low-Income Community Investment (QLIC). Substantial portion (defined as at least 40 percent) of the services performed by that business' employees are performed in any QLIC; the business is not primarily holding collectible If 2) or 3) are 50 percent or more, than 1) has been met.

Low-Income Communities, which are Census Tracts, where:

-The poverty rate is at least 20%
-The median family income does not exceed 80% of the area median family income, or 85% in high migration rural counties
-The Census tract has a population less than 2,000 and is within a Federally Designated Empowerment Zone and is contiguoius to at least one other LIC.

Loans can also be provided for Targeted Low-Income Populations outside of LICs.

Source:

https://broadbandusa.ntia.doc.gov/sites/default/files/bbusa_federalfunding_all_200511.pdf