New Markets Tax Credits

What is the New Markets Tax Credit Program?

The New Markets Tax Credit (NMTC) program was established by Congress in 2000 as a bipartisan initiative to encourage investment in distressed, low-income communities. NMTC investors provide capital to community development entities (CDEs), and in exchange are awarded credits against their federal tax obligations. CDEs develop projects that give new life to neglected urban neighborhoods and rural communities, support local business growth, and create jobs in underserved areas.

New Markets Tax Credit Program

Focused on Those who Need Help Most

Opportunity Fund invests in community service-focused projects with potential to transform low-income communities. These projects are typically located in “targeted distress” (very low-income) census tracts where the poverty rate is 20% or higher, or the median family income is below 80% of the poverty line. We focus on:

  • Nonprofit community facilities

    Nonprofit community facilities providing services often neglected in these neighborhoods, such as education, healthcare, food, and temporary shelter

  • Commercial projects in Native American communities

    Commercial projects in Native American communities generating living wage jobs for tribe members

Our Results:

$342 Million Invested,
Aiding Nearly 400,000 People Annually

To date, our commitments include:

  • $342M*

    Invested in commercial real estate and Native American projects

  • 1.5M sq.ft**

    New or rehabilitated nonprofit community facility spaces financed

  • 400K**

    Low-income clients on an annual basis (approximately)

  • 1,415**

    Construction jobs created or retained for low-income persons

  • 1,600**

    Permanent jobs created or retained for low-income persons. (75% of permanent low-income jobs pay living wages and 89% provide benefits)

* Through 6/30/19

** From FY 2018 surveys

  • New Markets Tax Credit Success Stories

    Los Angeles Family Housing

    Opportunity Fund’s $30.73 million investment gives LA’s homeless a place to call home, while creating 270 full time jobs.

    Read Full Story
    Los Angeles Family Housing
  • New Markets Tax Credit Success Stories

    Ravenswood Family Health Center

    Opportunity Fund contributes $19.9 million to help bring desperately needed health care services to East Palo Alto, an underserved, 98% low-income, 96% minority community.

    Read Full Story
    Ravenswood Family Health Center
  • New Markets Tax Credit Success Stories

    Yurok Tribal Community Forest and Salmon Fishery Preserve

    Opportunity Fund helps the tribe preserve its cultural heritage, strengthen its economy, while protecting its ecosystem and naturally sequestering carbon.

    Read Full Story
    Yurok Tribal Community Forest and Salmon Fishery Preserve
  • New Markets Tax Credit Success Stories

    Compass Family Services

    Opportunity Fund invests $14.2 million to help homeless and at-risk families secure stable housing and health care services.

    Read Full Story
    Compass Family Services

Our Project Criteria

We are always on the lookout for high-impact NMTC-qualified projects. Whether you’re a financial institution, community-focused nonprofit, real estate developer, or other qualified investor, we’d love to hear from you.

Criteria

$5 million minimum project size
Situated in qualified low-income census tracts in the Western United States (California, Oregon, Washington, Montana, Idaho, Nevada, Arizona, Utah, Wyoming, Colorado, New Mexico, Texas, and Hawaii)
Projects involving new construction or substantial rehabilitation of commercial space. Not for most types of housing
Must provide clear and significant benefits to low-income populations, considering the number of low-income clients served as well as construction and permanent jobs created

Locations

Western United States — California, Oregon, Washington, Montana, Idaho, Nevada, Arizona, Utah, Wyoming, Colorado, New Mexico, Texas, and Hawaii — in a "targeted distress" (very low-income) census tract.

Nature of Projects

  • Commercial projects of all types (retail, industrial, office)
  • Housing, both rental and for sale not acceptable, but the commercial portion of a qualified mixed-use project may be eligible
  • Primary focus is for new construction
  • Rehabilitation/reconstruction projects may be acceptable if such improvements add more than 25% to the adjusted basis of the building

Financing Characteristics

  • $5 million minimum project size
  • Major portion of financing already lined up
  • Near-bankable (e.g. strong borrower and project that can succeed with the extra support of NMTC)

Community Benefits

  • Provides for a significant number of “living-wage” jobs to low-income residents, both during construction and after
  • Ideally, provides beneficial products or services needed in the community

Financing Terms

  • Below market rates for 7-year term loans
  • Interest-only loans that result in lower payments
  • Smaller borrower equity requirement than conventional loans
  • Option of debt to equity conversion

Yes, I’m interested in partnering with Opportunity Fund on an NMTC project!