New Markets Tax Credit Loans

Investing in Lower-Income Communities

Creating economic opportunity for all means bringing investment to the communities that need it most. That's why we participate in the New Markets Tax Credit (NMTC) program, a federal initiative that encourages investment in lower-income communities.

If your business or project is located in an economically-distressed area, you may be eligible for a NMTC loan. Self-Help's NMTC program helps borrowers finance the purchase, construction and renovation of real property. Some of our borrowers have included charter schools, healthy foods enterprises, green businesses, commercial real estate developers and nonprofits.

How it Works

Under the NTMC program, the federal government allocates tax credits to "Community Development Entities" (CDEs) that have a primary mission of serving low-income communities. CDEs can be nonprofit lenders like Self-Help, subsidiaries of for-profit banks or other kinds of entities. These intermediary organizations exchange the tax credits for equity from private investors and are then obligated to use the dollars to provide financing for businesses and nonprofits in low-income communities. The subsidy provided by the equity portion of any NMTC financing gets passed down to qualifying projects in the form of lower interest rates and more favorable loan terms.

Benefits of NMTC Loans

  • Below-market interest rates
  • Flexible terms like longer amortizations
  • Higher loan-to-value ratios
  • Lower origination fees

Eligibility Requirements

  • All projects must be located in a low-income census tract, defined for the purposes of this program as having either (a) a poverty rate of at least 20% or (b) a median income no more than 80% of area median income.
  • The majority of Self-Help's available funds require projects to be located in areas of "targeted distress," increasing the standard to (a) a poverty rate of at least 30%, (b) a median income no more than 60% of the area median income or (c) an unemployment rate at least 1.5 times higher than the national unemployment rate.
  • Various uses of property are allowed, including office, retail, education, health care and industrial. Rental residential is permitted in some cases.
  • The borrowing entity for a project must also meet certain asset and revenue tests, and some businesses are prohibited from being borrowers or tenants in properties financed through the New Markets Tax Credit program. A Self-Help loan officer will work through these issues with prospective applicants.

To see more details about Self-Help's NMTC loan product for real estate projects, see our NMTC Loans Fact Sheet.

To pre-screen a project address for eligibility, visit Novogradac and Company's online mapping site.

American Tobacco
American Tobacco Campus: a case study of the power of NMTC investments in Durham, NC

Learn More About New Markets Tax Credits

To learn more about the federal NMTC program, visit the New Markets Tax Credit Coalition

Self-Help is a founding member of the coalition which helped enact the NMTC (with bipartisan support) in 2000. Self-Help also issued this report on the NMTC’s effect on Durham and Self-Help’s work on  Durham’s Golden Belt factory redevelopment is highlighted here