New Markets Tax Credits
In 2000, as part of the Community Renewal Tax Relief Act, Congress established the New Markets Tax Credit Program with the goal of attracting new investment capital to disadvantaged communities. By making investments in Community Development Entities, whose primary mission is providing capital for low income community builders, investors receive Federal tax credits over a seven year period. Through a competitive process, certified CDEs are awarded allocations -the authority to raise capital- by the Community Development Financial Institutions Fund through the Department of the Treasury. Upon receiving these allocations, CDEs partner with investors to raise the predetermined capital, and with borrowers who will invest in the communities by building homes, developing businesses, and bringing much-needed services to these communities.
How does it all work? What do the terms mean? Learn more in our New Markets Tax Credits Basics.