Smith NMTC Associates, LLC closed on a $9M New Markets Tax Credit (NMTC) transaction with Indianapolis Neighborhood Housing Partnership, Inc. (INHP) to build approximately 40 homes in the distressed communities of Marion County. The deal closed in mid-January and continues the work initiated in 2017 with an earlier NMTC allocation of $5M. Both transactions were structured and closed in partnership with the tax credit investor, U.S. Bancorp Community Development Corporation and the Community Development Entity, The Housing Partnership Network.
Smith NMTC structured the transaction and will support INHP with financial and compliance consulting services. INHP offers education and resources, including financial counseling, to low- and moderate-income prospective homebuyers in Indianapolis, helping them overcome barriers to homeownership. For more than 30 years, INHP has invested in community development activities that benefit Indianapolis neighborhoods and residents by increasing affordable and sustainable housing opportunities. With $9M in New Markets Tax Credits, this project will address need in seven highly distressed communities where specific tracts have been identified to address blight and abandonment. At least 20 percent of the homes will be sold to buyers earning less than 80 percent of the area median income (AMI). The remaining inventory will be available to buyers earning up to 120 percent AMI.
According to Howard Smith, principal of Smith NMTC, “One of many effects of the pandemic has been an increase in the cost of construction materials. The resulting increase in homebuilding costs has made it even more difficult for developers to offer homes for sale at prices affordable for low-income buyers.” Explaining the impact of tax credit financing, he offered, “New Markets Tax Credits enable organizations like INHP to finance the construction of new homes and make them available at price points that are affordable for buyers in specific communities. Through this allocation, INHP will significantly increase the number of affordable homes in Marion County and create new homebuying opportunity for low- and moderate-income residents.”
Smith NMTC Associates, LLC is a St. Louis-based business that works with nonprofits, investors, and other organizations to leverage tax-credit financing to cultivate private investment in distressed communities. Through our unique affordable for-sale housing model leveraging New Markets Tax Credits, we have worked with partners in 30 states and the District of Columbia to generate more than 4,000 new and rehabbed affordable homes for sale in qualified low-income communities.