New Markets Tax Credits

1
New Markets Tax Credits

• Authorized by the U.S. Treasury CDFI
• A Community Development Entity (CDE), certified
  by CDFI, receives and administers tax credits
• Tax credits are incentives to investors to take
  the credits to offset federal income taxes on
  their return on investment
• A business entity secures a loan from the CDE for
  a proposed development Qualified-Equity
  Investment (QEI)
• The Business entity applies to the CDE and CDE
  packages application responding to Notice of
  Allocation Availability (NOAA)

2

• The CDE secures cash to lend to the Business
  Entity to develop the project.
• The Mortgage is tied to the land
• Business Site Leases on trust lands must
  provide for an encumbrance to expedite the loan.
• Development takes place
• the investors (syndication) will require audits
  of the facilities operation
• to insure that their investment is properly
  managed and safe over the 7 year period
  (5556666gt39).

3
New Markets Tax Credits
Investors
Grants
Mechanism through which New Markets Tax Credits
are secured at 39 over 7 years. Investors get a
tax break on returns per year (5556666)
Own
CDE
Total Project Budget