New Markets Tax Credit (NMTC) Program

10/27/2006: Sample letter to Members of Congress in support of extending the NMTC

The New Markets Tax Credit (NMTC) Program, administered by the CDFI Fund of the Department of Treasury, provides tax credits for up to $15 billion of new private sector investment in economically distressed communities through certified Community Development Entities (CDEs). Through a competitive allocation procedure, the CDFI Fund awards tax credits based on submissions of Allocation Applications, as detailed in the Notice of Allocation Availability. Under the FY2006 NMTC Program 63 organizations were selected to receive tax credits for $4.1 billion in investments (press release).

Four types of activities by CDEs are possible when utilizing the NMTC credits:

Making investments in or loans to qualifying businesses;
Providing financial consulting to businesses and residents of low income communities;
Making investments in or loans to other CDEs which then make investments in, loans to, or provide financial consulting to qualifying businesses; and
Purchasing loans from CDEs

Please use the following links for more information. If after reviewing this information you have any questions or comments regarding these programs, you may contact us at cdvca@cdvca.org.

Click on the following links to see Challenges of the NMTC with Venture Capital and Improving the NMTC for Venture Capital articles written by CDVCA for the December 2002 and January 2003 Novogradac & Co. NMTC Report.

CDFI Fund NMTC Web Page