Established by Congress in 2000 and overseen by the U.S. Department of Treasury, the New Markets Tax Credit program’s (NMTC Program) goal is to drive economic growth through the use of federal tax credits that attract private investment to low-income urban and rural communities throughout the nation. Historically, underserved neighborhoods have had difficulty attracting private investment. The NMTC Program aims to break this cycle by attracting the private investment necessary to reinvigorate struggling local economies and fund projects that might not otherwise be economically feasible. Private capital is incentivized by providing federal income tax credits to investors in exchange for making investments in low-income neighborhoods.

The NMTC Program has become an extremely efficient community economic development tool over the past 25 years. Since 2001, $71 billion in New Markets Tax Credits have been invested in low-income areas nationwide generating more than $143 billion in total capital investment and fueling the construction and rehabilitation of approximately 268 million square feet of commercial real estate and the creation of 1.2 million jobs.

How it Works

Each year, tax credits are awarded by the U.S. Department of Treasury through a competitive application process to companies known as Community Development Entities (CDEs) whose primary mission is to invest in low-income communities. CDEs use their authority to offer tax credits to investors in exchange for private investment into economic development projects in underserved areas. The tax credit provided to investors totals 39 percent of the cost of the investment and is claimed over a seven-year period.  With these capital investments, CDEs can make loans and investments to projects in distressed areas that have better rates, terms, and flexibility than the market. For every $1 invested by the federal government, the NMTC Program has historically generated more than $8 of private investment.  

Since 2016, NYC Regional Community Development, a federally certified CDE, has received eight separate annual tax credit awards totaling $390 million. To receive an award, we were required to demonstrate a mission and track record of providing investment capital and spurring job creation in low-income neighborhoods.