The Linwood YMCA
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New Markets Tax Credits
The New Markets Tax Credit (NMTC) program fuels community-impact projects by incentivizing private investment in economically distressed communities.
As a certified Community Development Entity, AltCap has been awarded nearly $250 million in NMTC allocation and has facilitated more than $275 million in NMTC transactions in Missouri and Kansas.
We also provide comprehensive consulting services, ranging from educational sessions and allocation sourcing to transaction management and compliance.
NMTC Consulting Services
With more than 15 years of experience as an award-winning Community Development Entity, AltCap supports businesses, real estate developers and nonprofits leverage New Markets Tax Credit financing.
We offer comprehensive consulting services to assist developers, business owners and their stakeholders at each stage of the process:
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Project evaluation, eligibility and community impact assessment
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Due diligence and NMTC allocation sourcing
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Leverage loan sourcing
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Transaction/finance structuring and negotiation
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Closing process
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Post-closing compliance
How NMTC Works for You
Administered by the CDFI Fund, the NMTC Program spurs investment and economic growth in low-income communities that lack access to capital.
AltCap is a recipient of NMTC allocations from the CDFI Fund, which allows us to provide tax-credit facilitated financing directly to businesses and/or leverage our expansive network of partners to source NMTC allocations from other Community Development Entities (CDEs).
“As complex as it was, it was also a fairly smooth process. … The New Market Tax Credit is the reason we got it done. Without that funding, we weren’t gonna get that project done.”
Kelli McClure, CFO for the YMCA of Greater Kansas City
About New Markets Tax Credits (NMTC)
Vision
We believe the NMTC is a tool that — when used purposefully — can create a transformative ripple that benefits communities. Our goal with NMTC financing is to support job-creating businesses and advance catalytic real estate development projects that promote economic opportunities and enhance neighborhoods.
Investment
AltCap has facilitated $250+ million in NMTC transactions — contributing $213 million in allocation that has been awarded by the CDFI Fund — in Missouri and Kansas. We’ve helped rehabilitate or construct 2.6+ million square feet of real estate, create thousands of jobs, and deliver $65+ million in tax credit equity to 28 borrowers.
Impact
The NMTC Program fuels job-creating business investments and catalytic real estate projects by incentivizing private investors with a federal tax credit. For every $1 in Federal tax credits, the NMTC Program generates $8 of private investment
Details on New Market Tax Credits
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Business Ownership. Applicants can be for-profit or not-for-profit organizations.
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Geographic. The business must be located in a low-income census tract.
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Business type. The business must NOT be in one of the following industries: 1) Gaming, 2) Farming, 3) Liquor Store, 4) Massage Parlor, 5) Golf Course, or 6) Non-mixed-use rental housing.
- Below market interest rate
- No origination fees
- 84-month interest-only payments
- Average LTV of 125%
- Non-traditional collateral: unsecured debt, negative pledge agreements, pledge of membership interest or collateral on non-related assets
- Lower than standard DSCR: 1.0
- Subordination when required by senior sources
Proposed NMTC projects should provide some of the following community impacts:
- Removal of blight, restoration of historic structures, etc.
- Creation of affordable housing and commercial/retail space for small businesses
- Living wage jobs with benefits
- Workforce development/on-the-job training
- Community services provided to low-income people, such as healthcare, childcare, substance abuse treatment, education, etc.
- Commercial goods and services provided to low-income people – healthy food, small business incubation, etc.
NMTC lenders operate on an annual cycle. They receive allocations of tax credits in the Fall/early Winter and look to deploy the credits to eligible projects the following year.
It is never too early to reach out regarding a project’s eligibility and attractiveness for NMTC facilitated financing. Reach out to AltCap CEO Ruben Alonso III at ruben@altcap.org for more information.
New Markets Tax Credit Application
If you have questions prior to submitting your application, please reach out to us at info@altcap.org or fill out the form below.
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