The New Markets Tax Credit (NMTC) Program (“the Program”) is an economic development program that aims to encourage investment in low-income areas. Through below market rate, interest only loans, the Program aims to fund worthy projects that have strong community benefit outcomes. The funding may be especially attractive to manufacturing, healthcare, and nonprofit organizations because it 1) provides cash up front to reduce direct costs to the organization and 2) upon completion of a seven-year compliance period, a portion of the loans may be forgiven, thus operating like a grant program. The overall savings to organizations may be 15 to 20% of overall project costs.
The Program is now a permanent fixture of the Internal Revenue Code (IRC) given the July 4, 2025 signing of House Resolution 1 or “the Act,” and what has been referred to as the One Big Beautiful Bill Act (OBBBA). The passage of the Act is a historic milestone for a Program that has been subject to continued reauthorization since its initial passage in 2000 under the Community Renewal Tax Relief Act (P.L. 106–554). The Program was most recently extended under the 2021 Consolidated Appropriations Act and was set to expire at the end of 2025. Now, the Program is permanently authorized for $5 billion in annual allocation authority.
The impact of the NMTC Program is tangible and widespread. According to the Community Development Financial Institutions (CDFI) Fund, for every $1 of federal funding, the NMTC Program generates $8 in private investment1 . Moreover, since 2000, the $81 billion in total Program allocation authority has funded over 8,500 community projects and created more than 1.2 million jobs. The NMTC Program achieves these outcomes by incentivizing the investment of private capital into qualified low-income census tracts. This capital is then used to provide loans and facilitate investments in businesses and projects located in these census tracts.
The NMTC Coalition, in its recent analysis2 , has estimated that over the next 10 years, Program permanency may result in:
- $100 billion in capital invested in underserved regions.
- Support to more than 4,000 businesses and projects.
- Creation of 70,000 rural manufacturing jobs.
- Expanded healthcare choice through more than 700 new or improved facilities.
- $9 billion investments for training and education.
- 435,000 permanent full-time American jobs; and
- Increased housing supply through more than 17,000 affordable homes.
Ready to unlock the full benefits of the NMTC Program? Explore how our team can help you take advantage of this exciting opportunity to drive input in our communities. Contact our trusted NMTC team for any questions or support!