Clarksville,United States – March 18, 2022 —
The U.S. Treasury Department is expected to award $5 billion in new authority under the New Markets Tax Credit program to approximately 100 intermediaries late in 2022. These intermediaries, known as Community Development Entities (CDEs), then seek to provide flexible gap financing to high-impact projects in distressed communities that cannot secure adequate capital from conventional sources. There are two ways to access NMTCs; apply directly to the U.S. Treasury Department for a pipeline of projects, or appeal to CDEs that have credits available for individual projects. The NMTC program is authorized through 2025 with $5 billion awarded annually on a competitive basis; applications for the 2022 round are expected to open in the fall, however individual projects can apply to CDEs year-round.
The $95 billion NMTC program is intended to spur investment in low income communities that would not otherwise occur by providing up to 25% of a project cost in very flexible financing, which is typically forgiven at the end of a seven-year compliance period. CDEs compete annually for authority under the program; there are currently more than $6 billion in unallocated credits on the market, including $5B that was awarded on September 1, 2021. Eligibility for the program is based on location; the minimum requirement is the Census Tract where a project is located must have at least a 20% poverty and/or median family income that is 80% or less than area income; however, 75% of NMTCs are typically reserved for “Severely Distressed” areas with higher poverty and lower income (>30% and <60% respectively). In addition, 20% of credits are reserved by statute for projects located in “Non-Metro” Census Tracts, and further restrictions are placed on a case by case basis for “Targeted States,” which includes Arizona, California, Colorado, Florida, Nevada, North Carolina, Tennessee, Texas, Virginia, and West Virginia, and the U.S. Territories including Puerto Rico and the Island Territories of USVI, American Samoa, Guam, and the Northern Mariana Islands. For more information about the New Markets Tax Credit program, please visit https://cbofinancial.com/services/new-markets-tax-credit/.
CBO Financial, Inc. is a sophisticated financial consulting firm that has a mission to revitalize communities and populations in need by pairing innovative technologies with creative financing structures. CBO has long experience in the federal New Markets Tax Credit industry, which is designed to incentivize investment in the nation’s most distressed communities. The U.S. Treasury Department has awarded CBO Financial’s subsidiary, Community Development Funding, LLC, with $150M in authority under the NMTC program in six separate awards, one of only a few dozen organizations in the country to have received six or more awards.
CBO received awards in the first (2003) and second rounds, meaning the team has been deeply involved since the program’s inception. In addition, CBO has taken a leadership role in securing 18 additional direct NMTC allocations for clients totaling $405M and has placed $250M in transactions with CDEs for clients. CBO’s goal has always been to contribute to the rebuilding of low-income neighborhoods by providing outside investment and project management for the development of facilities that help to attract new businesses and create jobs—transforming communities and the lives of people who call them home. CBO Financial, Inc. is headquartered in Clarksville, Maryland. For more information about CBO Financial, please visit https://cbofinancial.com.
Contact Info:
Name: Jamie Badgley
Email: Send Email
Organization: CBO Financial
Address: 7125 Chardon Ct, Clarksville, MD 21029, United States
Phone: +1-410-730-0490
Website: https://cbofinancial.com/
Source: PressCable
Release ID: 89070897
