Qualifying for NMTCs

PROJECT TYPES

The types of business investments eligible under the NMTC program are very broad, allowing most real estate projects and operating businesses. Projects can be undertaken by either for-profit or nonprofit entities.

NMTCs cannot be used to finance the following businesses:

• Massage parlor, hot tub, or suntan facility
• Country club or golf course
• Racetrack or other facility used for gambling
• Sale of alcoholic beverages for consumption off premises
• Farming
• Development or holding of intangibles for sale
• Bank, credit union or other financial institution
• A mixed-use property, where less than 20% of its rental revenue is derived from commercial rents.

Projects should have a capital requirement of $2 million to $30 million.

NMTC ELIGIBILTY

For a project to be eligible for New Markets Tax Credits (NMTCs), it must be located in a census tract that has a poverty rate of at least 20 percent and/or a median family income that is at or below 80 percent of the area median family income based on the currently available census data.

Additionally, CEI Capital Management LLC (CCML) can only consider projects that meet the more stringent “targeted distress” criteria. Targeted Distress criteria include a number of indicators of higher community economic distress and include, but is not limited to, the following (based on the currently available census data):

o A poverty rate greater than 30%
o Median family income less than 60% of the area median family income.
o Unemployment rate at least 1.5 times the national average.
o Designated as a distressed by a local or regional agency
o Non-Metropolitan Area

Though not definitive, a useful tool for determining potential eligibility can be found at
http://www.novoco.com/new_markets/resources/ct/.

For questions concerning eligibility, contact CCML Inquiries.