New Markets Tax Credits
For larger projects, Community First Fund also provides financing through the New Markets Tax Credit Program. This federal program provides tax credits to banks that provide financing to large scale commercial real estate or mixed use projects located in targeted low income neighborhoods. The New Markets Tax Credit Program was designed by Congress to increase the supply of capital to businesses that operate in low income neighborhoods and to help transform these neighborhoods by providing new jobs for community residents and helping to revitalize neighborhoods. The program works by providing modest tax credits to investors such as banks and other investment entities who provide loans and equity to large scale real estate projects in targeted neighborhoods.
For examples of projects that received New Market Tax Credits please see our Client Success Stories.
Is your project eligible for New Markets Tax Credits?
Community First Fund serves as the recipient for New Markets Tax Credits. We work with project developers and investors in our region to structure projects. In all cases, the New Markets Tax Credits provide the necessary capital to projects that would not otherwise have enough financing to make the project work.
In order for a project to be eligible, it must meet the following criteria:
- The project must be located in a designated low income neighborhood in in one of the seven cities served by Community First: These include York, Harrisburg, Lancaster, York, Reading, Allentown, Easton and Bethlehem.
- The census tract in which the project is located must have an average median income of less than 80% of the area median income or
- A poverty rate greater than 20% of the population of the census tract.
- The project must create significant impact in the neighborhood in which it is located in terms of construction and permanent jobs, business ownership by residents and create significant revitalization of an abandoned or underused commercial property.
- Must provide capital to projects that would otherwise not be possible to complete with conventional financing alone.
- Types of projects that can be financed with New Markets Tax credits include
- New or rehabilitated commercial, industrial or retail real estate in qualified neighborhoods
- Leased or owner occupied facilities
- Mixed use projects where income derived from residential uses does not exceed 20% of the project’s gross income.
- Non-profit human service facilities, or charter or vocational training schools located in designated low income neighborhoods and providing direct benefits to residents of that neighborhood.
For more information about our New Markets Tax Credit Program, you can contact our VP, New Markets Tax Credits.