Applying for a NMTC Allocation Award

Each year, the CDFI Fund awards $5.0 billion of NMTC allocations to competing CDE applicants.  The application for a NMTC allocation authority award (an “NMTC Allocation Award”) consists of four parts (each of which are scored up to 25 points):

blue ribbon
  • business strategy (which includes a description of proposed nontraditional financial terms of the NMTC Financing, pipeline of financings, and track record of financing etc.);
  • community impact (such as job creation and new goods and services offered by the pipeline of financings, and track record of providing community impact etc.);
  • management capability (such as raising and deploying capital, and asset and risk management etc.); and
  • equity raising (such as stock offerings and donations etc.).

There are also up to 10 bonus points relating to the number of years of providing financing and the percentage of which has been to disadvantaged businesses.

creativity-complexity-185Applying for a NMTC Allocation Awards is extremely competitive.  The applications are extremely time consuming and detailed oriented.

We have reviewed NMTC allocations on behalf of the CDFI Fund and are very familiar with how the CDFI Fund scores applications.  Thus, we are able to draft NMTC allocation applications that are well-written, persuasive, and effective in securing a NMTC allocation award.

For example, as part of this process, we work with our clients to come up with a targeted business strategy; assist to identify and underwrite a primary and secondary pipeline of Borrowers and projects; quantify and qualify direct and indirect community impacts of proposed financings; efficiently structure each proposed financing based on available capital stack; identify and secure commitments from necessary investors and lenders; develop timelines and budgets; gather all supporting information and documents; and otherwise complete the NMTC allocation application.

There are many complex rules that must be followed in order to qualify for and maintain a new markets tax credit financing.

With over 20 years of experience closing approximately $1.6 billion of NMTC Financings, we are technically and uniquely qualified to represent our Borrower clients at each step of the NMTC Financing.

Specifically, our financial, legal and accounting backgrounds, as well as our significant experience in community and economic development finance enables us to strategically underwrite, structure and close these complex financings by providing the maximum financial multiplier effect using all sources of public subsidies and private capital.

If you are interested in qualifying as a CDE and applying for a NMTC allocation award, please complete our Initial Intake Form.

Upon engagement, we will:

  • if applicable, organize a new entity for purposes of qualifying as a CDE (the “Applicant”) submitting any of NMTC allocation application, including (a) drafting and filing articles of organization; (b) drafting partnership agreements or limited liability company agreements, as applicable (including provisions necessary for qualification as a CDE and other CDFI Fund requirements); (c) applying for a federal tax identification number; and (d) providing other related organizational services;

  • complete the online application to the CDFI Fund requesting designation of our client Applicant as a CDE (as well as provide necessary research to determine qualification of governing or advisory board members, as applicable, as accountable of low-income communities and/or low-income persons);
  • draft all necessary authorizing consents, resolutions, and certifications as required for facilitating all of the transactions contemplated by the NMTC allocation award application;
  • work with our client Applicant to outline (a) its business strategy and financial products; (b) qualifying and quantifying community impacts related to its pipeline of projects; (c) its management capability; and (d) its strategy for identifying and securing NMTC investors and other financing participants;
  • underwrite our client Applicant’s pipeline of projects;
  • assist in identifying other projects and Borrowers that may be included in the NMTC allocation application;
  • provide advice and guidance as well as draft and complete answers to each NMTC allocation award application;
  • file the NMTC allocation application online (and all required documents) with the CDFI Fund;
  • assist with any questions or concerns raised by the CDFI Fund during its review of the NMTC allocation application;
  • assist in negotiating the NMTC Allocation Award agreement (the “NMTC Allocation Agreement”) with the CDFI Fund;
  • draft CDFI required opinions, consents and resolutions required for the NMTC allocation award;
  • assist with organizing and qualifying affiliated CDEs to facilitate each NMTC Financing;
  • ensure compliance with the legal requirements of the NMTC Program and the NMTC Allocation Agreement;
  • negotiate term sheets provided to each Borrower, the Tax Credit Purchaser and other transaction participants;
  • structure the overall financing;
  • collect due diligence materials and create a drop box;
  • provide ongoing asset management, compliance and reporting services; and
  • provide such other services as set forth in our Consulting Agreement.

To apply for a NMTC Allocation Award, please click on the following link: