The intent of the NMTC Program
Good Borrower and Project Candidates for NMTC Financing
Economic Benefits of NMTC Financing
Generally, with respect to the Forgiven NMTC Loan:
Generally, with respect to the Non-Forgiven NMTC Loan:
We identify, profile and solicit Allocatees and NMTC Investors that provide optimal nontraditional and favorable terms and flexible underwriting requirements based on the type of our borrower client, nature of its operations, and uses of NMTC financing.
NMTC Financing Facilitated by “Allocatees” and “CDEs”
As previously discussed, the NMTC financing = the QEI (less the Alocatee’s “sub-allocation” fees).
Additionally, NMTC financing = the QEI = NMTC Allocation Award (as “sub-allocated” to the NMTC financing, as described below).
How NMTC Transaction Participants Benefit
- the borrower, which receives gap financing with nontraditional and favorable terms, which is subject to flexible underwriting criteria, in the form of either:
- a Forgiven Loan, the terms of which include (a) approximate 1.5% interest-only payments during the 7-year NMTC compliance period, and (b) forgiveness at the end of such period; or
- a Non-Forgiven Loan, the terms of which include (a) a principal amount between $500,000 and $5 million; (b) a below-market interest rate; and (c) a term of up to 40 years (which can be beyond any secured asset’s useful life); and
- the Allocatee, which:
- receives “sub-allocation fees;”
- receives reimbursement for its ongoing asset management, monitoring, and overhead etc; and
- is able to further its mission as a CDE.
NMTC financing can be combined with state NMTCs, historic tax credit financing, and other community and economic development programs (such as opportunity zone financing, and those provided by the USDA Programs and the CDFI Programs). However, NMTC financing cannot finance any square feet to the extent that low-income housing tax credits finance such square feet.
Although the typical NMTC financing structure is quite complex based on all of the sources of funds, the fundamental economics and initial structure of any NMTC financing is illustrated in the following link:
For a discussion and illustration of the unwind of NMTC financing after the 7-year NMTC compliance period, please click on the following link:
For a more detailed discussion of the benefits of NMTC financing to a borrower, and applicable legal requirements and underwriting requirements, please click on the following link:
Please click the following link to watch our pre-recorded webinar:
To apply as a borrower for NMTC financing, please click on the following link:
For a more detailed discussion of the benefits of participating as a CDE in NMTC financing, and applicable legal requirements and underwriting requirements, please click on the following link:
To apply as a CDE for a NMTC Allocation Award, please click the following link: