Underwriting Requirements

Even though a proposed NMTC financing may satisfy all of the legal requirements, there are significant underwriting requirements that “qualified community development entities” (“CDEs”) and NMTC investors impose on Borrowers.

CDEs participate in a very competitive application process for NMTC allocation authority awards from the Community Development Financial Institution Fund.

As a result, CDEs have committed to use their awards for NMTC financings over and above the minimum standards that are otherwise required by the IRS and the CDFI Fund (which administers the NMTC Program).

Accordingly, the project and/or operations of the business or nonprofit must satisfy several underwriting requirements, including, but not limited to, the following [click applicable links]:

• being “Shovel Ready;”
• being located  in not only a  “Low-Income Census Tract”, but also one that is “Highly Distressed;”
• providing or retaining Substantial Community Impact; and
• having strong Local Support.

Community Reinvestment Associates provides detailed underwriting services to ensure that each NMTC financing is presented to profiled and targeted CDEs most likely to provide the most favorable NMTC financing terms based on our knowledge of the underwriting requirements and ranking systems of such CDEs.