We are interested in participating as a Borrower in New Markets Tax Credit Financing . . .

As previously discussed, generally, with respect to the Forgiven NMTC Loan:

  • the principal and favorable terms of which are provided by the proceeds of the NMTC Investor’s “purchase price” for the NMTCs;
  • it only requires approximate 1.5% interest-only payments during the 7-year NMTC compliance period; and
  • it is forgiven at the end of the 7-year NMTC compliance period.

Generally, with respect to the Non-Forgiven NMTC Loan:

  • a portion of the principal and the favorable terms of which are the provided by, or the result of, the NMTC Investor’s “purchase” of the NMTCs;
  • it only requires below-market interest-only payments during the 7-year NMTC compliance period; and
  • after the 7-year NMTC compliance period, the loan amortizes through its maturity date of up to 40 years (which can be beyond any secured asset’s useful life).

Generally, the economic benefits of the NMTC Program subsidy (whether in the form of the Forgiven NMTC Loan or the Non-Forgiven NMTC loan) include:

  • gap financing;
  • approximate 1.5% interest-only payments during the 7-year NMTC compliance period;
  • subordination to other creditors;
  • nontraditional and favorable terms, and subject to flexible underwriting criteria, such as:
  • the Forgiven NMTC Loan being forgiven at the end of the 7-year NMTC compliance Period, or
  • the Non-Forgiven NMTC Loan with a below-market interest rate and a term up to 40 years (which can beyond any secured asset’s useful life);
  • ability to obtain additional financing;
  • ability to “leverage” other sources of financing for a multiplier economic benefit;
  • “softer” foreclosure and enforcement rights if there is a default;
  • if applicable, state NMTCs provide additional subsidy; and
  • substantial community impacts to residents in “Low-Income Communities” and “Targeted Populations,” including “Low-Income Persons.”

We identify, profile and solicit Allocatees and NMTC Investors that provide optimal nontraditional and favorable terms and flexible underwriting requirements based on current and projected demand for certain types of borrowers (whether for-profit or nonprofit), uses of NMTC financing (such as real estate, equipment or operations), types of communities that will benefit from the NMTC financing (such as urban or rural or characterized by certain distress criteria (such as higher unemployment rates or poverty rates), and location in the country (based on NMTC Investors’ and Allocatees’ service area or targeted so-called “underserved states”).