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new markets tax credit program
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The New Markets Tax Credit Program (NMTC) is a community development lending tool designed to stimulate the flow of investment in underserved communities by creating new jobs and accelerating economic revitalization. The program was created as part of the Community Renewal Tax Relief Act of 2000 which encourages private capital investment in low income communities by providing a 39% federal tax credit to investors. The program is based on the idea that there are viable business opportunities in low-income communities and that a federal tax credit would provide attractive incentive to increase the flow of investment capital to such areas.
CHFA in partnership with the City of Denver and the Colorado Enterprise Fund (CEF) formed the Colorado Growth and Revitalization (CGR) Fund LLC, a Community Development Entity (CDE) that was awarded $40 million in tax credits in 2005 of which 80% ($32 million) of the capital was targeted to major urban communities, and 20% or $8 million to rural communities.
The CGR Fund was awarded an additional $35 million of tax credit authority by US Treasury in October of 2008. The credits will be available for deployment in early 2009 and will target investments in every eligible census tract in Colorado. Approximately 50 percent, or $17.5 million, of the allocation will be targeted to major urban communities. The remaining 50 percent will be divided equally between minor urban and rural areas, allocating roughly $8.75 million for use in each. The additional credits will support critical projects around the state by offering flexible financing terms for commercial real estate, mixed use development, nonprofit community facilities and renewable energy.
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NMTC Partners
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