New Markets Tax Credit
Rebuilding local communities.
Revitalizing Massachusetts & Rhode Island communities
As a longtime resource for small businesses, Rockland Trust is proud to help communities rebuild through the federal New Markets Tax Credit (NMTC) Program. This program aims to encourage investment in low-income communities via tax incentives.
While almost any type of loan is eligible, NMTC loans primarily fall into the following categories:
- Loans for new construction and/or the substantial rehabilitation of commercial properties, including acquisition costs
- Permanent "take-out" financing of new construction and/or substantial rehabilitation, including acquisition costs
- Loans to acquire owner-occupied commercial real estate (when both the landlord and tenant are related parties and qualified borrowers). Types of owner-occupied loans include simple acquisition of an existing building, new construction, and/or acquisition and renovation of an existing building
- Loans to acquire equipment or other assets
- Loans for new construction and/or the substantial rehabilitation of homes or condominiums for sale (as opposed to loans for the construction of residential rental units, which do not qualify)
- Debt refinancing will not usually satisfy NMTC requirements, except for: (i) permanent "take-out" refinancing of recently completed new construction and/or substantial rehabilitation; and, (ii) owner-occupied loans, when both landlord and tenant are related parties and qualified borrowers.
The New Markets Tax Credit Program has strict borrower eligibility requirements.
The following types of borrowers may qualify for a NMTC loan:
- A borrower formed solely to develop or own real estate in a qualifying low-income community, which does not own other real estate or have other significant assets
- A borrower formed to acquire owner-occupied commercial real estate, when both the landlord and tenant are related parties and qualified borrowers and the tenant is the primary occupant
- A borrower may qualify if most (i.e., greater than 50%) of its employees and tangible property are located in a qualifying low-income community. A professional services business (e.g., CPAs, doctors, or law firms) located in a low-income community will therefore usually qualify as a borrower
NMTC rules prohibit loans to the following categories of potential borrowers:
- Apartment buildings
- Golf courses or country clubs
- Race tracks or other gambling facilities
- A store, such as a liquor store, the principal business of which is the sale of alcoholic beverages for consumption off premises (a restaurant that sells alcohol for consumption incidental to the sale of food may qualify)
"Over Carter Green II Condo Association
To Get Started
To learn more or apply for a loan as part of the New Markets Tax Credit program:
Call Michael Savage at 888.878.7824 or email him at Michael.Savage@RocklandTrust.com