The New Markets Tax Credit Program (“NMTC Program”) provides investment capital for operating companies and real estate development projects in order to foster job creation and community development in low-income communities throughout New York State. 

The NMTC Program is intended for borrowers / projects that can demonstrate new, quality, permanent job creation for low-income communities throughout New York State, or otherwise provide goods and services that benefit low-income people and residents of those communities.    

Empire State New Market Corporation (“ESNMC”), a subsidiary of Empire State Development (“ESD”), is a certified Community Development Entity under the federal Department of Treasury’s Community Development Financial Institutions (“CDFI”) Fund.  To date, ESNMC has received five New Markets Tax Credit (“NMTC”) allocation awards totaling $230 million, including $30 million in 2009, $55 million in 2016, $45 million in 2021, $50 million in 2022, and $50 million in 2023.

Program Eligibility

Borrowers must meet the definition of a “Qualified Active Low-Income Community Business” as defined under the NMTC Program guidelines. In addition, investments must be located in census tracts that meet the definition of “higher distress” per NMTC Program guidelines (see definitions below).

ESNMC will target:

• Approximately 27% of its financing activities to borrowers in non-metropolitan (i.e. rural) counties as defined by the CDFI Fund
• Approximately 33% of its financing activities to borrowers in deeply distressed census tracts as defined by the CDFI Fund
• Operating businesses seeking growth capital for equipment, inventory, and other growth needs
• Business or non-profit owner-occupied facilities
• Commercial or mixed-use real estate projects

ESNMC will consider, on a case-by-case basis, other investments that may not fit these categories.

Qualifying Your Site for NMTCs

The following information is presented for guidance. Experienced NMTC professionals will help to confirm eligibility. ESNMC will consider qualification as part of an overall evaluation of a potential NMTC investment.

To determine if your site is located in a qualified NMTC census tract, access the CDFI Fund’s website page that helps determine if your location qualifies for NMTCs and is located in a census tract that also meets some criteria/definition of “higher distress”:

Sites located in non-metropolitan (i.e., rural) census tracts must meet the following criteria:

• Median family income: < 80%
• Poverty rate: > 20%

Sites located in metropolitan areas must meet one of the primary criteria listed below or two of the secondary criteria listed below:

Primary criteria for sites located in metropolitan areas include:

• Median family income: < 60%
• Poverty rate: > 30%
• Unemployment rate: > 1.50x the National Average

Secondary Criteria 

• Census tracts with one of the following: (a) poverty rates greater than 25 percent; or (b) if located within a non-Metropolitan Area, median family income that does not exceed 70 percent of statewide median family income, or, if located within a Metropolitan Area, median family income that does not exceed 70 percent of the greater of the statewide median family income or the Metropolitan Area median family income; or (c) unemployment rates at least 1.25 times the national average
• Brownfield sites as defined under 42 U.S.C. 9601(39)
• Areas designated as distressed by the Appalachian Regional Commission or Delta Regional Authority
• Colonias areas as designated by the U.S. Department of Housing and Urban Development
• Federally designated medically underserved areas, to the extent that QLICI activities will support health-related services
• Counties for which the Federal Emergency Management Agency (FEMA) has (a) issued a "major disaster declaration" and (b) made a determination that such County is eligible for both "individual and public assistance;" provided that the initial project investment was made within 36 months of the disaster declaration
• A Census tract identified as a Food Desert, which must either: 1) be a Census tract determined to be a Food Desert by the U.S. Department of Agriculture (USDA), as identified in USDA"s Food Access Research Atlas (https://www.ers.usda.gov/data-products/food-access-research-atlas/go-to-the-atlas/); or 2) a Census tract that qualifies as a Low-Income Community and has been identified as having low access to a supermarket or grocery store through a methodology that has been adopted for use by another governmental agency, to the extent QLICI activities will increase access to healthy food

Disqualified Businesses:

• Massage parlor
• Hot tub facility
• Suntan facility
• Country club
• Racetrack or other facility used for gambling
• Store whose principal purpose is the sale of alcoholic beverages for consumption off premises
• Development or holding of intangibles for sale
• Private or commercial golf course
• Certain farming businesses

Funding Criteria & Selection Process

ESNMC will give prioritization for projects that:

Have demonstrable community impact:

• Business or project creates quality jobs and jobs accessible to low-income people
• Larger permanent FTE jobs and those that include training opportunities, benefits, local hiring, and/or pay living wages are preferred
• Offer job training and career advancement opportunities for unemployed / underemployed populations
• Financing that will create Healthy Foods outcomes, healthcare, or provide other community goods and/or services in LICs. Greater levels of products or customers served are preferred
• Financing that will support minority borrowers or those that provide MBE contracting opportunities
• Demonstrate environmental Impacts, i.e., greater levels of LEED, demonstrated energy savings, or other green features
• Support veterans through hiring, training or services
• Spur additional private sector investment in the local area
• Other community benefits not listed here will be considered as well

Project readiness:

• Project’s other funding sources have been identified, and preferably committed
• If bank debt is involved, the prospective lender preferably has prior experience with NMTC financing
• If the project involves construction, then projects that can commence construction (full construction drawings and all required permits / approvals) to be available for closing

Other New York State involvement and local support:

• Part of a larger redevelopment plan supported by local or regional economic development councils
• NY State is providing other forms of assistance that may be used to leverage the NMTC financing

Application Process

Visit the CDFI Fund Address Qualification website to determine whether the project is located in a qualifying low-income community.

• Type in your address in the upper right-hand corner and hit enter or click the search button. Click on the address that pops up and then click on “Zoom To.” Click anywhere on the map near the site to see the qualification criteria for the site.
• If the project is located in a Low-Income Community, your ESD Regional Office will then screen potential projects for suitability.

To assist with additional screening please download and fill out the NMTC Intake Form.

Contact Information

For more information about New York State’s allocation of the federal New Markets Tax Credits or for questions about your project’s eligibility, send an email with the project’s location and a brief description to your local ESD Regional Office, and ask to have your project screened.