New Markets Tax Credit Financing

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What is NMTC Financing?

The New Markets Tax Credit (NMTC) Program is administered by the Community Development Financial Institutions Fund (the CDFI Fund) under the U.S. Department of the Treasury. It uses tax credits to attract private investment into distressed communities, thereby spurring job creation and other economic growth.

The NMTC Program provides financing with non-traditional and more flexible terms than conventional debt. As a result, borrowers benefit from below-market interest rates, higher loan-to-value ratios, and longer loan maturities. The CDFI Fund allocates these tax credits annually to qualified institutions, like PCDC, to support the economic revitalization of low-income, economically-distressed communities nationwide.

$60m

New Markets Tax Credits

Awarded for 2017-18

PCDC’s NMTC Program

Our program provides flexible, low-cost financing for primary care projects that integrate an array of services that broadly address the health care needs of low-income persons. This enables PCDC to finance projects in underserved communities where program revenue may be insufficient to support traditional financing.

The low-cost equity that derives from these tax credits typically funds 20% to 28% of a project’s costs, affordably filling what would otherwise be financing gaps. Various other sources of project funding, including public and philanthropic dollars, commercial debt, and sponsor equity, can be blended with NMTC equity to complete a project’s funding package.

Through our NMTC Program, we typically fund projects ranging in size from $5 million to $15 million. For larger transactions, PCDC can pool its NMTC allocation with allocations from other community development entities (CDEs) and work with project sponsors to blend the NMTC equity with other available sources.

In February 2018, the U.S. Treasury awarded PCDC a $60 million allocation of NMTC.

In the last 10 years, PCDC’s NMTC Program has invested $222 million to finance and enhance primary care and other vital health services. These projects developed 878,000 square feet of health care facility space to serve 400,000 patients, and created 2,850 construction jobs and 3,100 permanent jobs.

Who We Serve

PCDC’s New Markets Tax Credit program helps meet the capital needs of community-based health providers across the country to expand and enhance primary care as well as other vital health services. We have over 25 years of experience serving and financing:

  • Federally Qualified Health Centers (FQHCs) and other community health centers
  • Behavioral health institutions including mental health centers and substance use treatment facilities
  • AIDS Service Organizations (ASOs)
  • PACE (Program of All-Inclusive Care for the Elderly) programs
  • Safety net hospitals including ambulatory care and outpatient centers

Spotlight

In June 2016, PCDC closed on a financing package that included $9.0 million in NMTC allocation to enable HealthCore Clinic to renovate and expand its health center in Wichita, Kansas. When completed, the new 40,000 square foot facility will triple the capacity of the existing center, providing critical primary care, wellness, and social services to the community. Read more…