New Market Tax Credits
What are new market tax credits?
The New Markets Tax Credit (NMTC) Program was created by Congress in 2000 to incentivize private investment in economically distressed communities. Administered by the U.S. Department of the Treasury through the Community Development Financial Institutions (CDFI) Fund, the NMTC program offers a 39% federal income tax credit over seven years to private investors who invest in qualified community development entities (CDEs).
The purpose is to bridge financing gaps for developments in low-income areas, encouraging revitalization, job creation, and long-term economic growth. NMTCs are often used to fund community facilities, health centers, educational institutions, industrial projects, and mixed-use developments—projects that might otherwise struggle to secure sufficient capital.
In essence, the program makes it more attractive for investors and lenders to support developments in under-served markets by reducing their federal tax liability. Projects that qualify for NMTCs benefit from more favorable terms, including lower interest rates, more flexible underwriting, and gap financing.
For developers and businesses in Nebraska, especially in cities like Omaha, Lincoln, Grand Island, or rural areas facing economic decline, NMTCs can unlock transformational funding and catalyze reinvestment where it’s needed most.
Who Qualifies for New Markets Tax Credits in Nebraska?
Eligibility for NMTC funding depends on both the location of your project and the type of organization or entity seeking financing. Projects must be located in Low-Income Communities (LICs) as defined by the U.S. Census Bureau — generally, areas with poverty rates above 20% or median incomes below 80% of the area median.
In Nebraska, this includes large portions of North and South Omaha, parts of Lincoln, Hastings, Norfolk, and many rural towns that have faced long-term disinvestment. You can use a mapping tool from the CDFI Fund to confirm whether your project site qualifies.
Eligible project sponsors include:
Nonprofits
Private developers
Manufacturing businesses
Health clinics and schools
Mixed-use real estate developers
Typical NMTC projects range from $5 million to $25 million, although smaller deals may be considered in certain funds. Projects should also demonstrate clear community benefits such as job creation, expanded access to health or education, or serving underserved populations.
If you’re not sure whether your Nebraska project qualifies, that’s where a firm like Pelshaw Group can help. We assist clients with site selection, NMTC eligibility screening, and alignment with Community Development Entities (CDEs) for funding opportunities.
How the NMTC Process Works: Step-by-Step
Securing NMTC financing is not a simple grant application. It’s a competitive, multi-layered process that requires strategic planning, strong community alignment, and a solid project pipeline. Here’s a simplified breakdown:
Step 1: Confirm Site Eligibility
Use CDFI mapping tools to verify your project lies within a qualified census tract in Nebraska.
Step 2: Identify a Community Development Entity (CDE)
CDEs are the gatekeepers of NMTCs. They receive federal tax credit allocations and choose which projects to fund based on impact, location, and feasibility.
Step 3: Create a Project Prospectus
This includes financials, design/construction details, community benefits, job creation stats, and how the project meets NMTC goals.
Step 4: Apply for NMTC Allocation from CDE
You’ll need a strong team—legal, tax, and development experts—to negotiate favorable terms and meet compliance requirements.
Step 5: Close the Deal
Funds are distributed through a complex structure that includes leverage loans, equity, and tax credit equity. A single NMTC transaction may involve up to 5–6 parties.
Pelshaw Group can walk Nebraska developers through the full process — from packaging the application to managing the closing and compliance paperwork. If you’re navigating NMTCs for the first time, expert guidance is not optional — it’s essential.
Why Use NMTCs? Benefits for Developers, Communities, and Investors
NMTCs offer triple-win benefits for Nebraska developers, community stakeholders, and private investors alike. Here’s how each party gains:
For Developers:
Access to Capital: Fill financing gaps that traditional loans can’t cover.
Below-Market Rates: NMTC-enhanced loans often come with favorable terms.
Non-Recourse or Limited Guarantee Options: Reduces risk exposure.
For Communities:
Economic Revitalization: NMTCs support catalytic projects that bring jobs, services, and stability to distressed neighborhoods.
Mission-Driven Investment: Projects must provide measurable public benefits, ensuring long-term community alignment.
Sustainable Impact: Projects often include workforce development, local hiring, and social services.
For Investors:
39% Federal Tax Credit Over 7 Years
Community Impact with Return: Ideal for banks seeking CRA credit or corporations looking for ESG-aligned investing.
If you’re developing in Nebraska and want to combine public benefit with private return, NMTCs are one of the most powerful tools available — and Pelshaw Group can help you tap into it.
How Pelshaw Group Helps You Navigate the NMTC Landscape
At Pelshaw Group, we bring more than two decades of experience in real estate development, public-private partnerships, and incentive-based financing to every project we touch. Based in Omaha, and active throughout Nebraska, we specialize in identifying underutilized programs like NMTCs to help developers do more with less.
Our services include:
Feasibility Studies: Does your site or project qualify?
CDE Introductions & Relationships: We work with a network of CDEs who prioritize Midwest investments.
Full NMTC Application Packaging
Gap Financing Strategy
Construction & Project Management
Post-Closing Compliance Support
We understand the pressure that comes with managing timelines, budgets, and investor expectations. Our team works as your trusted development partner, helping you move from concept to closing without missing a step.
If you’re ready to explore New Markets Tax Credits for your Nebraska project, contact Pelshaw Group today. We’re not just consultants — we’re builders, advocates, and strategists with a passion for community-driven growth.