DEFINITIONS
Community Development Entity (CDE)
In order to receive an allocation under the NMTC Program, an organization must be certified as a CDE by the CDFI Fund. To qualify as a CDE, an organization must:
- be a domestic corporation or partnership at the time of the certification application;
- demonstrate a primary a mission of serving, or providing investment capital for, low-income communities or low-income persons; and
- maintain accountability to residents of low-income communities through representation on a governing board of or advisory board to the entity.
Qualified Equity Investment (QEI)
A taxpayer wishing to receive a New Markets Tax Credit must make a QEI in a CDE which has been granted an allocation of NMTCs. A QEI must be:
- a cash investment in the CDE, and
- substantially all of the cash must be used by the CDE to make Qualified Low Income Community Investments, and
- the CDE must designate the investment as a QEI.
Qualified Low Income Community Investment (QLICI)
A QLICI is any investment (such as a loan or equity investment) made by a CDE in a Qualified Active Low Income Community Business.
Qualified Active Low Income Community Business (QALICB)
A QALICB is any corporation (including a non-profit corporation) or partnership engaged in the active conduct of a qualified business in a low income community meeting standards pertaining to gross income, use of property, and services performed. In most cases, an entity formed to own real estate in a low income community will meet the standards for a QALICB.
Low Income Community (LIC)
A LIC includes any census tract which has a poverty rate of at least 20% or a median family income which is 80% or less of the metropolitan area median family income. A map showing eligible census tracts in downtown
