OVERVIEW OF THE NMTC PROGRAM

Eligible locations.  Census tracts meeting statutory standards as “low income communities” qualify for this program.  See the eligible areas map showing locations which are eligible for project financing under NMRLP’s tax credit allocation. 

Eligible projects.  Sponsors (or borrowers) may be either for-profit or not-for-profit entities.  Eligible projects include medical buildings, office buildings, retail stores and shopping centers, hotels, parking garages, manufacturing and industrial buildings, and for-sale housing.  Rental housing is not eligible, except as part of a multi-use project.  

Project financing.  A typical loan provided by NMRLP to an eligible project would be for seven years at an interest rate approximately 3% lower than otherwise available interest rates.  This lower rate is made possible by a bank or another investor who makes loan funds available in exchange for tax credits.  NMRLP is effectively the conduit by which this bank or investor makes low interest rate funds available to the project. 

Applying for a loan.  A project sponsor or prospective borrower applies to NMRLP for a NMTC loan, much as it would for any other loan.  NMRLP will require detailed information about the project, the development team, the design, market feasibility, costs, project economics, credit of the borrower, and the economic impacts the project is likely to have in the low income community.  The loan will be underwritten by NMRLP and the investor who will make the funds available to the project.  It will require approval by the investor and the Governing Board of NMRLP.  The application to NMRLP should be made approximately 90 days before the project is expected to break ground, in order to complete the project review, underwriting, approvals and documentation. 

Program criteria.  NMRLP intends to fund projects which will have a significant (and hopefully catalytic) impact on the neighborhoods in which they are located, by bringing jobs to the area, enhancing business and health care services, and improving incomes and wealth-creation opportunities for area residents.  Preference will be given to projects which would not be possible without the tax credits or which will be significantly enhanced in quality, scale, or feasibility on account of the credits.  NMRLP will provide an informal evaluation of a project’s suitability and eligibility at the initial meeting with a project sponsor.