NMTC 101: What Companies Need to Know for 2026 Allocations
The New Markets Tax Credit (NMTC) program remains one of the most powerful financing tools available for projects in underserved areas. With permanency now established, companies that want to benefit from the program in 2026 should begin preparing today.
What Is NMTC?
The NMTC program provides federal tax credits to investors who make qualified equity investments in low-income communities. For companies, this translates into below-market financing that can cover up to 20 percent of project costs at closing.
Who Qualifies?
To be eligible, a project must be located in a qualified census tract and typically involve job creation, community services, or other significant impacts. Manufacturing, healthcare, education, and community facilities are often among the strongest candidates.
Why Plan Now for 2026?
Securing NMTC allocation is competitive. Community Development Entities (CDEs) that distribute credits review projects months in advance. Companies that delay preparation until 2026 may find themselves behind others in line.
Steps to Take Now
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Identify Eligible Sites
Confirm whether your project location qualifies.
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Develop a Financing Strategy
Understand how NMTC would integrate with other funding sources.
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Engage with CDEs Early
Build relationships that strengthen your application.
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Work with Experienced Advisors
The complexity of NMTC transactions requires expertise.
The Takeaway
If your company is planning a project of $10 million or more in an eligible area, the time to begin the NMTC process is now. At Five Points, we guide clients through every stage, from confirming eligibility to closing transactions.
