New Markets Tax Credit

  • Holland & Knight's Tax Credit Transactions Practice attorneys have extensive experience in structuring and closing New Markets Tax Credit (NMTC) transactions.
  • We assist investors, lenders, syndicators and developers in creating new investment and development strategies to achieve their community development and investment goals.
  • Members of our team actively assist clients in devising innovative ways to use the NMTC in combination with other tax incentives in mixed-use commercial/residential developments.

Since its inception, our Tax Credit Transactions Practice Team has worked with clients and industry groups to analyze and develop creative solutions to the tax and structuring issues arising under the NMTC program and to close NMTC transactions.

Our team also has represented community development entity (CDE) allocatees from each of the allocation rounds and syndicators in putting together leveraged NMTC investment funds and structuring individual investments in qualified active low-income community businesses (QALICBs). Our attorneys have spent considerable time assisting clients in addressing the concerns of lenders to leveraged NMTC investment funds, including analyzing collateral and control issues at the upper-tier investment fund, CDE and QALICB levels, addressing tax issues inherent in the leveraged fund structure, and working with clients to design structures that maximize the value of the NMTC. We have represented QALICB borrowers and equity recipients in NMTC financings and have rendered required tax opinions. In addition, we represent investors in NMTC transactions. Our team has particular experience with transactions combining the NMTC with the historic tax credit (HTC) and with various state credit programs.

Holland & Knight attorneys have participated in many complex and creative transactions resulting in substantial financial benefit to our clients while also maximizing development opportunities in severely distressed communities. We have participated in many transactions that have closed to- date, combining various forms of government financing (HUD Section 221(d)(4) and Section 220 HUD-insured loans, Section 108 loans, HRSA grants for community health centers, and various state and local programs) and NMTC loans. Many of these sources have waned in availability (including many of the HUD sources), and we are now working on transactions with newer and, in some cases, more innovative sources. For example, the EB-5 program provides financing for high job-producing projects from investments made by foreign nationals seeking permanent visas. This source, although complicated, can be creatively combined with NMTC projects that also target job production, one of the policy goals of the NMTC program. We have worked on numerous projects that creatively combine affordable rental housing (including LIHTC) or facilities for the homeless or developmentally disabled with the NMTC. These projects also can sometimes take advantage of various state-funded housing financing programs.

In recent years, we have been engaged by several clients to advise them on workout strategies for distressed or failing NMTC investments. Our workout and management team has devised and implemented successful workout strategies on a number of NMTC and NMTC/HTC transactions. As the compliance period for many of the earliest NMTC deals has come to a close, we have worked with QALICBs and CDEs on the "unwind" of their NMTC transactions.

Holland & Knight's NMTC attorneys are active participants in various educational and industry programs, speaking and teaching at such programs throughout the year. For example, our attorneys regularly speak at Novogradac & Company, CohnReznick, American Bar Association and National Housing & Rehabilitation Association conferences. Our attorneys also hold leadership positions with many of these organizations.