Tax Credit Finance Resource Center

Tax credit programs allow businesses and investors to claim tax credits for committing resources to a project or business. Several different types of tax credit programs exist at the federal and state levels to encourage investments in redevelopment projects, affordable housing, specific industries, and communities of all sizes.

The Tax Credit Finance Resource Center provides information about the various tax credit programs available and how they can be used within the context of development finance. Tax credits directly reduce a tax payer's tax liability and are not a deduction, thus making them a very desirable and effective tool. They can be used in urban, rural and suburban communities, and in some cases on a regional basis. They can also provide a targeted impact by addressing many different community sectors, such as low-income neighborhoods, historic districts and under-served markets that present opportunities for new investment.

There are three main federal tax credit programs: New Markets Tax Credits, Historic Rehabilitation Tax Credits and Low-Income Housing Tax Credits. There are also numerous state tax credit programs available, which can be found in the map provided in the resource center below.

In order to receive a tax credit, an investor must first demonstrate that an investment has been made. Such a resource commitment could be an investment in a bricks and mortar real estate project or a cash investment in a business. The distributor of the tax credit is authorized to issue credit based on the actual outlay of resources as evidenced by the investor. Tax credits can be used for several purposes in development projects: to provide an increased internal rate of return for investors, to reduce the interest rates on a particular financing package, and perhaps most importantly, to provide a repayment method for investors in place of cash. In the latter case, the credits can often be sold on the secondary market to generate income.

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-Understanding Tax Credits

Interested in learning more about Tax Credits? This section contains resources on understanding the basics of Tax Credits.

Learn more about Tax Credits.

Remaking the Case for Tax Credits

Federal | Tax Credits

In the January 2011 issue of the Novogradac Journal of Tax Credits, Michael J. Novogradac outlines this basics of low-income housing tax credits, renewable energy tax credits, historic tax credits, and new market tax credits. In light of 2010's increased scrutiny on tax expenditures, Novogradac points out that these tax credits provide far-reaching social and economic benefits at the national, state and local levels.

New Markets Tax Credit Fact Sheet - From New Markets Tax Credit Coalition

Federal | Tax Credits | U.S. Dept. of Treasury CDFI Fund

This fact sheet, provided by the New Markets Tax Credit Coalition, provides a basic overview of the federal New Markets Tax Credit Program.

Low-Income Housing Tax Credit Program Fact Sheet

Federal | Tax Credits | U.S. Dept. of Housing & Urban Development (HUD)

This fact sheet, provided by the Office of the Comptroller of the Currency, provides an overview of the Low-Income Housing Tax Credit (LIHTC) Program. Elements include how the credits work, how they are awarded, and how LIHTC projects can provide Community Reinvestment Act consideration.

National Historic Preservation Tax Incentive Program Booklet

Historic Preservation | Tax Credits | U.S. Dept. of Interior - National Park Services (NPS)

This booklet, provided by the National Parks Service, provides an overview of the National Historic Preservation Tax Incentive Program in general terms only.

-New Markets Tax Credit Resources

The NMTC Program is provided by the CDFI fund to attract private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs).

Unlocking the Power of New Markets Tax Credits Members only

An overview of how New Markets Tax Credits work featuring Commonwealth Kitchen as a case study.

CDFA // BNY Mellon Webcast Series: Fill in the Gaps with New Markets Tax Credits Members only

During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, learn from expert speakers as they discussed their plans for the recent allocation of New Markets Tax Credits.

Finance Fund Invests in UC Gardner Neuroscience Institute Members only

University of Cincinnati Gardner Neuroscience Institute (UCGNI) is comprised of a diverse group of world-class physicians and faculty that provide specialized services for complex neurologic and psychiatric disease, illness, and injuries. Finance Fund provided $8 million of federal NMTC allocation; Cincinnati Development Fund, Inc. provided $8 million of federal NMTC allocation; Uptown Consortium, Inc. provided $20 million of federal NMTC allocation; and Capital One Community Renewal Fund, LLC, the investor, provided an additional $5 million of federal NMTC allocation.

Finance Fund Invests in Charter Manufacturing Members only

New Markets Tax Credit (NMTC) financing enabled Charter to acquire the equipment and machinery needed to operate its new, $148 million, 170,000 sq. ft. rolling mill, which is adjacent to its existing coil mill and steel making facility.

NMTC Program Award Book CY 2018 Members only

The CDFI Fund awarded 73 community development entities $3.5 billion under the 2018 allocation round of the New Markets Tax Credits program. The recipients are located in 35 states also including Puerto Rico and the District of Columbia.

View More New Markets Tax Credit Resources

-Historic Tax Credit Resources

The Federal Historic Preservation Tax Incentives program is provided by the National Parks Service to encourage private sector investment in the rehabilitation and re-use of historic buildings.

Historic Tax Credit Enhancement Act - October 2019 Senate Bill

This is the text of the Historic Tax Credit Improvement Act. The Act was introduced in the U.S. Senate in October 2019 by Sens. Bill Cassidy (R-LA), Ben Cardin (D-MD), Susan Collins (R-ME), and Maria Cantwell (D-WA).

National Historic Preservation Tax Incentive Program Booklet

This booklet, provided by the National Parks Service, provides an overview of the National Historic Preservation Tax Incentive Program in general terms only.

Creative Tax Credit Financing In North Carolina: NMTC, HTC and LIHTC Members only

Mary Nash Rusher of McGuireWoods LLP, Chris Leutzinger of SunTrust Bank, and Brian Oxford of CAHEC present on a panel regarding tax credit financing in North Carolina. This panel was moderated by Brien Desilets of Grant Thornton LLP.

Historic Preservation: An Overlooked Economic Driver, A Study of the Impacts of Historic Preservation in Rhode Island Members only

Historic preservation pays dividends for Rhode Island – its economy, its environment, and its quality of life. The pages that follow identify the ways and the means that Rhode Island benefits.

Annual Report of HTC FY 2017 Members only

Over $5.8 billion in private investment in historic preservation and community revitalization. Along with an estimated 106,846 jobs created in the 2017 fiscal year.

View More Federal Historic Tax Credit Resources

-Low Income Housing Tax Credit Resources

The Low-Income Housing Tax Credit (LIHTC) is provided by the U.S. Department of Housing and Urban Development to encourage and support the development of affordable housing in the United States today.

Investing in Housing with Low Income Housing Tax Credits Members only

Steve Johnson with Colorado Housing and Finance Authority and Jennifer Litwak with Housing on Merit focus on LIHTC deal structuring with discussions on the differences between the 9% and 4% credits. During this session, experts will detail basic tax credits structures and their application in deals.

Leveraging Multiple Federal Programs - U.S. HUD Members only

Bennett Hilley with the U.S,. Department of Housing and Urban Development presents on the various development finance tools they provide and how they could work with other federal tools.

LIHTC - Improved Data and Oversight Would Strengthen Cost Assessment and Fraud Risk Management Members only

This report, produced by the Government Accountability Office (GAO), identifies trends and successes in the Low-Income Housing Tax Credit (LIHTC) program and opportunities present to advance oversight of development costs.

Financing Supportive Housing with Tax-Exempt Bonds and 4% Low-Income Housing Tax Credits Members only

Tax-exempt bonds partnered with 4% Low-income Housing Tax Credits (LIHTC) have been widely used by affordable housing developers. It has taken longer for this financing structure to be used by permanent supportive housing developers since most assume their projects cannot support debt service on the bonds.

Low Income Housing Tax Credit Programs Members only

Jessica Smith-Perry from the Urban Redevelopment Authority of Pittsburgh presents on Low-Income Housing Tax Credits program.

View More Low Income Housing Tax Credit Resources

-Programs Map

Search the map below for tax credit programs by state. This specialized search is part of CDFA's State Financing Program Directory, the only online resource cataloging the development finance programs offered by state governments. Click on a state to see a sample of state tax credit programs available. Login with a CDFA Member account at the top of the page to view full results.

-Case Studies

CDFA // BNY Mellon Webcast Series: Fill in the Gaps with New Markets Tax Credits Members only

During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, learn from expert speakers as they discussed their plans for the recent allocation of New Markets Tax Credits.

Innovative State-Led Efforts to Finance Agricultural Conservation Members only

U.S. farmers are currently facing the most difficult agricultural economy since the 1980s. At the same time, many states are wrestling with the necessity of addressing environmental challenges. This report expounds upon the excellent work states are doing regarding conservation tax credits, cover crop incentives and environmental certifications to increase conservation across the landscape. The report also highlights how these programs work for agricultural producers and states.

Finance Fund Invests in UC Gardner Neuroscience Institute Members only

Finance Fund Invests in Charter Manufacturing Members only

The Hatchery Chicago Fact Sheet Members only

The Hatchery Chicago is a non-profit food business incubator that enables local entrepreneurs to build and grow successful businesses. Accion, the area’s largest microlender, and ICNC, which runs one of the largest business incubators in the country, are the joint venture partners and building owners. The City of Chicago and its affiliates provided a portion of the land, grants, tax increment financing, and new markets tax credits to help reduce the debt the project must carry.

View More Case Studies

-Headlines

Bills Introduced to Extend Section 25C, Section 45L Credits
Novogradac | Oct. 19 | Energy Finance | Legislative | Tax Credits

No Funding for Affordable Housing Project in MN
Winona Post | Oct. 17 | Housing Finance | Tax Credits | Tax Increment Finance (TIF)

View More Headlines

-Publications

Tax Credit Finance Reference Guide

Written in conjunction with Ice Miller LLP, the Tax Credit Finance Reference Guide examines how to effectively apply tax credits to development opportunities, and explains the basics of tax credits and the fundamentals of using these tools. In addition, the guide walks through the pros and cons of using tax credits along with the guidelines for completing due diligence, performance monitoring, and benchmarking success. This comprehensive Reference Guide discusses in detail the primary tax credits available at the federal level, along with certain state tax credit programs, and includes numerous case studies of successful tax credit projects.

Practitioner's Guide to Economic Development Finance

The Practitioner's Guide to Economic Development Finance 2nd Edition is the only comprehensive resource dedicated to building and utilizing the development finance toolbox. The Practitioner's Guide provides the insight and practical information needed to critically understand how economic development is financed and the tools, strategies and techniques used to build strong communities. From bonds, tax increment finance and special districts to tax credits, seed & venture capital, revolving loan funds and much more, this Guide outlines the financing tools required for succeeding in today's competitive economic development climate.

Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency

Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency (Handbook) serves as a companion to the Practitioner’s Guide to help illuminate the structures of development finance agencies (DFAs), essential conduits to access development finance tools. The Handbook provides an overview of DFAs and their myriad roles in various development efforts. Included in this discussion is a comprehensive look at over a dozen high-performing DFAs throughout the country. The Handbook is designed to be a starting point for local leaders to engage in the creation or acceleration of a DFA to build and utilize the development finance toolbox.

View More Publications

-Training Courses

CDFA Offers two tax credit courses on an annual basis.

The Intro Tax Credit Finance WebCourse examines the application of tax credit programs in greater economic development finance efforts. This course will discuss the practical application of tax credit programs including brownfields, new markets, low income housing, historic preservation, and state-specific programs.

The Fundamentals Course will help you understand the variety of development finance tools available, from bonds, tax credits and TIF, to federal financing programs, RLFs, and access to capital lending resources.

-Webcasts

CDFA // BNY Mellon Webcast Series: Fill in the Gaps with New Markets Tax Credits Members only

During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, learn from expert speakers as they discussed their plans for the recent allocation of New Markets Tax Credits.

2019 Q2 CDFA Quarterly Legislative Update

Bond Finance | Legislative | Tax Credits | Webcasts

In the second Quarterly Legislative Update of 2019, CDFA's Legislative Team discussed progress on pending CDFA legislation, other pending development finance legislation such as extenders, as well as what to expect from Congress in the coming months.

CDFA // BNY Mellon Webcast Series: The Landscape of Mega Project Initiatives Members only

During this installment of the CDFA // BNY Mellon Webcast Series, expert speakers from CAI Global, Baltimore Development Corporation, Arlington Economic Development, and VEDP provided an in-depth overview of the approaches being used by cities, counties, and states to attract mega projects like Amazon HQ2 and Under Armour.

CDFA // BNY Mellon Webcast Series: Unwinding Tax Credit Unwinds Members only

Tax Credits | Webcasts

During this installment of the CDFA // BNY Mellon Webcast Series, Lillian Plata with Nee Plata Law LLC presented on the structure of tax credit unwinds for New Markets Tax Credit and Low-Income Housing Tax Credit deals.

CDFA // BNY Mellon Webcast Series: Making the Most of $7B in NMTC Allocation Members only

Community Development | Tax Credits | Webcasts | Community Development Financial Institutions Fund (CDFI Fund) | U.S. Dept. of Treasury

During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, our expert speakers provided an inside look into how New Markets Tax Credits can be leveraged and considered opportunities that the double allocation round creates for qualifying projects.

View More Webcasts