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.
Read more about Tax Credits
Remaking the Case for 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.
Low-Income Housing Tax Credit Program Fact Sheet
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.
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.
CDFA Food Finance White Paper Series: Food Systems & Investment Tools
This paper continues a white paper series demonstrating the ways in which traditional development financing is already supporting food systems, with a focus on finance tools that help to stimulate investment. An overview of investment tools, such as tax credits and opportunity zones, is provided with examples of current programs as well as an extensive collection of case studies to illustrate how these tools can make an impact.
Innovative State-Led Efforts to Finance Agricultural ConservationMembers only Login
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 InstituteMembers only Login
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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.
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
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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.
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.
Fundamentals of Economic Development Finance WebCourse
January 29-30, 2020
Daily: 12:00 - 5:00 PM Eastern
The Fundamentals WebCourse is the foundation for all of CDFA’s educational offerings. This course helps attendees 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.
Intro Tax Credit Finance WebCourse
March 25-26, 2020
Daily: 12-5pm (Eastern)
The Intro Tax Credit Finance WebCourse examines the application of tax credit programs in greater economic development finance efforts. This course discusses the practical application of tax credit programs including brownfields, new markets, low income housing, historic preservation, and state-specific programs.
CDFA Federal Policy Conference
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April 14-15, 2020
The federal government plays a critical role in driving private and public investment in innovation, job creation, infrastructure, and community development. With the 2020 presidential election quickly approaching, development finance will be a key policy issue across the nation. The 116th Congress will also play a major role in shaping our country’s economic development policy going forward. It's up to the development finance community to focus the national discussion on smart federal policy, and CDFA is the voice of the economic development finance community on Capitol Hill. For these reasons, CDFA will host its CDFA Federal Policy Conference on April 14-15 in Washington DC.
CDFA // BNY Mellon Webcast Series: Unlocking Capital for Native American CommunitiesMembers only Login
Tribal lands cover over 5% of the national land base, making Tribal nations the fourth largest state and some of America’s largest rural populations. The U.S. Constitution recognizes Tribal nations as sovereign governments, yet have a nation-to-nation relationship with the U.S. government. Due to this political structure, Native American-owned businesses face steep barriers to accessing capital and economic development policies, and therefore face crippling poverty with unemployment levels far above the national average. With limited access to capital, many Native American-owned businesses struggle to start, build, and grow. During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we will discuss financing tools for Native American-owned businesses to assist in strengthening tribal nation’s local economies.
2019 Q2 CDFA Quarterly Legislative Update
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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.