Feds Award Self-Help $75 Million in New Market Tax Credits

The New Markets Tax Credit Program, established by Congress in December 2000, permits individual and corporate taxpayers to receive a non-refundable tax credit against federal income taxes for making equity investments in financial intermediaries known as Community Development Entities (CDEs). The tax credit provided to the investor totals 39% of the cost of the investment and is claimed over seven years.

Brennan said the NMTC investments are crucial for low-income urban, rural and Tribal communities nationwide. These investments have spurred job creation, the revitalization of commercial corridors and the development of community facilities, including health clinics, charter schools and food banks.

“New Markets Tax Credits are one of the most efficient economic development tools for low-wealth communities ever enacted, generating over $77 billion in qualified equity investment and $143 billion in total development financing to support 8,900 business and community facilities across the U.S. and creating more than 1.2 million jobs,” Brennan said.

Self-Help received the allocation through its Self-Help Ventures Fund, a nonprofit 501c (3) loan fund capitalized with loans and grants from foundations, religious organizations, corporations and government sources. The fund is part of nonprofit Center for Community Self-Help, a family of nonprofit organizations based in Durham, N.C., that includes the Center for Responsible Lending, Self-Help Federal Credit Union ($2.34 billion in assets, 136,214 members) and Self-Help Credit Union ($2.15 billion in assets, 100,668 members).

A news release from Self-Help said it uses the credits to drive investment in underserved areas, with a particular focus on financing community facilities that serve low-wealth individuals and marginalized communities.

“Like many financial institutions committed to socially responsible lending, Self-Help sees the program as a way not only to increase investment in low-wealth communities and create access to quality jobs, but as a way to support and strengthen the local institutions that provide access to crucial health care and educational opportunities for underserved community members,” the news release said.

With this latest award Self-Help has now received $558 million in NMTC allocations, including $230 million over the past four years. It primarily deploys the funds to high-impact projects in its credit union footprint, which includes California, Connecticut, Florida, Georgia, North Carolina, South Carolina, Milwaukee, the greater Chicago area, southern Virginia and the state of Washington.

Among its recent projects, Self-Help has:

• Provided $10 million in NMTC and $16.4 million in financing to build a new facility at a North Hills, Calif., elementary school that will increase student capacity by 49%. The school serves a predominantly low-income student population, “providing quality education in a community where educational resources have been chronically underfunded.”
• Contributed $9 million in NMTC allocation toward the expansion of the only Federally Qualified Health Center (FQHC) in New Hanover County in the Wilmington, N.C., area.
• Provided $14 million in NMTC allocation to finance the construction of a 78,000 square foot multi-use campus in Racine, Wis., serving families and individuals in one of Racine’s most distressed neighborhoods.
• Contributed $8 million in credits toward the major renovation of a Winston-Salem, N.C., YMCA’s existing 55,000 square foot facility.