What We Do
New Markets Tax Credits
The Urban Development Fund, LLC (UDF), a certified Community Development Entity (CDE), provides financing to projects in low-income communities throughout the United States utilizing the New Markets Tax Credits (NMTC) program. NMTCs can subsidize up to 26% of a project’s capital needs, usually in the form of a low interest, forgivable loan with a term of at least 7 years.
Congress created the New Markets Tax Credits program in 2001 to incentivize investments that create jobs and provide services in economically disadvantaged areas. Since 2002, the CDFI Fund — a division of the US Treasury that administers the program — has made 17 rounds and 1,354 NMTC allocation awards totaling $66 billion in tax credit authority to CDFI-certified Community Development Entities (CDEs). In order to use NMTCs, a project must obtain financing from a CDE, like UDF, that has been awarded tax credits.
UDF’s program is used primarily to fund owner-occupied businesses and Non-Profit community facilities located in severally distressed qualifying census tracts. UDF primarily focuses on non-profits that serve a minority community or a small business owned by a minority member. Qualifying census tracts, known as Low Income Communities (LICs), are determined by income and poverty data from United States Census data. NMTCs can also be layered with many different financing sources, such as traditional debt, grants, tax increment financing and Historic Tax Credits.
Historic Tax Credits
The Federal Historic Preservation Tax Incentives program encourages private sector investment in the rehabilitation and re-use of historic buildings. It creates jobs and is one of the nation’s most successful and cost-effective community revitalization programs. It has leveraged over $66 billion in private investment to preserve 38,000 historic properties since 1977. Urban Development Fund and its affiliate Aries Capital have completed numerous projects utilizing Historic Tax Credits throughout the country.
Advisory
UDF’s tax credit expertise – combined with affiliate Aries Capital’s 31 years of success arranging and funding over $8 billion for commercial, multifamily and hotel assets nationwide and our collective team’s firsthand experience as commercial real estate developers and owners – gives us a unique advantage that we share with our clients.
Because we have sat at all sides of the transaction table, we are better able to help clients evaluate and strategically structure opportunities to optimize their positions and achieve both short- and long-term goals. Clients can leverage our proprietary relationships and knowledge at all stages of the transaction process, business plan or property lifecycle.
Where we add value:
- Development, Acquisition, Refinance or Sale
- Renovation, Adaptive Re-Use and Other Value Add
- Bridge Debt for Properties in Transition
- Permanent Debt for Stabilized Properties
- Mezzanine Debt and Preferred Equity to Close the Gap
- JV and Private Equity
- Opportunity Zone and Other Government Programs
- Tax Credit Syndication and Financing
