New Markets Tax Credit Investments

The New Markets Tax Credit (NMTC) program permits taxpayers to receive a credit against Federal income taxes for making "qualified equity investments" (QEIs) in qualified "community development entities" (CDEs). Substantially all of the QEI must be used by the CDE to provide investments in low-income communities. The NMTC totals 39 percent of the QEI and is claimed over a seven-year credit allowance period.

UFA, together with its parent company, Portland Family of Funds Holdings, Inc. (PFF), has actively participated in the NMTC program since its inception in 2002. Portland New Markets Fund I, LLC, a CDE formed and managed by PFF, received a $100 million NMTC allocation, which has been completely placed in 10 projects in Portland, Oregon.

National Community Fund I, LLC (NCF), a CDE formed by PFF, has received $252 million of NMTC allocation in four allocation rounds. NCF provides senior and subordinate loans and patient equity investments in community facility, retail, commercial, mixed-use and industrial projects located exclusively in highly-distressed communities throughout the country. NCF makes loans and equity investments to projects that are finance- and development-ready, resulting in the immediate generation of living-wage jobs in low-income communities.

NCF's financial products are offered at rates significantly lower than comparable commercial market products and include flexible terms and conditions. NCF leverages its established strategic relationships with local and regional economic development organizations and Community Development Financial Institutions to ensure that its investments are provided only to projects that generate the highest community impacts.

Click here for more information on NMTCs (PDF)

New Markets Tax Credits Advisory Services

Leveraging its direct NMTC investment experience, UFA provides NMTC advisory services to investors and project sponsors, including financial institutions, nonprofits, governmental organizations and developers. Since 2004, UFA and its principals have provided NMTC advisory services with respect to nearly $500 million of third-party NMTC allocation for over $1.2 billion in real estate development costs.

UFA provides the following fund management services to investors:

• Sourcing and identifying eligible projects
• Sourcing and securing NMTC allocation
• Structuring and underwriting NMTC investments
• Sourcing and securing non-tax credit equity and debt
• Negotiating and closing NMTC investments, including oversight and management of all legal and accounting aspects
• Overseeing and managing bank accounts, fund flows, construction draw processes, disbursements, payments and distributions
• Preparing financial statements, filing tax returns, overseeing accountants and lawyers, and managing the administrative functions
• Providing financial and performance reports, including:
  (a) financial statements for each project, (b) tax information,
  (c) financial projections, (d) transaction documents and
  (e) compliance information
• Preparing community impacts analyses and reports

UFA provides the following structuring and syndication services to community development entities and project sponsors:

• Preparing NMTC applications
• Structuring transactions
• Syndicating tax credits
• Sourcing non-tax credit equity and debit
• Providing regulatory compliance, asset management and investor reporting services
• Preparing community impacts analyses and reports

Click here for more information on NMTC Advisory Services (PDF)

Historic Rehabilitation Tax Credit Investments

The Federal Historic Rehabilitation Tax Credit (HTC) program permits building owners or third-party investors to receive a credit against Federal income taxes for the rehabilitation of historic income-producing properties. A 10 percent credit is available for a non-historic building built before 1936. A 20 percent credit is available for the substantial rehabilitation of commercial, agricultural, industrial or residential buildings that are certified as historic. The HTC totals either 10 percent or 20 percent of the "qualified rehabilitation expenses" of the project and is claimed over a five-year compliance period.

UFA makes equity investments in real estate projects that qualify for HTC. UFA offers competitive pricing and pay-in schedules to meet developer capital requirements. Since 2004, UFA has provided nearly $80 million of equity capital for HTC eligible buildings.

Click here for more information on HTCs (PDF)