MMCDC Awarded $35 Million Through New Markets Tax Credit Program

(WASHINGTON, DC) - U.S. Rep. Collin Peterson (D-Minn) announced that the Midwest Minnesota Community Development Corporation (MMCDC) in Detroit Lakes has been awarded a tax credit allocation of $35 million through the New Markets Tax Credit Program administered by the Department of the Treasury’s Community Development Financial Institutions Fund.

The New Market Tax Credit program permits taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities (CDEs). Those investments are then used by the CDE to provide investments in low-income communities.

“Once again, Arlan Kangas and the MMCDC staff are continuing to do great things for our part of rural Minnesota,” Peterson said. “This award provides another tool that can be used for the benefit of our region’s communities and companies.”

MMCDC will utilize this award to expand its lending and investing operations in secured debt financing and equity investments for growth stage companies, loans for real estate projects and capital to build the capacity of other CDEs. The award will allow for more favorable interest rates for qualified low-income community businesses.

MMCDC anticipates that 100 percent of loans and investments made will have terms more favorable than would otherwise be possible without the allocation and enable it to make larger investments with a greater impact on low-income communities. The award will enhance MMCDC’s impact by also reaching emerging CDEs that serve targeted populations, but lack a track record to obtain needed capital. A portion of the NMTC allocation will be used to build the capacity of these organizations

Substantially all of the qualified equity investments must in turn be used by MMCDC to provide investments in low-income communities. Under the current round, the CDFI Fund received applications from 271 entities requesting the authority to issue to their investors the aggregate amount of $30.4 billion in equity as to which NMTCs may be claimed. The CDFI Fund has awarded 62 organizations an aggregate total of $3.5 billion in NMTC allocation authority -- the allocation authority available this round.

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