The program, which is administered by the Community Development Financial Institutions (CDFI) Fund, part of the U.S. Treasury, works like this:

• It creates a 39 percent tax credit for investors that place equity investments in CDEs. CDEs are defined by the CDFI as “domestic corporations or partnerships that are intermediary vehicles for the provision of loans, investments or financial counseling in Low-Income Communities.” These entities must be certified by the CFDI.
• The credit is taken at the rate of five percent of the total investment in each of the first three years, and six percent in each of the final four years.
• CDEs must loan or invest in low income areas (Non-housing lending/investment only).
• Capital is invested and harvested by the CDE and not distributed for seven years.

In Kitsap County, Kitsap County NMTC Facilitators I LLC (KCNF) has been a certified CDE since February 2003. The organization, a wholly owned subsidiary of Kitsap County Consolidated Housing Authority (KCCHA) received $40 million in New Market Tax Credits in 2004 to be used as an incentive for businesses to invest in Bremerton. It was one of only 103 organizations in the country — and the only organization in the Puget Sound area — to receive a tax credit award.

KCNF is now authorized to provide NMTC loans to six poverty census tracts within Bremerton (803.00, 805.00, 806.00, 810.00, 811.00, and 812.00). The first development project that was made possible by this program was the renovation of the Medical Dental building in downtown Bremerton, now the headquarters of Dimension 4. The Pacific Avenue Plaza in downtown Bremerton, now home to Advanced Medical Imaging and the offices of Pacific Avenue Dental, was also funded in part by the program.

For more information about the program, visit www.kitsapnmtc.com.