How can my NMTC funds be used?
NMTC funds can be used as a permanent or takeout financing for the purchase, construction, or even for refinancing the commercial real estate needed for your business. It is a requirement that your company be the primary occupant of the real estate being financed.
How are NMTC Loans Structured?
NMTC Financing is typically in second position, subordinate to bank financing. A typical structure for an NMTC loan generally looks like this...
45%...... Conventional Bank 1st Mortgage Loan
45%..... CCA-NMTC Loan—2nd Mortgage Loan
10%...... Minimum Down Payment or Equity
The 1st generally financed by a bank, which will determine its own interest rate, loan fees, and terms. The 1st must have at least a 10-year term, and many 1sts have terms of 20-25 years. There is no bank participation fee and building purchases can co-fund in escrow without the use of interim financing.
Wouldn’t SBA 504 financing be better for all small or mid-sized companies?
The SBA’s 504 Program is the nation’s largest provider of fixed-rate commercial real estate financing small and mid-sized companies. But Sometimes 504 is not a workable option for good companies, for technical reasons. For these projects, we have found that NMTC financing offers many benefits similar to those of 504 financing..
Is it true that refinancing is eligible and that non-profit corporations can apply for NMTC loans?
Yes. Refinancing is eligible, provided that the applicant company substantially benefits from the transaction.
Non-profit organizations are also eligible to apply, provided that they are well established and have good funding sources and financial condition. Funds for non-profits must finance facilities for their own occupancy and use, and down payment and/or equity requirements are typically higher for non-profits.
Can an NMTC Loan directly financing Construction or Remodeling?
No. NMTC loans are not structured for multiple disbursements or to directly finance construction or remodeling. For these projects CCA arranges all of the construction and take-out financing commitments first, and then the participating bank makes an interim or construction loan to be taken out by the NMTC loan when the construction is completed.
How do I know if my company qualifies for a NMTC Loan?
There are two major factors in qualifying for NMTC Financing, as follows:
- To qualify for NMTC financing, your project must be located in a low or moderate-income census tract. Portions of most communities in Northern California have numerous moderate-income census tracts. For just some of the examples of this, see our Projects and References page. To see if your project is eligible, contact your CCA representative—all we need is your project address.
- Companies applying for NMTC financing must have the financial capability to demonstrate that they can repay the loan they are seeking to finance their commercial real estate. Contact CCA for a quick no-cost prequalification for your project.
- Please note that if your project is not located in a low or moderate income census tract, we do have another financing option for you, similar to NMTC financing, but with slightly higher rates. Contact us for details.