New Markets Tax Credit

Louisville Development Bancorp (LDB), the parent company of Louisville Community Development Bank has received a $40 million New Markets Tax Credit (NMTC) Allocation in the Sixth NMTC Allocation Round announced October 20, 2008. The Bancorp received two other award allocations in 2004 and 2005 totaling $70.5 million.

The NMTC Program stimulates economic and community development and job creation in the nation’s low-income communities by attracting investment capital from the private sector.

The NMTC Program provides tax credits to investors who make “qualified equity investments” (QEIs) in investment vehicles called Community Development Entities (CDEs). CDEs are required to invest the proceeds of the QEIs in low-income communities. Low-income communities are generally defined as those census tracts with poverty rates greater than 20% and/or median family incomes that are less than or equal to 80% of the area’s median family income.

The credit provided to the investor totals 39% of the investment in a CDE and is claimed over a seven-year credit allowance period. In each of the first three years, the investor receives a credit equal to 5% of the total amount paid for the capital interest at the time of the investment. For the final four years, the value of the credit is 6% annually. Investor may not redeem their investment in the CDEs prior to the conclusion of the seven-year period. 

To see a complete list of projects that received a portion of our Allocation and a description of each project, please go to our Winning Projects page.