December 2010 CDF provides $11.2 million in New Markets Tax Credits to Radio Flyer to help rehabilitate and reconfigure a 68,000 sq..... Read more >
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 CDF Funding ParametersThe Closing ProcessGeneral Compliance Requirements |
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CDF’s funding parameters are based on federal New Markets Tax Credit (NMTC) regulations, and internal policies. Financing generally comes in the form of one or more seven-year loans. This debt may be structured as a construction loan that converts to permanent financing, or as a “take-out” facility for an existing construction loan.
CDF is prohibited from financing the acquisition of “turnkey” facilities or from refinancing existing permanent debt. CDF is also currently restricted from financing the purchase of equipment, though certain permanent building fixtures may be financeable upon more detailed review.
CDF's borrowers must remain Qualified Active Low-Income Community Businesses (“QALICBs”) in accordance with federal regulations for the seven-year NMTC compliance period. In order to ensure that applicants maintain QALICB status, CDF generally requires that applicants create a special-purpose entity (usually a limited liability corporation) to develop and own the property. CDF may also require that the borrower agree to follow certain agreed-upon accounting principles, and covenant that it will not engage in prohibited activities during the compliance period. Examples of prohibited activities include leasing of the facility to gambling establishments, liquor stores or suntan facilities.
CDF provides financing only to projects located in Areas of Greater Economic Distress, as defined by the Community Development Financial Institutions Fund. Qualifying areas are identified on the map attached below. CDF staff members can also assist applicants in determining whether a project is located in an Area of Greater Economic Distress.
CDF requires that projects receiving NMTC financing comply with the City of Chicago's sustainable development policy. The requirement for projects receiving NMTC financing is equivalent to that for projects receiving a Class 6B property tax reduction, and is summarized in the Sustainable Development Policy matrix. There are a variety of options for meeting this requirement. Please feel free to contact CDF staff to discuss this requirement further and provide guidance to applicants.
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