5 Ways to Maximize Real Estate Funding Through New York State's Economic Development

If you're looking to engage in real estate investment for your New York-based business, the state government may have money for you. The Empire State Development program offers both grants and loans that can help with the cost of your business' next corporate real estate acquisition or development.

New Markets Tax Credits

If your business locates in parts of New York State that need new jobs, the New Markets Tax Credits program can help defray the cost of your real estate investment. Qualified businesses will get below-market interest-only financing that may even be forgiven when it matures.

To qualify for the tax credit, you'll need to:

Plan a project of a relatively healthy size - $5 to $25 million

Create or save jobs - at least one job for every $38,000 of investment or per 350 square feet of development.

Locate where you're needed - the program applies to areas with 20% or higher poverty rates or median family incomes that are 80% or less than the national average. If you're open to locating outside of a metropolitan county or to an area with an unemployment rate that is at 1.5 times average or more, you'll receive preferential treatment.

Be ready to roll - the credit requires projects that are already at least 75% financed and that can close on a construction loan within 9 months.

Job Development Authority Direct Loans

By using state-guaranteed municipal bonds, the New York State Job Development Authority is able to access funds at low interest rates. If you're considering growing in New York State and adding jobs, JDA loans might be for you. In conjunction with a bank-issued first mortgage, JDA loans allow you to put as little as 10% down on your real estate investment or development and can also be used to acquire equipment. However, you'll need to meet preset goals for job creation. In addition, the program is primarily focused on industrial concerns, although offices can also be eligible. You can't use a JDA loan to buy a hotel, retail or other facility where customers come to the site.

Brownfield Clean Up Program Tax Credits

Some of New York State's best land for real estate investment and development is, unfortunately, subject to environmental contamination. Brownfield credits help to pay the cost of cleaning up the land so that it can be developed. They can also reduce the cost of buying environmental remediation insurance and, once the land is developed, reduce your property taxes. The credits are even more generous if you locate in an area with high unemployment or high poverty or if your development holds multiple jobs.

Metropolitan Economic Revitalization Fund

The MERF covers parts of New York State that fall within the Port Authority of New York and New Jersey's purview. As long as your new real estate investment will be located in an economically-distressed area and will create jobs and economic development, you could qualify for this program and its generous terms:

Loans of up to $5 million or 10% of the property's value, in conjunction with other financing
Total allowed loan to value ratios approaching 90%
Financing for industrial, retail and office developments with relatively few industry limitations