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CHICAGO-The Urban Development Fund, an affiliate of locally based Aries Capital, has received an allocation of $60 million with the New Markets Tax Credit program by the US Department of the Treasury's Community Development Financial Institutions Fund. The Treasury awarded the Urban Development Fund (UDF) the tax credit for use in low-income communities. The UDF will provide financing for projects for the recovery and redevelopment of low-income areas throughout the US, says Neil Freeman, president of the fund. "We leverage our money with other money or subsidies," Freeman says. "That $60-million allocation probably will be $100 million to $300 million worth of projects."

UDF will focus on providing debt and equity financing for the redevelopment of hotel, retail, industrial and office space. The financing UDF provides has to be for redevelopments or new developments that will improve the community and create jobs, Freeman says. A portion of the allocation will be used for projects in the Hurricane Katrina Gulf Opportunity Zone and will also likely be used for projects here, he says. With previous allocations, financing was provided for projects in Louisiana, Mississippi, Illinois, Kentucky, Ohio, California, Minnesota, Florida, New Hampshire, South Carolina and Texas, Freeman says.

The New Markets Tax Credit program provides a credit totaling 39% of the cost of the investment during a seven-year period, according to information on the community Development Financial Institutions Fund's website. The program was started in 2000 to stimulate job creation and economic opportunity in low-income communities. This is the fourth allocation that UDF has received, with a total allocation of $192.5 million, Freeman says. The allocation allows UDF to provide lower rates and more favorable terms, he says.