cherrytree group llc logo
Quality for Tax Credits

Cherrytree Group LLC Blog

RSS Grab the Cherrytree Group Real Estate Blog feed

Get e-mail notifications of new blog posts! Enter email address below.


Delivered by FeedBurner

 

Low Income Housing Tax Credits ("LIHTC”)

Saturday, October 09, 2010

 ... by Warren Kirshenbaum

In this period of difficulty obtaining adequate bank financing, it benefits developers to structure the financing of projects using mechanisms that allow for less of an equity contribution.   Owners/developers of affordable housing are able to receive low-income housing tax credits (“LIHTC’s”) by providing for an indirect federal subsidy of qualified low-income housing.  Owners receiving LIHTC’s will rent to tenants earning 80% or less of the area’s Average Median Income (“AMI”). These tenants will qualify for a below-market rent, which the tax credits effectively subsidize in exchange for the project’s commitment to restrict rents, and to rent to low-income people for a designated time period.  LIHTC’s offset federal taxes on a dollar-for-dollar basis for a ten year period and are awarded to owners of low income housing by application to the State’s housing department. Developers “sell” the tax credits at a discount to syndicators (investors) to raise the project’s equity, resulting in less or no equity being needed from the developer.  The developer is required to restrict rents to below market rates, making the property affordable to low-income individuals, and this restriction can remain in place for 15 years or more.  Tax credit investors usually claim a limited partnership interest with a 99.9% interest in the limited partnership, as well as participation in cash flow or sale proceeds.  Although tax credit deals have many variations, developers usually utilize 9% tax credits for new construction, or substantial rehabilitation with no federal subsidy.  These tax credits subsidize 9% of the project’s qualified building costs every year for ten (10) years; or 4% tax credits for federally subsidized new construction or acquisitions of existing buildings.  This program subsidizes 4% of the project’s qualified building costs every year for ten years.  As with most deals, the equity and debt are funded in periodic draws from the project with requirements stipulated by agreement.  These projects must restrict their rents and benefit low-income tenants for a fifteen year compliance period.  This restriction is usually detailed in a recorded Land Use Regulatory Agreement (“LURA”).  Consequently, a tax credit financed project requires constant monitoring of the rents and income requirements of the tenant population to avoid a recapture of the tax credits by the IRS.  In an affordable housing transaction, a Stipulated Sum contract is awarded for the construction, and a property management company will manage the project, thereby shouldering the compliance responsibilities of IRC $42.  Various other funding sources add to the multi-layered financing structures of these deals.  

We, at Kirshenbaum Law Offices and the Cherrytree Group have experience in all aspects of LIHTC transactions, from the development and construction related issues to the financial structuring and tax credit implications and structuring of the transaction.  Specifically, we can assist in many of the issues that arise in LIHTC deals, such as:

  • Purchasing affordability restricted apartment complex(es);
  • Obtaining bridge loans or pre-development loans;  
  • Assistance with loan conversions;
  • Post Compliance Period Restructurings;  
  • Historic tax credit rehabilitation transactions with or without an affordable component;
  • HUD transactions; and
  • New Construction for Multifamily and Seniors.  

Recent Posts


Tags

Massachusetts gas station owners Brownfields tax credt, Boston real estate attorney, ma wind power Brownfields Act, economically distressed areas, Massachusetts Brownfields Tax Credits, Massachusetts Contingency Plan, MGL Ch 21E, RAO, remedy operation status, renewable energy, sale of tax credits, tax advantaged development, tax credit syndication, tra restoration projects tax break for renewable energy projects negative environmental effect federal tax credit, Boston Brownfields tax credit, Massachusetts microturbines renewable energy jobs brownfields, CT solar farms monetization of ITC, Boston renewable energy tax break disaster relief, Boston solar capacity solar initiatives remedy operation status historic tax credits, Boston renewable energy funding renewable energy grants devastating environmental damage SRECs investing in surface lots Historic rehabilitation tax credits developing real estate, MA develop renewable energy systems equity requirements energy efficiency improvement projects federal low income housing tax credit investing in parking lots Brownfields program, Boston Brownfields Tax Credit eligibility solar power BTC program american recovery and reinvestment act build a wind farm new markets residential properties invest in development projects historic rehabilitation tax credit Seattle real estate investment, Boston the difference between tax credits and tax deductions solar system Massachusetts Brownfields Tax Credit process tax deductions Massachusetts Brownfields Tax Credit Applications distressed asset investing capped landfills Gulf Coast victimized invest in real estate MA Brownfields program distressed asset investment fund, ma selling tax credits for cash LIHTC tax credits global energy demand what is Brownfields tax credit, Boston new market tax credits tax credits for contaminated property selling tax credits Response Action Outcome 40B credited with spurring upwards of 80% new development Brownfields sites, MA renewable energy certificates tax advantages wind engery tax credit, MA HTC, Boston cleantech capitals renewable energy projects, Boston recapture 50% of remediation expenses, Boston buying and selling distressed properties brownfields tax credit programs private equity offerings invest in commercial real estate new markets tax credit program wind incentive LSP's Boston office space hedging transactions state film tax credits, MA outsourcing tax credits for cleaning up property converting tax credits to cash wind energy tax credit energy tax credit solar energy markets brownfields redevelopment, MA Historic Boston wind production tax credit wind power technology commercial tax credit attorney Massachusetts brownfields tax credits, Boston 1603 Grant Housing Development Incentive Program, Quincy learn about brownfields Austin converting tax credits to cash, MA multi-family apartments BP oil spill renewable energy tax credit programs heat and power polluted sites tax credit, New Bedford sydicator of tax credits wind subsidies financing solar installations historic preservation tax incentives, Boston solar panels renewable energy facility sale of renewable energy credits Massachusetts Ballot Questions, Question 2 Explained Brownsfield tax credit Massachusetts brownfields tax credit borrow money tax credit to spur redevelopment tax-excempt bonds hydro energy production marine and hydrokinetic, solar investing in apartment projects, MA historic remediation, MA real estate development economic development bill, MA federal historical tax credits Federal Historic PreservationTax Credit Business Financing production tax credit business solar investment tax credit Transactional Law Group brownfield cleanup program Brownfield sites, Boston federal and state tax credits extending Brownfields tax credit, Boston commercial leases tax credt The Transactional Law Group - MA federal investment tax credit portability of tax credits energy self sufficient large capital projects independent gas station owners solar and wind power massachusetts non-profit capitalism tax credits, RI market rate program, MA downturn Brownfields Credit Brownfields credits federal tax credits brownfield redevelopment, CT Broad Medows Salt Marsh tax credit consultant recession historic rehabilitation credits federal tax credits, Boston Housing Development Incentive Program brownfields projects, Boston sale of a tax credit disaster recovery assisstance, Boston tax credit conferrence, Springfield, MA brownfields tax incentives, Boston EB-5 Regional centers historic rehabilitation tax credit, Boston solar power project development solar energy credits real estate strategy how REITs works wind REIT investments commercial tax credits, MA business Brownfields tax credit program energy efficient tax deductions investing in real estate in MA Brownfields tax credit program, Boston Historic tax credits, MA investing in commercial real estate energy companies alternative funding sources Tax Credit thayer morgan non-bank resources for capital funding Massachusetts Contingency Plan borrowing by small businesses real estate tax credits for development investments in solar energy Federal Historic PreservationTax Incentive Program brownfields tax-credit program community development Yelena Tsvaygenbaum commercial tax credits, Boston renewable energy program solar facilities EPA brownfields grant money new york pops renewable energy credits federal historic tax credit developers, Boston, MA brownfields, MA private equity tax credit consultant, Boston private sector investments historic preservation tax credit, Boston renewable energy tax credits, MA commercial buildings new market credits small business tax credits for rental income, Boston LIHTCs Historic tax credits, RI sale of tax credits tax credit broker historic rehabilitation tax credits, Boston real estate properties state historic tax credit private investments Radio Entrepreneurs Brownfields sites film tax credit state tax credits Massachusetts historic rehabilitation tax credit expensive to produce historic and low income housing rental income, Boston commercial tax credit program, MA renewable tax credits, Boston permitting procedure real estate business asset declining property values landfill gas facility green standards LIHTC environmental remediation projects renewable energy tax credit commercial properties tax breaks HUD insured mortgages economically distressed areas development in Massachusetts BTC application process, Boston investors in renewable energy depressed and booming markets renewable energy expensive to produce Project Hope tax credit programs, New Bedford business investment commercial real estate investments SREC Massachusetts Brownfields Tax Credits Quincy, MA learn about brownfields tax credits deduction for energy efficient buildings largest accidental marine oil spill wind energy credits tax credit sydication methods of renewable energy production article in Bloomberg community development financial institutions wind power, Boston cleantech BP Gas station owners foreign investment Massachusetts BTC tax credits to fix up historic buildings HTC energy efficient property tax credits Quincy Broad Medows Salt Marsh traditional funding community block grants distressed assets RECs, MA build green economics of environmental projects examine tax credits venture capital free up capital BTC program, Boston Brownfields tax credt, MA renewable energy projects historic preservation tax credit BTC, Massachusetts alternate funding renewable energy credit tax incentives and credits engery tax credit, MA PTC commercial real estate owners tax incentives Brownfields tax credt program, Boston energy tax credits construction business loans new markets tax credits credit for income producing properties REITs, Boston buy real estate, MA Brownfields tax credit application process, Boston building improvements capital thayer morgan interivew investments energy systems historic preservation tax credits, Boston making money with commercial real estate Federal Historic Rehabilitation Tax Credit state historical tax credits partial equity participation contractors, Boston, MA more control over financing costs purchasing a contaminated property commercial tax credts, Boston renewable energy tax credits, Boston list of brownfields sites raising capital, MA investing in commercial real estate, Boston film tax credits, MA site remediation new market solar energy generation brownfields tax credits The Greenery of Brownfields development of the renewable energy industry solarize Massachusetts community rehabilitation brownfields credits, Boston tenant representative wind tax credits, Boston private sector investment renewable energy, Boston commercial tax credits LSP credits, Springfield, MA Historic credits movie tax credit BTC credits, Boston real estate attorney historic rehabilitation Historic tax credits state tax credits, MA power generation, Boston production tax credit, Boston brownfields tax credit, Boston CherryTree Group investment into business Bloomberg BNA brownfields webinar expiring tax credits buy commercial real estate, MA new clean power generation Historic PreservationTax Credit clean energy MA Housing Development Incentive Program, MA residential real estate multi-family construction solar pilot program renewable energy tax credit, Boston Commercial Real Estate Loan Amortization Periods solar installations NMTC Boston Marathon solar expansion solar power initiative PTC, Boston Nelson Mandela tax incentive deals tax credit conference capital finance tax relief Massachusetts film tax credit ITC historic building tax credit, New Bedford new normal EPA Brownfields investments REITS solar energy development San Francisco motion picture tax credits Cape Wind real estate deals EB-5 REAL program clean up Brownfields sites wind farm tax credit non-renewable energy sources rural energy for america program property-tax savings federal investment tax credits transfer of tax credits private equity, MA tax planning strategies economic growth geothermal power brownfields tax credits, Boston Kirshenbaum Law, Cherry Tree, LLC, Real Estate, MA historic tax credit, Boston qualified energy conservation bonds LSP credits renewable engery credit, MA tax credit investments new markets investments Former Getty owners Historic rehabilitation tax credits, MA oil spill what is a brownfields Warren Kirshenbaum economy Fim Tax Credits Fim Tax Credit revenue federal tax Credit Brownfields Tax Credits, MA brownfields webinar distressed asset investment fund tax credits for remediation hydro electric power new market tax credit Brownfields Tax Credit Applications geothermal renewable resources private equity offerings, ma wind farm development Brownfields tax credt rownfields Act solar generation solar panels on landfills Chapter 40B explained RECs ITCs, Boston rehabilitate properties trash facility real estate, Boston gas station loss of income tax credits for historic rehabilitation commercial tax credits, Lowell renewable energy incentives renewable energy tax credits small business loans brownfields tax credit, CT brownfields tax credit private equity' midterm elections cost of producing renewable energy tax credit brokers and syndicators distressed asset sales Commonwealth Solar Rebate Program Boston's one fund Activity and Use Limitation (AUL) federal energy investment tax credits Plymouth, MA financial incentives to develop real estate in MA gasoline price fixing EB-5 Green Card Program tax credits for developers RI Massachusetts tax credits weak economy invest investing in apartments, MA community development entity Massachusetts Brownfields Tax Credit Programs Louisianna investment tax credits, MA LSPA, Boston multitude of renewable resources renovation projects commercial tax credits, New Bedford renewable energy industry preservation of mills american symphony orchestra credit line funding financing Money Matters sources of funding business capital ITC for non-profits income tax credit investing in surface parking lots power generation, MA energy production citizens housing and planning association sustainable technology economic slump value-added services wind energy tax credit, Boston environmental remediation tax credits cherrytree group llc private equity offerings venture development capital MA wholesale acquisitions brownfields tax credit, MA small residential properties Brownfield tax credits, Boston Massachusetts BTC, Boston Historic Preservation Investment Tax Credit BTC federal tax incentives, Boston tax credits on brownsfields MGL Ch 21E obtaining capital solar renewable energy credits tax advantages, Boston Massachusetts tax credit program low-income housing tax credits capital line funding biodiesel visas for buying homes site clean up, Boston investment tax credit for non-profits Rhode Island gasoline market manipulation commercial energy tax deductions monetizing your tax credits Massachusetts brownfields tax credits, MA low income housing tax credits finance commercial real estate lawyer Brownfields Act, MA RAO NYC tax credits commercial real estate investment laws of Brownfields ITCs, MA solar energy properties QECBs tax credits, Boston Brownfields programs federal new market tax credits commercial real estate in MA solar power development brownfields Credits, MA film tax credit money, MA hydro power investment tax credtis, Boston credits federal historic tax credit, Boston investment tax credit distressed asset investment real estate lawyer, MA BTC's, Boston film tax credit, Boston American Recovery and Reinvestment Act of 2009 - Section 1603 debt-service BTC, Boston market rate housing tax credit, MA solar energy Kirshenbaum Real Estate commercial tax credit renewable energy credits, MA solar ITC environmental remediation tax credit syndication historic rehabilitation, Boston workforce development rehabilitation renewable energy, MA biomass power New Markets Tax Credit, Boston tax-credit program capital requirements REIT Massachusetts Brownfields tax credit, Boston fuel cells Chicago construction jobs Massachusetts state tax credits urban redevelpment Chapter 40B vote results developing real estate in MA MA Brownfields tax credt Summertime Economy in Boston wholesale energy brownfields projects, MA owns a property that may be a Brownfields site Cape Cod green energy projects solar investment tax credit FERC Martha's Vineyard cleantech cities commercial building tax deductions massachusetts BTC program, Boston federal energy regulatory commission foreign investors San Jose federal ITC film credits, MA film tax credit incentives REIT industry capital funding commercial real estate attorney equity wind energy credit passive income, Boston commercial real estate NIMBY not in my back yard on-site power generation real estate lawyer real estate investment trusts investment objectives visas for imigrants Historic credits, RI low-income neighborhoods solar energy production news commercial tax credits, Fall River tax advantaged development boycotting BP gas stations multi-family housing, MA historic property preservation, Boston renewable energy tax credtis, Boston real estate investments investment tax credits asset stripping informational technology deepwater horizon oil spill clean technology affordable housing foreign capital tax credits service brownfields redevelopment ITCs Brownfields program, MA extension of BTC, Boston engery credit, MA offshore wind Radio Entrepreneurs Show Money Matters Radio tax credits for gateway cities, New Bedford brownfields laws federal government preservation of historic buildings tax credits, MA new market program historic rehabilitation tax incentives, Boston Brownfields Tax Credits, Springfield, MA CHAPA tax credits for wind power, Boston commercial brownfields ITC, Boston renewable energy development solar energy array projects real estate investment trusts, Boston loaning money to consumers destructive oil spill equity investments commercial wind power money lending banking state and federal tax credits, Boston real estate projects historic tax credit new energy technologies solar energy tax credit green energy Boston fuel cell initiatives ROS The Cherrytree Group tax credits for environmental clean up, Boston clean energy projects monstrous oil spill tax credits to help economy wind tax credit rehabilitating historic buildings, Boston monetize a renewable energy tax credit, Boston brownfields redevelopment, CT rehabilitation of historic buildings, Boston tax credits speaker series 1603 Treasury Grant ROA tax credit consultants, Boston production tax credtis, Boston American Renewable Energy and Efficiecy Act, Boston infrastructure investment biomass facilities new housing developments solar projects secure capital state historic tax credits tax deductions solar investment tax production tax credits environmental projects capital raising questions, MA Lillian Clark renewable energy credits, Boston

Archive