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


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