Mixed Finance
4% housing credit with tax-exempt bonds
The as-of-right credit that rides on tax-exempt bonds, and the workhorse of layered deals.
What it is
In plain terms
- Earned as-of-right, without a competitive allocation, when the deal is financed with tax-exempt private activity bonds that meet the bond financing test, subject to the state's volume cap
- A fixed 4% credit rate, delivering roughly 30% of eligible basis in present value
- The recent federal law lowered the bond financing test from 50% to 25% of aggregate basis, so more deals qualify (confirm the current-year rule when sizing)
- Often twinned with the 9% credit to stretch a limited 9% award across a larger deal
For the compliance side of the credits, see LIHTC compliance.
How we help
Where we add value
- Making sense of the bond financing test and volume cap timing
- Keeping the bond-financed side compliant alongside every other source in the stack
- Guidance on twinning the 4% and 9% credits, and where to bring in your syndicator and counsel
- Asset management and reporting across the combined deal
Working on a mixed finance deal?
Tell us where the deal stands and what you need, and we will show you how we can help.
Email Kari LaLondeOr call 812-987-7245, or connect on LinkedIn