Alex Zeltser, Esq. Author Archives

Due to the COVID-19 pandemic and resulting impacts on the economy and financial markets, as well as the Federal Reserve’s raising of short-term rates to stave off inflation, interest rates and construction costs have risen dramatically, resulting in funding gaps that many multifamily affordable housing developers in the four percent LIHTC space have had difficulty filling.

In the current affordable housing development environment, multifamily projects that are not awarded competitive nine percent Low Income Housing Tax Credits are frequently exploring the four percent credit available for transactions in which, at least, 50 percent of the aggregate basis in the project is financed with proceeds of tax-exempt bonds or loans (“bonds”) issued by state and local housing agencies and certain municipalities using private activity bond volume cap (the “50 percent test”).