Last fall’s election outcome greatly increased the likelihood of changes in the Internal Revenue Code, including a reduction in corporate tax rates. Because of this possibility, corporations are analyzing potential consequences for their investments in low-income housing tax credit (LIHTC) properties. As a result the LIHTC equity market is experiencing significant disruption. However, it’s important to note there is no shortage of demand for LIHTCs. Rather, the current questions involve pricing, with many closings delayed, and those deals that are going forward being closed with notably less equity.
Allocators’ Role
Normally LIHTC allocating agencies’ involvement in the developer-investor relationship is limited. However, when challenges arise agencies can play a crucial part. Novogradac & Company is surveying allocators about how they are addressing the disruption; the initial responses are below. Although some may have not yet decided on a course of action, all are aware of the issues and evaluating their options....Read More
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