Affordable Housing and Tax Credit Financing

The recent recession and housing crises have fueled a strong demand for affordable housing. Development of projects taking advantage of historic, new markets and low-income housing tax credits (LIHTC) has continued at a vibrant pace in most markets. The historic tax credit market, which slowed dramatically following the Historic Boardwalk decision, has once again flourished after the IRS offered “safe-harbor” guidance to market participants in January 2014.

Troutman Sanders’ lawyers have extensive experience representing lenders and borrowers in a wide range of projects that utilize tax credits. We often counsel one or more of the parties providing taxable or tax-exempt construction, bridge or permanent, “take-out” financing. Our lawyers are skilled at negotiating the intercreditor, subordination and other agreements that govern the lien priorities, rights and remedies of the often numerous parties included in the financing stack.

Representative Experience

  • Represented an institutional lender in connection with a $4.3 million construction-bonds loan and more than $4.3 million credit-enhancement letter of credit to finance the construction of low-income housing in Chico, California.
  • Represented a financial institution in connection with a $5.7 million construction-bonds loan and $11 million credit-enhancement letters of credit to finance the historic renovation and construction of low-income housing in Washington, D.C.
  • Represented a financial institution in connection with a $14.2 million construction loan. The loan was secured by capital contributions by federal and state historic tax credit investors for Cigar Factory and Federal Capital Partners luxury condominium project in Charleston, South Carolina.
  • Represented a financial institution in connection with a $6.4 million construction loan. The loan was secured by $3.8 million in capital contributions by federal and state historic tax credit investors for Star Lofts luxury condominium project in Petersburg, Virginia.
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