Cracking the Code on Tax Credit Housing: What Syndicators Need to Know to Compete Nationwide

Kim Lisa Taylor and Krisha Young of Syndication Attorneys PLLC welcome Homero Cabello Jr., the Deputy Executive Director at the Texas Department of Housing and Community Affairs. Homero shares insights from his decades of experience managing affordable housing programs and tax credit compliance that can be applied to projects nationwide. We’ll discuss what it takes to qualify for Low-Income Housing Tax Credits (LIHTC), what entity structures their deals need to qualify, and how LIHTC programs benefit syndicators, investors and low income tenants. This knowledge is perfect for sponsors looking to enter or scale in affordable housing, or looking to maximize cash flow and tax benefits for their existing and future deals.

Chapters

Introduction to LIHTC Programs and Types (00:04:40)

Omero Cabello Jr. explained the two types of LIHTC programs: 9% program funding 70% of development costs, and 4% program with tax-exempt bonds funding about 80% of total development costs. He emphasized that each state must follow a qualified allocation plan dictating requirements and rules.

Property Qualification and Requirements (00:07:28)

Omero detailed that properties must maintain affordability for a minimum 30-year period. The program funds new construction, acquisition rehab, senior housing, and supportive housing for special needs populations. He emphasized their preference for mixed-income developments.

Application Process and Common Challenges (00:08:18)

Omero outlined that applications can be denied due to failure to meet threshold requirements, incomplete financial projections, and lack of local support. He emphasized the importance of securing resolutions from local government entities and state representatives.

Sponsor Requirements and Team Composition (00:11:07)

Omero detailed that sponsors must demonstrate experience, financial stability, and knowledge of compliance requirements. He highlighted the value of partnering with nonprofits or historically underutilized businesses.

Compliance and Property Management (00:16:19)

Omero stressed the importance of partnering with experienced property management companies that understand LIHTC programs and tenant qualification requirements. He mentioned Texas’s robust compliance monitoring team overseeing 350,000 doors across 3,000 properties.

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