Getting Below the Surface

3 min read

In many ways the low-income housing tax credit market is a bit of an enigma – both transparent and opaque.

On the one hand, various industry resources (such as our Housing Tax Credit Monitor survey by CohnReznick LLP on page 26) provide great overviews of the volume and scope of the LIHTC equity market, such as current active syndicators and investors and product demand. Affordable housing conferences frequently feature a discussion of the equity market providing snapshots on current credit pricing, terms, and yields. [Note: NH&RA has a great equity panel scheduled for our Spring Developers Forum on May 19-20 in Marina del Rey, Calif.]

But for all of the available information, much is not well understood. I repeatedly hear our members say that there is a disconnect between developers and the end investors on credit pricing. This isn’t surprising. Because of the important role that syndicators play in our market, many developers don’t have direct contact with their end investor on a deal.

At NH&RA we take great pride in the interdisciplinary nature of our membership. As such, we have a few initiatives underway to help our members bridge this divide between developers and investors. Our affiliate, the National Council of Housing Market Analysts (NCHMA), has been engaged in a multi-year dialogue with the Acquisition/Underwriting Committee of the Affordable Housing Investors Council on the role that the market study and our industry’s best practices should play in the tax credit underwriting process. From this we have developed an invaluable set of Frequently Ask Questions to better inform the end users of market studies on proposed LIHTC developments. Following are a few questions posed and answered in this FAQ (you can view it at


Q: For rehabilitation projects, should the analysis consider improvements, the timing of the improvements, and the extent to which those amenities are reasonably expected to be maintained through Year 15?


Q: Should the Primary Market Area description demonstrate there is precedent in the market for LIHTC households renting in mixed-income projects where LIHTC households are only a fraction of the overall units in a partially assisted development?


Q: How should the “presence” of crime, drugs, etc. be treated within a market study? Likewise, how should the “perception” of the subject property due to crime be treated?


We hope this document will result in more transparency, collaboration, and cooperation between the market study and investor communities and we welcome your feedback.

At NH&RA we are also exploring alternative ways of discussing the equity market at our conferences. One approach has been “Shark Tank” panels – modeled after the popular television show – featuring mock negotiations that provide a fresh perspective into the syndicator and investor decision-making process.

This summer, NH&RA will present an investor panel exploring such topics as underwriting the developer and structuring limited partnership agreements.

The more we share information and collaborate as an industry, the more we grow and the better our transactions become. I invite you to join our conversation!

Thom Amdur is Associate Publisher of Tax Credit Advisor and Executive Director of National Housing & Rehabilitation Association