Understanding LIHTC Basics Before Embarking On Workouts

Law360, New York (December 4, 2014, 10:27 AM EST) -- Over the last several years, there has been an increase in defaults in loans made to finance affordable housing projects. Many of these projects involve a blend of senior debt financing from a bank lender and investor equity obtained through the sale of low-income housing tax credits (LIHTCs) awarded for the project. When these projects fail, they present unique restructuring and insolvency issues. This article is meant to familiarize the reader with the basic concepts of LIHTC financing that must be understood before becoming involved in workouts or bankruptcies involving LIHTC projects....

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