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Tax Credit Development Financing
Terms
- 35 year maximum term
- 35 year maximum amortization
Fees
- Origination Fee of 1.5% of mortgage loan commitment amount for permanent financing. This fee is waived if WHEDA is construction lender.
- Loan Structuring Fee (non-refundable) of one-half of the origination fee is payable upon acceptance of the Mortgage Loan Commitment; this fee is credited toward the loan origination fee at closing.
- Application Fee of $250 for developments of 24 units or fewer, or $500 for developments of 25 units or more.
Fees are subject to periodic review and change.
Eligibility
- Eligible borrowers include single asset entities.
- Eligible developments include multifamily developments with a 9% Low Income Housing Tax Credits (LIHTC) award
Minimum Set-Aside Units
20% of all units set-aside for households with incomes not exceeding 50% of County Median Income (CMI).
Or
40% of all units set-aside for households with incomes not exceeding 60% of CMI.
Total rent plus utilities cannot exceed 30% of the respective CMI levels.
How to Use Tax Credit Development Financing
- Consider your market. A market study helps you assess the market you are considering; will it work or not? Prepare according to the guidelines in Appendix A.
- Looking to finance an existing multifamily property? A capital needs assessment identifies and quantifies a building's current physical condition and future physical and financial needs. Find a provider and prepare according to the guidelines.
- Talk to a Commercial Loan Officer (CLO) regarding any pre-application issues.
- Complete the application in conjunction with a Tax Credit Allocation application and send it to WHEDA, along with the application fee. You may chose to complete the application for financing after you know you have been allocated tax credits.
- Once tax credits are awarded, a CLO will review the loan application and will contact you.