LIHTC multifamily experience
Hello,
I am looking at a 32-unit property that is LIHTC (low income housing tax credit). Does anyone have experience with LIHTC properties? I am wondering how rents are determined and how often they adjust? Any other advice/information is appreciated.
Brian
Hey Brian. Contact Ken Moncrieff. He's one of my Gold Inner Circle Members and actively doing deals in Kansas City. I'll DM you his email as BP won't let me post that here.
Found some information here:
@Brian Plajer You will need experience to actually buy and take down a LIHTC deal. The agency will require it and your management company to have experience. You likely know this but just helping out for anyone else looking a LIHTC deals. Happy to chat further about the KC market though.
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Real Estate Agent Kansas (#00245860) and Missouri (#2019043249)
- http://www.xchangecre.com
There are ongoing compliance rules and procedures that would seem to require a PM that is well versed in the LIHTC process so as to keep one out unintentional compliance trouble. How units turn, how units are allocated, how moves form one building to another work etc.
"I am wondering how rents are determined and how often they adjust?"
Ultimately annually seems "how often", but check how often HUD adjusts the local AMI as that # ultimately controls the end result.
Rent calcs need at minimum the below but there are a few nuances and other details in order to dial it in (novoco has an estimate tool):
- the set aside % of AMI rate,
- the # of bedrooms and
-the HUD set AMI.
Additionally I suggest:
-Know what the contractual rent percentage(s) (depends on the deal) of the Area Media Income (AMI) are for that specific property. Generally the limitations do not normally apply to all units, so know how many are avail for market rate.
-Find out how much time is left in the requirements (new deal or 10 years + later) overall and any exit options that are available, if desired.
Find a specialist or at least do a LOT or recon.