All Forum Posts by: Brandon Foster

If it's a tax credit deal, there would have been a regulatory agreement executed as part of the loan docs. There should be a section that discusses sale of the property. You should review this document. Better yet, have an attorney review the loan docs to be sure. 

With 13 years left it's likely the tax credit investor has left the original partnership. Request a copy of the LURA, mortgage note and any other use agreements or documents you can secure from the current owner.

With LIHTC the return on investment is typically secured in two ways - the general partner is securing a developer's fee in the early stages of the property as a "reward" for doing the transaction, and the limited partner (investor) is receiving their tax credits benefits over the first 10 year period (in addition to real estate losses).

By coming in at this point, you're not getting the up-side of the developer's fee, and you're not getting the passive return of the investor. You're basically buy a property with a low income tenant base and quite a few property restrictions...

We do LIHTC rehabs, construction, and refis frequently - I would highly recommend having a dialog with Novogradac. We use them for appraisals and other due diligence, and for borrowers like yourself their consulting services would be invaluable at this stage. 

I wouldn't necessarily run away from this deal, but be very careful about your next steps before talking in detail with a formal consultant.