How can real estate developers utilize federal incentives to build affordable housing projects and maximize their impact?
In today’s challenging commercial real estate landscape, with supply chain disruptions, labor shortages, and rising lending expenses, developers are finding relief in the affordable housing sector.
Federal tax incentives, such as Low Income Housing Tax Credits (LIHTC), offer a lifeline by subsidizing construction and rehabilitation of affordable housing projects. With thoughtful corporate planning, developers can attract and secure immediate project funding by distributing the tax credits to investors. Investors can then claim the tax credits annually over the course of ten years following project completion.
Financing options from federal, state, and local affordable housing programs are also available to address development cost shortfalls, in addition to traditional private lending. Such government programs often provide further incentives to developers, including the ability to construct more units in a project and reduced infrastructure fees, enhancing project viability.
Navigating these opportunities requires knowledgeable legal counsel well-versed in affordable housing laws and regulations.
Our team stands ready to guide you through this promising avenue.
