Multifamily Property Rehabilitation
The Challenge
After owning a historic multifamily property in Texas for close to 15 years, a real estate developer and property manager decided to rehabilitate the 164-unit property. The $30 million renovation would make overdue improvements and create new low-income housing for both new and existing tenants, many of whom were refugees. However, the developer needed to explore available tax credits to make the project financially feasible.
Our Solution
The developer had been working with Springline for years, so they were already familiar with the team’s expertise around securing historic and low-income housing tax credits (LIHTC). Because the property had already been listed on the National Register of Historic Places, the Springline team was able to help the client find a historic tax credit investor to pay for a certain amount of the tax credits upfront, allowing the developer to fund initial expenses and pay down loans. The team also helped the developer complete its application to the National Park Service outlining the specific work to be completed. To qualify for the LIHTC, the Springline team helped the developer complete an application to the state of Texas, as well as find a federal investor to bring into the LLC partnership group, who would partner with the developer for the 15-year compliance period for low-income housing.
Client Impact & Results
The developer was able to move forward with the project because of the investors who purchased the tax credits. When the project is completed, the Springline team will help the developer submit the final application to the Park Service to receive the 20% federal tax credits, to go along with the 25% from the state of Texas. In total, the historic tax credits were $5.8 million, and the LIHTC were $8.8 million. As is the case with many low-income projects where rent is capped, the credits were the key to a successful project.
