Thoughts on Middle Income Housing Tax (MIHTC) creation
Wondering if anyone has thoughts on this?
See link to article below:
https://www.novoco.com/news/wyden-announces-sweep…
Based on research and podcast I listened to, seems like they've been working on this since 2016 or so. Does this have legs to be passed? Do you think this will be thrown into next phase of the infrastructure bills? Will investor appetite be high for this tax credit?
I have no idea about the political feasibility, but I'd guess investor appetite for the 5% would be similar to the LIHTC (5% and 4% isn't that far off), but less for the 2% credits. You would still struggle to pull together a complete cap stack with the 2% credit, since you would be able to finance only around 15% of the stack with credits (assuming a 5% discount rate, which is pretty close to what the LIHTC syndicators use). That being said, any rent percentage increase would be on a higher base, giving you more absolute dollars, so if the product cost is the same (which it probably will be), I'd imagine the MIHTC would be more attractive for long-term investors.
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