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AHIC Scottsdale, AZ Presented by: Greg Griffin

This presentation discusses the Nonprofit Early Exit of a troubled LIHTC project in rural Oregon, including the challenges faced, the workout process, and the considerations for the fund's IRR and future recapture.

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AHIC Scottsdale, AZ Presented by: Greg Griffin

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  1. AHIC • Scottsdale, AZ • Presented by: Greg Griffin October 25, 2012

  2. Nonprofit Early Exit • 32 LIHTC units • Located in rural Oregon • Y16 – 2013 • Early Exit – Sold 2011 • LP Equity – $857,853 • Actual Credits Delivered $1,040,000 • Loans • $724,000 original balance • $671,067 balance at sale • Value of real property and LP interest do not exceed debt

  3. Nonprofit Early Exit • Troubled Project • Mortgage in technical default due to inadequate DCR • Lack of active GP • High vacancies • High administrative & maintenance costs • Poor cash flow • Mold, capital needs • Possible foreclosure • Possible recapture

  4. Nonprofit Early Exit • Workout • Assign GP and LP interest to new third party entity (stronger financially with experienced LIHTC property management) • New entity required mold mediation totaling $112,000 as inducement to step in • New entity indemnifies investors against recapture • No known compliance issues at property • Property operations improve

  5. Early Exit Considerations • Impact on Fund IRR • Beyond 10 year credit period • Delivered projected credits • Statute of limitations for recapture • Safeguards for Fund against future recapture • Indemnification • Consultants or Management Agents w/LIHTC experience

  6. Early Exit Considerations • Financial strength of Indemnitor • Continued asset management rights • Owner’s Annual Certification of Compliance • Access to tenant files and Fair Housing documentation • Access to property for inspection • Fund consent requirements

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