What type of financing is this?
This financing, known as the 501c3 conduit bonds, is designed to preserve or convert existing multi-family housing for long-term affordability. It offers a competitive alternative to agency and private debt, suitable for financing new construction and age-restricted communities. Properties meeting specific criteria can utilize unrated tax-exempt financing, often enabling owners to unlock equity through sales to new buyers. Transactions are based on fair market values with minimal restrictions and can typically close within 90-120 days.
*This is not a tax credit program
What this is not:
This program does not function as a commercial loan, nor does it involve private or hard money. It is also not a form of funding provided by any traditional lender. Instead, it offers an alternative financing solution distinct from conventional lending methods.
Who is this program for?
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Have shovel-ready projects, including plans, permits, zoning, and usage approvals.
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Recognize that they will be selling the project to an investor through the bond program.
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Understand that this financing is not intended for "for-profit" ventures.
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Acknowledge they are encouraged, though not required, to remain involved and complete the project.
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Accept that upon completion, the project will be owned and managed by a nonprofit 501(c)(3) organization or, in some cases, a REIT.
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Are prepared to demonstrate past performance on completed projects to validate their experience.
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Are ready to provide a comprehensive pitch deck, including plans, permits, zoning information, and any support obtained from local housing authorities or municipalities (e.g., Section 8, senior living, veterans).
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Can supply a 3-5 year proforma or, at the very least, a projected rent roll.
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Ensure that at least 30% of the project falls under one of the specified categories.
Acceptable Projects:
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New construction of single-family residences, townhomes, and multifamily units, including duplexes, quads, and six-plexes.
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Existing multifamily properties, with value-add opportunities or conversions being particularly well-suited for this program.
Minimum Criteria For Existing Structures
Drawing on our of experience in this field, we have established the following criteria based on our completed transactions:
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Existing properties must be in good physical condition, as verified by a third-party report.
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Properties should be well-occupied with a proven history of economic performance or should be actively leasing up.
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Properties should be new or relatively new in age.
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The current financing structure must be unrestricted, allowing for debt repayment at closing. This means there should be no compliance issues, debt restrictions, or yield maintenance penalties that could impact the economics. Subordinated debt may be accepted depending on the terms.
