Year 15
In 1986, the U.S. Congress passed legislation creating the Low Income Housing Tax Credit (LIHTC), which is a mechanism to encourage private investment in the rehabilitation or new construction of housing for low income people. Many Bay Area nonprofit housing and community development corporations took advantage of this program to build thousands of housing units in hundreds of properties throughout the region. The properties are owned by partnerships formed by the nonprofit sponsors and their limited partner investors. Click here to read more about Tax Credit Basics.
'Year 15' refers to the final year of the fifteen year compliance period imposed by the LIHTC program, which is the time when many nonprofit sponsors will have the opportunity to buy out their limited partners and maintain the property as affordable housing resources. How? Well, that will vary from property to property, depending on a number of factors, including the original partnership agreement, the lenders, the tax situation of the partnership, and the local real estate market.
Bay Area LISC invites nonprofit sponsors of LIHTC projects, and their advisors, to join a listserve to exchange information and otherwise prepare for Year 15. We will use this section of the Community Development Exchange website to share tools that can assist those involved to successfully navigate through a Year 15 transaction.
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Year 15 Review Worksheet
LISC recommends that groups begin planning for Year 15 several years in advance. Use this worksheet as a guide to possible red flags.
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