Interactive decision tools, exit strategy analysis, and expert advisory to help general partners, investors, and syndicators maximize value at Year 15 and beyond.
Units Reaching Y15 (2020–2026)
Properties Resyndicated
Convert to Market Rate
When Planning Should Start
Interactive Tool
Answer a few questions about your property and partnership, and we'll recommend the most suitable exit strategies with a side-by-side comparison.
Exit Strategies
Every LIHTC property reaching Year 15 faces a strategic decision. Understanding the options — and their tax, financial, and mission implications — is essential.
Apply for new 4% or 9% LIHTC allocation, bring in new investor equity to fund rehabilitation, and extend the property's affordability period. Requires a Physical Needs Assessment, QAP application, and new partnership formation. Best for properties needing $25K+ per unit in capital improvements.
GP exercises Right of First Refusal or purchase option to acquire LP's interest, consolidates ownership, and refinances with conventional or agency debt. Provides maximum long-term flexibility. Buyout price typically calculated as outstanding debt plus exit taxes owed by LP.
Sell the property or partnership interests to an unrelated buyer — whether a for-profit owner, nonprofit preservation buyer, or another LIHTC developer. Buyer demand is robust, with cap rates of 225–350 bps over long-term debt for family properties. Section 8 subsidy improves pricing 50–100 bps.
After the Extended Use Period or through the Qualified Contract process, convert to market-rate housing. Rarely pursued — only ~5% of Year 15 properties choose this path. Requires careful analysis of LURA, state restrictions, and other funding source covenants that often extend affordability beyond the IRS minimum.
Planning Timeline
Year 15 planning should begin by Year 10–11 to allow sufficient time for analysis, negotiations, and approvals.
Review the Limited Partnership Agreement for buyout options, ROFR provisions, and distribution waterfalls. Commission an initial Capital Needs Assessment. Evaluate LP capital accounts and begin modeling exit tax implications for all parties.
Open dialogue with the LP/syndicator about exit preferences and timing. Conduct a market evaluation — assess occupancy, comp rents, and new supply. Run cost-benefit analyses for each exit strategy (resyndication, buyout, sale, hold). Engage legal counsel to review all governing documents.
For resyndication: commission a Physical Needs Assessment, engage architects, begin QAP application prep. For buyout: negotiate price with LP, secure refinancing commitments. For sale: engage broker for BOV, begin marketing. Check with state HFA about soft money reuse options.
Complete all third-party reports. Secure HFA and lender approvals for chosen disposition. If resyndicating, submit LIHTC application during the state's allocation round. Begin investor placement for new deal. Prepare tenant notifications and relocation plans if rehabilitation requires displacement.
Complete LP buyout, property sale, or resyndication closing. File final compliance reports for the initial compliance period. Ensure seamless transition to Extended Use Period. Re-certify all tenants against current AMI limits if resyndicating. Dissolve or restructure the existing partnership.
The Extended Use Period (typically 15 additional years) continues affordability restrictions. Monitor ongoing compliance, debt service, and capital reserves. Evaluate long-term hold vs. future disposition. The property remains subject to LURA and any state-imposed restrictions beyond the federal minimum.
Due Diligence
Essential items to gather and review before making your Year 15 decision.
Monthly updates on exit strategies, market trends, policy changes, and case studies.
Insights & Analysis
Expert Advisory
Whether you're a GP planning a buyout, a syndicator managing a portfolio of maturing assets, or a nonprofit preserving affordable housing — we structure the optimal exit to maximize value for all parties.