I attended the IPED low income housing tax credit (LIHTC) conference in Boston last week, which focused on tax credit property dispositions. 

The conference speakers reinforced that syndicators/ investors are holding most of the cards lately.  Frankly, even the investors represented on panels seemed to avoid directly answering questions.  That said, each investor is funding much fewer transactions because of more limited equity availability and the investors behind the investor are much more risk adverse.  While the syndicators/ investors are in stronger negotiating positions than the past few years, they are also impacted by the limited equity to invest.  As such, the investors are hand picking the best deals for the limited equity available.  Basic supply and demand.  After writing a post like this, it makes sense to wonder when this will change recognizing all participants in the affordable housing industry want this to improve including syndicators (they really want to be involved in more deals, but for the lack of equity).  While there is no easy answer, one panel noted that the impact of the troubled commercial mortgage backed securities (CMBS) still has not been felt yet and only after the economy recovers from the CMBS issue will the equity markets improve.

On a more positive note, the presenters felt comfortable that there will be more Federal stimulus package assistance to the industry, which has been a critical life boat to-date.

For various reasons, there has been an increase in general partner ownership interest transfers in tax credit deals.  If there is a deferred developer’s fee, one thing to bear in mind as the incoming general partner is that you may have to fund the deferred developer’s fee from your own funds.  Accordingly, you should consult with your attorney on the impact of a deferred developer’s fee and how best to structure the transaction.