Hypothetical Case Study: 4 Percent LIHTC Project

Total project development cost is $16,207,635.

Project overview : The project is an example of a direct investment by a bank in a 4 percent LIHTC project financed with tax-exempt private activity bonds. The project involves the new construction of 128 affordable rental units. The project sponsors commit to set aside 40 percent of the units at or below 60 percent of the AMI, and 100 percent of the units to those at or below 60 percent of AMI.

Tax credit project financing : The tax credits available to this project are calculated in table 6. In this example, a bank invests in a partnership that used 4 percent LIHTC allocations to provide $3,687,340 in equity financing for the construction of this low- income housing project. Just over half of the financing of the project, $8,265,894, was from the sale of tax-exempt private activity bonds.

Sources and Uses of Funds
Equity Calculation


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