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Syndication

Low Income Housing Tax Credits (“credits”) are claimed annually over an accelerated 10-year period.  The value of the credits is converted to equity raised through the sale of the credits. The equity raised is needed immediately to fund development costs. A syndicator, or credit purchaser, acting as an investment group representative, assembles a group of investors interested in purchasing the rights to future credits in exchange for immediate cash. The syndicator screens all potential investments and monitors the ongoing compliance of the investment portfolio.  The investment group invests in funds established by the syndicator allowing for diversification across several rental markets.  A fund is formed as a limited liability company owning 99+% of the property through a limited partnership.  Limited partners are typically limited to passive investment roles, thus utilizing asset management services to maximize their return on investment.

Resources:

Office of the Comptroller of the Currency- U.S. Department of Treasury

cra investments syndication