In March I posted a chart that showed how severe a shift has occurred since 2005 in the funding sources for 9% tax credit developments. Tax credit equity has decreased by one-third and public agency soft loans have doubled as a share of total development costs (TDC). CTCAC released its 2011 Annual Report last month, and the trend has continued. While the average TDC for the 121 awarded projects fell by 4.2% from 2010 to 2011, tax credit equity and public agency soft loans both declined less than 1% – the major decline was in commercial loans, and there was some new funding from “Tranche B” loans, backed by Section 8 rental subsidies.
% TDC 2005 2006 2007 2008 2009 2010 2011
Soft Loans 17.8% 14.7% 16.4% 21.2% 29.2% 39.8% 38.1%
TC Equity 67.5% 68.7% 64.2% 57.1% 50.5% 47.3% 46.7%
The chart above clearly shows the continuing trend, which will probably be evident through 2012 as well. The table above shows the percentage of TDC that soft loans and equity covered over the past seven years and how pronounced the trend toward public agency loans has been – more than doubling from 2007 to 2010! Read more