Leveraging Historic Tax Credits in Real Estate Finance

CPE credit is not offered on this program

Recording of a 90-minute premium CLE video webinar with Q&A


Conducted on Thursday, June 24, 2021

Recorded event now available

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Course Materials

This CLE course will provide an overview of the Federal Historic Tax Credits (HTC) program. The panel will summarize the HTC program and examine how rehabilitation projects qualify for the HTC, how to finance projects using the HTC, and how the HTC can be combined with other tax credit and subsidy programs.

Description

Given the challenges involved in renovating historic buildings, the HTC can provide a vital source of additional financing. Historic restoration projects naturally cost substantially more than newly constructed buildings but must compete equally for commercial success. The HTC can level the playing field.

The HTC provides a 20 percent tax credit for certain costs involved in restoring historic buildings. Only certain buildings qualify for the HTC, and developers are required to adhere to the guidelines of the National Park Service to ensure their restoration plans are HTC eligible.

The HTC can be monetized by third-party equity investors that provide much needed additional capital to give a restoration project a greater chance of success. The panel will discuss the basics of an HTC investment and the possible structures for channeling the HTC investor’s equity into the project. The panel will also address the roles of and issues that arise with bridge and conventional HTC financing arrangements as well as tax-exempt entity participation complications.

The HTC can be further enhanced with additional tax credit financing and other funding sources like low-income housing tax credits and grants. Each program interacts with the HTC differently, and the panel will review the primary issues that can arise when combining various subsidy funding sources with the HTC.

Listen as our authoritative panel discusses the structuring and applications of HTCs.

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Outline

  1. Historic Tax Credits
    1. Overview of the HTC
    2. How a building and its rehabilitation qualifies for HTC
    3. HTC eligible rehabilitation costs
    4. HTC recapture
  2. Financing with the HTC
    1. HTC equity and investment structure
    2. HTC bridge loans
    3. Interplay between HTC and debt financing
    4. Tax-exempt use limitations
  3. Combining the HTC with other tax credit and subsidy programs
    1. State HTC
    2. New Markets Tax Credits
    3. Low Income Housing Tax Credits
    4. HUD/USDA loans
    5. Grants
    6. Energy Tax Credits and CPACE Loans
    7. Opportunity Zone Investment

Benefits

The panel will review these and other key issues:

  • What are the basics of the HTC program?
  • How can a rehabilitation project benefit from a third-party HTC equity investment?
  • How can the HTC be supplemented and combined with other tax credit and subsidy programs?

Faculty

Hered, A. Ann
A. Ann Hered

Attorney
Butler Snow

Ms. Hered is an experienced Public Finance attorney with a focus in New Markets Tax Credits and bonds.

 |  Read More
Hodson, Thane
Thane R. Hodson

Attorney
Butler Snow

Mr. Hodson assists clients with structuring new markets tax credits financings, including upper-tier lending...  |  Read More

Parker, Binford
Binford E. (Trey) Parker, III

Attorney
Butler Snow

Mr. Parker is an attorney in our Public Finance, Tax Incentives and Credit Markets Group. He is located in our New...  |  Read More

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