NAHMA LIHTC White Paper

I discussed the National Affordable Housing Management Association’s 2 page position paper on LIHTC stabilization yesterday. In general, I felt it accurately described the challenges (tax credits have no value, knowledge base and infrastructure at risk) but that it did not necessarily prescribe what is required for a full cure. Due to the collapse of demand, the only way to stimulate additional demand is to increase CRA requirements and perhaps accept credits as some type of collateral for TARP. Like shredding old bills, removing these credits from active trading might help reflate the market.

Fears of a growing LIHTC meltdown were echoed in an internal company call recently, in which it was disclosed LIHTC originations for 2009 are expected to be <15% of 2006. This is a pretty gutting forecast and I think it is fair to ask how LIHTC businesses and investments should be valued through 2012.

Regardless, please read NAHMA’s thoughts on stabilizing LIHTC and comment below.