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Frequently Asked Questions for Tax Credit Development Financing
Why should I use WHEDA financing? We can provide construction and permanent financing for your 9% tax credit development. You are able to submit your tax credit application and financing application to us at the same time. We will process your financing application immediately after your development is awarded a tax credit allocation. The loan approval process can often be completed within 30 days. Our tax credit financing offers competitive secondary market rates and terms. How does the construction
financing differ from the permanent financing? We provide a commitment for the construction financing and a take-out commitment for the permanent financing. We use our internal source of funds for construction financing. Upon completion of construction and achieving specific permanent funding conditions, the permanent loan is closed with a secondary market purchaser. Is there any loan size limitation
with this product? The loan amount available ranges from $500,000 to $5,000,000. What if my development does
not get a 9% tax credit allocation? Can I still finance the development
with WHEDA? This financing depends on your receiving an allocation of 9% credits. However, the development may be eligible for our Tax-Exempt Bond Financing product which can be used with 4% tax credits that are not a part of the state's allocation and therefore not part of the competitive allocation process. Ask your Senior Underwriter for assistance in determining if this would work in your particular situation. Am I able to use Home funds
along with WHEDA's tax credit financing? Use of Home funds is very common in conjunction with tax credit financing. In fact, you can submit your application for Home funding along with your tax credit application and WHEDA's financing application. The availability of Home funding is separate from the allocation of tax credits or WHEDA tax credit financing. I did not obtain WHEDA construction
financing for my tax credit development. Can I still obtain WHEDA permanent
financing? Yes. You need to submit an application for financing to WHEDA. Talk to one of our Senior Underwriters for more specifics. Are there any other benefits
to using WHEDA financing? Because the construction loan and the permanent loan are provided by different lenders, the financing costs (points) for the construction and permanent loan can be included in the eligible basis. This may allow you to achieve a greater tax credit allocation for your development. Using our tax credit financing allows you to work with just one lender for construction, permanent, and Home financing. This combination of financing options may save you time and money in financing your tax credit development.
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