The use of tax-exempt volume cap bonds to finance apartment complexes not only lowers the cost of financing but also provides an opportunity to generate tax credit equity with respect to the required minimum of 20% of the units available for low and moderate income tenants. The use of the 80/20 tax-exempt bond structure to generate tax credit has long been popular for projects in New York City, and should be considered in any apartment project financed with volume cap tax-exempt bonds. In a nutshell, a residential rental project with at least 50% of the cost of land and improvements financed with volume cap tax-exempt bonds is eligible for 4% federal low-income housing tax credits outside of the competitive 9% allocation process of the state housing finance agency. In exchange for the 4% federal tax credits, a rental limitation is imposed in addition to the income limitation imposed by the tax-exempt bond program, and the units which generate the 4% tax credits are income and rent restricted for 30 years rather than the income limitation terminating upon the repayment of the bonds. In addition, it is possible to procure 9% federal low-income tax credits through the competitive allocation process for the required 20% low and moderate income units.