Duane Morris partners Bob Archie and Art Momjian are working with Bob Jacobs of RCJ Consulting, LLC, Roy Diamond of Diamond and Associates, Eugene (“Geno”) Schiavo of Kitchen and Associates, and Pierce Keating of Keating Construction Company as a result of HUD authorizing the prepayment and refinancing of Section 202 Direct Loan projects have teamed together to help owners of seasoned Section 202 apartment buildings perform substantial renovations of their properties through the use of a financing structure known as a “lease/acquisition rehab” tax-exempt bond and tax credit structure. In this structure, the existing owner “leases” the apartment building to a technically unrelated limited partnership which leases and the renovates the apartment building through the use of tax-exempt bonds proceeds, 4% federal low-income housing tax credit equity proceeds, and owner’s purchase money mortgage financing. At least 50% of the prepaid rent or acquisition cost along with the renovation of the apartment building must be financed with volume cap tax exempt bonds, in order for the project to qualify for 4% Federal low income housing tax credits to provide equity for the project. Through the “low-income housing tax lease/acquisition rehab” structure, the owner may complete a substantial renovation of its project while reducing the amount of its existing debt service and receiving a developer fee for its services. To discuss whether your project would qualify for the “lease/acquisition rehab” structure contact Bob Archie at (215) 979-1915 or RLArchie@duanemorris.com or Art Momjian at (215) 979-1521 or ajmomjian@duanemorris.com