View NEF Inc.'s brochure "Developing a Year 15 Transition Plan"

It's year-15 for your project. Now what? That's the question more and more sponsors are beginning to ask themselves as their projects move into the final years of tax-credit compliance, and the issues surrounding disposition begin to loom. Can the property be maintained as affordable housing? Does it need additional funding to remain viable? Does the GP want to stay involved in the property? Is there a reasonable exit strategy for investors that takes into account the needs of residents and the community?

At NEF, Inc., we know there is nothing simple about the dispositions process...we know because we've done it. We funded our first project in 1987, so we are among the first syndicators to see projects move through the 15-year compliance period and to dispositions. With that experience, it's clear that the way a syndicator works to wind down a project is just as important as the price paid to acquire it, the technical assistance offered to structure it and the asset management support provided to maintain it. With an 1,100-project portfolio, we really have seen it all.

To make sure we're addressing both sponsor and investor needs on this issue, NEF, Inc. has created a specialty group within its Transaction and Asset Operations Department to focus exclusively on dispositions. We have established basic guidelines on how to handle the process, but at the same time, have maintained the kind of flexibility that allows us to focus on the specific financial, physical and operational issues related to a given project.

We begin our initial discussions with sponsors several years in advance of year-15, and we work closely with investors to make sure their interests are protected as well. For us, there is no room for a cookie-cutter approach to dispositions, only a collaborative one.

"Dispositions is critical to the future of affordable housing across the country," commented Judy Schneider, NEF, Inc. vice president and chief credit officer. "It's a complicated balancing act, but one we want to make sure works for sponsors, investors, residents and the community at large."

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Key Contacts

Judy Schneider
Senior Vice President &
Chief Underwriter
312-697-6139
jschneider@nefinc.org

Meghann Rowley
Dispositions Manager
312-697-6471
mrowley@nefinc.org

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