Year 15 Exit Strategies For LIHTC Owners

September 23, 2025

Year 15 is a crossroads: refinance, sell, transfer, or restructure—each path has tax and compliance implications.


Map your options early
Start modeling at Year 12–13. Review capital accounts, deferred developer fee status, and any soft-loan covenants. Align your plan with the extended use period and state requirements.


Common paths

  • GP/NP buyout of investor interests
  • Refinance and reinvest in rehab
  • Transfer under a qualified contract (where allowed)
  • Sale to a mission-aligned owner


Tax considerations

Potential gain recognition, depreciation recapture, and capital account effects can surprise owners who wait too long. Anticipate these outcomes and structure agreements that match your goals.


Operations still matter
Keep compliance strong through exit. Clean files and steady financials support valuations and reduce friction.


Considering options? Build a Year-15 plan that protects mission and financial outcomes.

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