Why LIHTC Development?

LIHTC was created by the U.S. Congress in 1986 to promote the development of affordable housing for low-income individuals and families.  LIHTC is a powerful financing tool that developers use to create quality affordable rental housing and spur community development in coordination with LIHTC allocating agencies. 

LIHTC and other financing structures enable developers to build and let apartments at rents well below market.  In exchange for these funding sources, developers commit to long-term affordability.  LIHTC housing developments are typically more than 60 apartments in urban areas and at least 35 apartments in rural areas due to the complexity and related costs of the financing structure.  Developers must navigate the financing process and provide guarantees for substantial loans.  Developers earn a fee which is typically paid out at benchmarks from deal closing to stabilized occupancy.  

Why Next Gen?

LIHTC has long been the primary driver behind the development of affordable housing by providing the capital necessary to make these developments financially feasible each year. However, the technical knowledge, high cost of entry, and relationships required to develop tax credit properties has historically made it challenging for new developers, particularly BIPOC developers, to access this resource.

The Next Gen initiative seeks to address this disparity by lowering the systematic barriers emerging developers encounter in three keyways:

1. An in-depth training series will be provided to program participants. This includes 160 hours of training curriculum delivered by LISC on affordable housing development and housing tax credits, with additions to provide specific training on the Illinois Housing Development Authority’s (IHDA) tax credit program and processes. LISC will also coordinate networking opportunities for participants to connect with seasoned industry professionals. 

2. 1:1 technical assistance will be provided to each participant or development. The technical assistance will be curated to participants’ specific needs with a focus on building their capacity and their potential LIHTC development projects.

3. Developers who complete the training program will be eligible to apply for financing under a pre-development loan program, funded by IHDA and administered by LISC, to support the pre-construction and planning costs necessary to establish project design, scope, site control, and other early costs. Participation in the training program does not guarantee that a loan will be provided.

Who Should Apply?

Class Structure

Next Gen includes approximately 160 hours of training and individualized technical assistance.  It combines industry-leading content and real-world education as a platform for supporting the next generation of underrepresented real estate professionals to contribute tangible and lasting benefits to their communities.

Modules will include real estate development topics focused on LIHTC development, including: 

•       Finance and deal structuring
•       LIHTC application process
•       Legal structure and protections
•       Managing a large team
•       Property management v. asset management

Cohort members will have access to related training, industry speakers, and networking events. The program also features the basics of structuring a real estate business and project-specific work that students will develop, leading towards access to predevelopment financing and individualized coaching. 

Schedule

Classes will be a combination of in-person and hybrid. Classes will begin February 2025 and go through November 2025. Participants should be prepared to spend 2 full days participating in Next Gen sessions and several additional hours with a technical advisor each month throughout the program. A detailed schedule will be provided at the beginning of the program in February.

Students are expected to arrive by the class start time and remain through the entirety of each session. A written notification should be submitted to the Next Gen administrator at least one week prior to an absence so that the instructor and Next Gen team can prepare accordingly. Participants are also expected to meaningfully engage during sessions and avoid personal and professional distractions to the extent possible. More than two absences or lack of engagement may lead to adjustments in benefits available in the program.

Applications are due Friday, December 13, 2024, by 11:59 p.m. The Next Gen 2025 cohort is limited to 15 participants. 

This program is intended to provide support for emerging for-profit and nonprofit housing developers located in Illinois or with LIHTC projects in Illinois. If selected to participate in this capacity-building initiative, you will be notified via email.

Privacy: Information provided through the application process is the responsibility of each applicant. Applications submitted to the portal remain confidential to the general public and any fellow applicants. Applicants will not hold LISC or IHDA, their respective affiliates, or their or any of their affiliate’s respective members, partners, officers, employees, and agents liable for any losses, damages, costs, or expenses of any kind relating to the use or the adequacy, accuracy, or completeness of any information input in the form. For further information please see LISC’s privacy policy. Data entered on this secure form utilizes Form Assembly.

Conflict of Interest: Current directors, officers, employees and contractors of LISC or IHDA and any such person’s family members (spouse, domestic partner, parents, children, grandchildren, great-grandchildren, and spouses of children, grandchildren, and great-grandchildren) are not eligible to apply.

Monitoring: LISC may monitor and conduct evaluation activity under this affordable housing development capacity-building initiative. This might involve a review of quantitative or qualitative data needed to understand the impact of the initiative.

Submission Guidance: LISC cannot accept changes to your application once it has been submitted, so please review it carefully. Your work may not be saved if you leave the web page before submitting the application. You may also lose your work if your internet is disconnected or because of other potential web browser issues.

You will see a confirmation page after successful completion of this application.

Personal Information

Please provide a one-page (max 350 words) letter of interest discussing why you are suited for inclusion in the Next Gen program.  The Letter of Interest should minimally address the following:

o   Why are you interested in the Next Gen program and what do you hope to gain from this program?

o   What applicable real estate and/ or LIHTC experience do you have?

o   What specific characteristics make you a good candidate for the Next Gen Program?

o   How do you plan to use the knowledge gained from the program?

o   How will your participation in the program help fulfill NextGen’s mission of increasing the capacity of emerging developers?         

o   How is increasing diversity among developers beneficial to both the development industry and Illinois residents in need of affordable housing? 

o   Explain how your race or ethnic origin have negatively impacted your ability to access capital for your business or grow your business. Describe any examples of such negative impact (e.g., incidents of discrimination or bias you have experienced that have curtailed or limited your business prospects). These examples should come from your individual experience and not describe societal discrimination or bias generally.  Clearly describing your experiences attempting to access capital for your business or grow your business is an important part of determining eligibility for this program.

Please provide 1 to 2 letters of recommendation on recommender’s company/ business letterhead addressed to the Next Gen Program Selection Committee.  Letters of recommendation should be from a professional / business relationship such as a lender, community leader, elected official, instructor (among others) and should speak to the following:

o   Nature of relationship with the applicant and number of years known.

o   Comments and observations on applicant’s quality of work and character.

o   Specific qualifications that you have in real estate development that demonstrates capability for LIHTC developer.

o   Comments on why the application should be considered for the Next Gen program within the context of the program's focus and building the capacity of emerging developers. 

·       Proposed Project Information

Please provide as much information as you have available describing a project you would like to develop using LIHTC. 

·       1 page concept narrative (required)

·       Excel Proforma (required) please provide

o   Sources & uses

o   Rents

o   Operating expenses

o   Cash flow

·       Renderings/sketches/photos, if available

·      (OPTIONAL) Real Estate Development Company Information 

PlePlease provide as much information as you have available describing your real estate development business. 

•                 Summary business plan (one page/ 350 words max)

•                 Excel portfolio description by building including.

o   Description including location and year purchased, and rehab performed if any.

o   Building information (number of units, rents, bedroom count)

o   Financial information (estimated value, equity, loan balances)

o   Operating information (rent per year, debt, typical expenses, cash flow)

o   Photos

•                 Excel balance sheet for the company