THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2019 and 2018
NOTE 17 - COMMITMENTS AND CONTINGENCIES Guarantees
During the normal course of owning, rehabilitating and operating multifamily affordable housing properties, NHPF makes certain guarantees and enters into agreements containing certain obligations. The typical guarantees are: Operating Deficit Guarantee With the exception of Forest, NHPF is obligated to fund operating deficits beginning at a specified time, frequently rental stabilization not to exceed a specified time and amount. In the case of Forest, NHPF has guaranteed the property will operate at a sustainable level for the entire 15-year tax credit compliance period. Tax Credit Recapture These are summarized below: Under certain circumstances, the GP may be required to repurchase the equity investor’s interest if the property does not generate the promised amount of housing tax credits on schedule. Construction Completion NHPF is responsible for any cost overruns relating to development cost, bills, expenses, charges, cost and fees relating to the construction of or rehabilitation completion of the property.
The following table summarizes the guarantees by property:
Operating Deficit Guarantee
Tax Credit Recapture Guarantee
Construction Completion Guarantee
Type
Property
Bayview Preservation
LIHTC LIHTC
Yes
Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
N/A Yes Yes N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
Benning
Yes
Bolton North
LIHTC Yes – Not yet active LIHTC Yes – Not yet active
Cleme
Forest Park
LIHTC LIHTC LIHTC LIHTC LIHTC LIHTC LIHTC LIHTC LIHTC LIHTC LIHTC
No
Foxwood Preservation
Yes Yes Yes Yes
Harvest Homes
Hollybush Preservation Mark Twain NHPF Orange Preservation
No
Parkchester Plaza B II Roundtree Ship’s Cove
Yes Yes Yes Yes
St Luke’s Preservation
No
Takoma
LIHTC Yes – Not yet active
Yes
Walnut Square
LIHTC LIHTC
Yes
N/A N/A
Woodmont
Yes
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