THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2017 and 2016
(2) Tax credit recapture guarantee - Under certain circumstances, Preservation Partners 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. Walnut Square’s reconstruction work was financed with a mortgage note and federal LIHTC issued by the State of Louisiana. NHPF and/or Walnut 209 provided certain guarantees to facilitate this transaction. The most significant guarantees are: (1) Tax credit recapture guarantee - Under certain circumstances, Walnut 209 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. Foxwood Preservation’s acquisition and renovation work was financed with a mortgage note financed by tax-exempt bonds, federal LIHTC issued by the Pennsylvania Housing Finance Agency, and an acquisition loan from Foxwood, the seller of the property. NHPF and/or Foxwood GP provided certain guarantees to facilitate this transaction. The most significant guarantees are: (1) Tax credit recapture guarantee - Under certain circumstances, Foxwood 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. St. Luke’s Preservation’s acquisition and renovation work was financed with a mortgage note financed by tax-exempt bonds, federal and state LIHTC issued by the Missouri Housing Finance Agency, federal and state historic tax credits, and a purchase money loan from St. Luke’s, the seller of the property. NHPF and/or St. Luke’s GP provided certain guarantees to facilitate this transaction. The most significant guarantees are: (1) Operating deficit guarantee - St. Luke’s GP has guaranteed to pay all operating deficits, not to exceed a specified amount and time period, after the property achieves a debt service ratio as defined in St. Luke’s Preservation’s partnership agreement. (2) Tax credit recapture guarantee - Under certain circumstances, St. Luke’s 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. Orange Preservation’s acquisition and renovation work was financed with a note financed by tax- exempt bonds, federal LIHTC issued by the New Jersey Housing Finance Agency, federal investment tax credits, and a purchase money loan from Orange, the seller of the property. NHPF and/or Orange GP provided certain guarantees to facilitate this transaction. The most significant guarantees are:
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