THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2017 and 2016
(1) Operating deficit guarantee - Orange 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 Orange Preservation’s partnership agreement. This guarantee ended in December 2017. (2) Tax credit recapture guarantee - Under certain circumstances, Orange 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. Roundtree’s land acquisition and construction was financed with tax-exempt bonds, federal LIHTC issued by the District of Columbia Housing Finance Agency, along with federal and state investment tax credits and a seller loan from Allen Chapel African Methodist Episcopal Church. VOV-NHPF I provided certain guarantees to facilitate this transaction. The most significant guarantees are: (1) Operating deficit guarantee - VOV-NHPF I 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 Roundtree’s partnership agreement. (2) Tax credit recapture guarantee - Under certain circumstances, VOV-NHPF I 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. Bayview Preservation’s acquisition and renovation work is being financed with a note financed by bonds issued by the Connecticut Housing Finance Authority, federal and state tax credits, and a purchase money loan from Bayview, the seller of the property. NHPF and/or Bayview GP provided certain guarantees to facilitate this transaction. The most significant guarantees are: (1) Operating deficit guarantee - Bayview GP guaranteed to pay all operating deficits, not to exceed a specified amount and time period, after the property achieves stabilization as defined in Bayview Preservation’s partnership agreement. (2) Tax credit recapture guarantee - Under certain circumstances, Bayview 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. Hollybush Preservation’s acquisition and renovation work will be financed with a note financed by tax-exempt bonds, which are intended to be the source for permanent financing, federal tax LIHTC issued by the New Jersey Housing Finance Agency, federal and state investment tax credits, and a purchase money loan from Hollybush, the seller of the property. NHPF and/or Hollybush GP provided certain guarantees to facilitate this transaction. The most significant guarantees are:
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