There’s a lot to like in the new Low-Income Housing Tax Credit (LIHTC) rules enacted into law in July 2025. Changes to the 9% and 4% tax credits, the return of the 100% bonus depreciation and the doubling Freddie Mac’s and Fannie Mae’s investment caps deserve praise.
Will it take time for the changes to set in? Absolutely. Do the states have the administrative muscle to meet the expected activity? Questionable. Perhaps the best way to characterize the industry's mood is cautious optimism.
While some may wait for the dust to settle, some are aggressively moving forward. Consider Berkadia, for example. The #1 GSE and HUD lender by volume recently closed a $100 million multi-investor LIHTC fund with the promise of more to come. To better understand the Berkadia approach, David Leopold, the executive vice president and head of Berkadia Affordable Housing, recently shared his views on the industry and his firm’s recent moves:
How do you describe the industry mood?
There’s understandable caution despite the LIHTC reforms. The changes won’t have an immediate effect. The market still needs to coalesce around the right bond allocations. There’s risk with lowering the private activity bond threshold to 25%, for example. I’m optimistic for the most part. The market is liquid for good projects with good sponsors.
I believe our new fund exemplifies that. It illustrates a flight to quality, which bodes well for the industry.
Describe the new fund. What should be the takeaway for investors and developers?
It’s a $100 million multi-investor fund called Berkadia Housing Partnership XV. The fund is diverse in several respects -- by project type, investor, and sponsor composition and the geographic footprint. The fund will help finance the development and rehabilitation of 434 affordable housing units across six properties in five states – California, Colorado, Maryland, Virginia, and Rhode Island.
What else distinguishes the fund?
Two things. First, it illustrates our evolution as a tax credit syndicator. We’re now one of the very few fully integrated financial services platforms, combining mortgage banking, investment sales and tax credit syndication. We’ve taken a very measured, deliberate path to growth.
Second, the new fund underscores our growth strategy by being the first in series of multi funds delivered on an annual cadence. Yes, we’ve executed multi funds in the past, 14 to be exact. But they were always originated on an opportunistic basis. The shift to an annual tempo has already begun. We anticipate launching multi fund number 16 in Q1 of 2026.
Which project in the new fund would you single out?
That’s a tough call because they’re all so worthy! However, I would tap Dorado Senior Apartments in Buena Park, CA. My mom is a senior and I know she would definitely love living there. It’s a preservation project in a market where affordability is a major challenge. Our project participation there has been humbling, as we were instrumental in selling the property, as well as financing the bridge acquisition loan and providing the LIHTC acquisition rehab loan and equity.
The Dorado property demonstrates the wraparound services we can provide in project delivery and deal structuring.
How do you advise a developers or investor today?
With all the LIHTC changes now in play, we’re entering a period of increasing complexity and volatility. More than ever, align yourself with service providers that can rapidly pivot and provide comprehensive solutions up and down the capital stack.
Select a financing partner that helps get the most out of any subsidy and delivers the goods from concept to closing with confidence, timeliness and discipline.
The editorial staff had no role in this post's creation.