Overview
Tax-credit equity rarely arrives at construction closing. Bridge debt covers the gap between draws and equity pay-in milestones. This hub aggregates the tax-credit-bridge pillar, the tax-credit bridge sizing calculator, sibling Q&As, and the IRS- and HUD-anchored glossary.
Why this matters
LIHTC equity pay-in is typically structured 15% at closing, 25% at 50% completion, 25% at 100% completion, 25% at stabilization, and 10% at year-3 audit. The bridge sizes off the executed LP equity commitment, not the final takeout.
Pricing of tax credits (cents per credit) and recapture risk both move with each compliance period. Bridge sizing should reflect current market pricing, not the underwriting baseline.
How to use this hub
Start with the pillar for the framework across LIHTC, HTC, NMTC, and IRA energy credits. Use the tax-credit bridge sizing calculator at term-sheet stage to size the bridge against the executed equity pay-in or §6418 transfer agreement, formulas and worked examples are provided per credit type. Drop into the Q&A library for credit-specific mechanics and the glossary for IRS, HUD, NPS, and CDFI terminology.
This hub is sponsor-POV process commentary, not tax or legal advice. Tax-credit financing requires syndication counsel from kickoff through final pay-in.
Pillar guide
Sponsor-side tool
Sibling Q&As
How does a LIHTC bridge loan work in an affordable-housing capital stack?
A LIHTC bridge loan provides interim capital secured by future LIHTC equity pay-ins.
How does a Historic Tax Credit (HTC) bridge financing structure work?
An HTC bridge advances capital against the 20% federal Historic Tax Credit equity pay-in. Master-lease and direct-investor structures are the two dominant HTC.
How does the NMTC leverage loan structure work for a CRE project?
The NMTC leverage loan structure routes a bank loan and tax-credit equity through a Community Development Entity (CDE) to a Qualified Active Low-Income.
How does IRA tax credit transferability work for CRE energy projects?
The Inflation Reduction Act's transferability provision (§6418) lets eligible energy tax credits be sold for cash to unrelated parties. The transfer market has.
How is tax credit equity priced?
Tax credit equity pricing is expressed as cents per dollar of credit (e.g., $0.85 means the investor pays 85¢ per dollar of future credit).
How does a tax credit bridge differ from a construction loan?
A construction loan funds hard and soft costs against a draw schedule and is taken out by permanent debt at stabilization.
How does tax credit recapture risk affect bridge lender underwriting?
Tax credit recapture occurs when compliance is lost during the recapture period, 15 years for LIHTC, 5 years for HTC, 7 years for NMTC.
Glossary
Construction financing from the first draw to repayment
Financing for commercial development, with attention to the budget, draw process, guarantees and permanent loan or sale.
Commercial PACE (CPACE) financing
What CPACE finances, where it is authorized (40+ states), how it sits in the capital stack, what mortgagee consent really requires.
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