RAP Program now available for existing tax credit properties

BOSTON, AUG. 18, 2014 --- Nonprofit developers who are using or who have used tax credits to develop affordable rental housing should consider using MHP's Housing Reserve Assurance Program (Housing RAP) in order add more working capital to their bottom line.

Used in combination with MHP permanent first-mortgage financing, Housing RAP provides a credit facility that reduces the amount of cash-funded reserves a developer needs to put aside by up to 80 percent. This helps developers increase their cash liquidity while providing tax credit investors with the same assurance that additional funds will be available during the life of the loan if needed.

A $6 million program funded by MHP and The Boston Foundation, Housing RAP has already helped five community development organizations gain access to $1.2 million in cash that would otherwise have gone toward operating or other long-term reserves.

Program expanded to existing projects

Now, Housing RAP can also be used by nonprofit developers of completed tax-credit developments financed by MHP that are performing well. With Housing RAP, a nonprofit tax-credit developer can withdraw funds from its cash-funded reserves and use MHP's Housing RAP credit facility to provide the same assurances to its tax-credit investors.

Housing RAP can also be used as a gap-filler to avoid deferring more of a developer's fee prior to closing as a result of construction cost overruns, costly closing delays and other unanticipated costs.

"Housing RAP is a way for nonprofit developers to add more working capital to their balance sheets so they can pursue more development opportunities, while maintaining the same safety net reserves for their project and their investors," said David Rockwell, MHP's director of lending.

More information

For more information about MHP permanent financing and Housing RAP, read the RAP term sheet  or contact Director of Business Development Nancy McCafferty at nmccafferty@mhp.net.