Construction-period rate caps
Sized and priced to the lender's requirements.
Affordable housing & LIHTC
Evercrest is the independent hedging advisor for affordable housing developers. We structure and price the caps and swaps that 4% LIHTC tax-exempt bond transactions might require, negotiate your ISDA, and make sure you are not overpaying the bank.
Overview
Most 4% LIHTC deals carry interest rate risk from the day the bonds price to the day the loan converts. A lender may require a hedge, and many borrowers want one even when it is not required. The instrument might be a rate cap during construction, a forward-starting swap to lock the permanent rate, or both. Each one is priced by a bank that sits on the other side of the trade, and the ISDA that documents it is not standard, despite what the bank may tell you. An independent advisor changes the economics. We break the bank's pricing into its components, negotiate the credit charge, and routinely save borrowers basis points on the all-in rate, which on a multiyear financing is real money returned to the deal.
Whether you are a repeat developer with a pipeline or closing your first tax-exempt bond deal, we bring the same process: understand the asset plan and the bond structure, recommend the right hedge, run a competitive or negotiated procurement, and hold the bank to a fair, transparent number at closing.
What we do
Sized and priced to the lender's requirements.
Lock the permanent rate ahead of conversion.
Protect your non-recourse structure in the documentation.
Competitive bids and mid checks.
Model both against your asset plan and recommend the fit.
Effectiveness testing under ASC 815/820 where needed.
Common questions
Get a read before you sign.