Phoenix Realty Group: Services

Phoenix Realty Tax Credit Funds

Tax Credit Affordable Housing Funds
Phoenix Realty Group has financed the development of affordable housing through $112 million in tax credit funds. As a syndicator of federal low-income housing tax credits, Phoenix originates funds that bring together institutional investors and experienced for-profit and not-for-profit developers to address the affordable housing needs of lower-income families, seniors and special needs citizens.

We specialize in the most challenged properties that inexperienced or volume-oriented investors cannot address. These include properties with multiple layers of subsidy and use restrictions, special needs properties with unique populations and deep rent skewing, and troubled or defaulted properties requiring loan restructuring.

PRG and its principals have been at the forefront of innovation in the affordable housing industry for over 25 years, including creating the first public fund for investment in tax credit properties, the first insured fund for investment in tax credit properties, and closing the first decoupling of a HUD Section 236 financed property. The principals of PRG were also among the first to invest in tax credit properties at the program's inception in 1987 and have invested in more than 100,000 rental units in 48 states and Puerto Rico.

PRG brings projects into portfolios and finances them with equity capital from the funds it manages including:

Phoenix Realty California Properties
Phoenix Realty Tax Credit Fund II
Phoenix Realty Tax Credit Fund IV

Phoenix Realty Tax Credit Fund V

Phoenix Realty Tax Credit Fund VI

Phoenix Realty Tax Credit Fund VII

Definition of a Tax Fund

The basic premise of the federal tax credit program is simple; investors receive dollar-for-dollar credits against their federal income taxes in return for providing much-needed equity financing for affordable housing properties.

Federal tax credits are allocated by each state's housing agency to developers of affordable housing based on the cost of the property less land and non-eligible expenses. The property generates tax credits once construction is completed and it is occupied by the required number of qualifying tenants (generally 12-18 months after construction begins). At this point, the property generates a steady stream of tax credits for the next 10 years, as long as it continues to rent to qualified tenants. Investors must meet suitability requirements as established by their respective states, which can be found in a partnership's prospectus.

The goal of the program is to reduce the development cost of affordable housing by capitalizing on the strong demand for tax benefits by U.S. Corporations. Since its inception, the housing credit has gained the acceptance of state government authorities and affordable housing has become the largest segment of the multi-family housing market.

In order to qualify for housing credits, a property must meet certain government guidelines relating to, among other things, rent levels and tenant income eligibility. To avoid recapture of the housing credits, these guidelines must be maintained for a minimum period of 15 years.

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