Financing is one of the most crucial aspects of any multifamily development project. The type of financing you choose will shape not only the feasibility of the project but also its profitability, sustainability, and long-term success. Fortunately, developers have a variety of financing options available to fund their projects, each with its own advantages and drawbacks depending on the size, scope, and location of the development.
In this post, we will explore several multifamily financing options, including traditional bank loans, government-backed loans, private equity, specialized tools like Tax Increment Financing (TIF), and bridge loans. Understanding these methods allows developers to select the most suitable option for their unique needs and financial goals.
Multifamily Financing Options
1. Traditional Bank Loans
Traditional bank loans remain one of the most commonly used methods for financing multifamily developments. These loans are offered by commercial banks and other financial institutions, with terms typically ranging from 10 to 30 years. The process involves securing a loan based on the projected income the property will generate, the developer’s creditworthiness, and the value of the property.
Banks require a solid business plan, a track record of successful developments, and proof that the property will generate sufficient cash flow to cover the loan payments. Typically, developers need to provide up-front equity of at least 20-30%, and interest rates are based on market conditions and the developer’s credit profile. While these loans provide long-term stability, they often involve stringent qualification criteria and can be difficult to secure for new developers without an established track record.
2. Federal Housing Administration (FHA) Loans
For developers focused on affordable housing, FHA loans are a highly attractive financing option. The Federal Housing Administration, part of the U.S. Department of Housing and Urban Development (HUD), offers loans designed to encourage the development of affordable multifamily housing. FHA loans come with favorable terms, including lower down payments (as low as 3.5%) and longer repayment periods compared to conventional loans.
The 221(d)(4) program from FHA is a popular choice for developers constructing new multifamily properties, as it allows developers to access both construction and permanent financing. While FHA loans provide lower upfront costs, they come with specific restrictions, particularly around rent pricing and eligibility criteria, which developers must meet.
3. Fannie Mae and Freddie Mac Loans
Both Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that offer multifamily loans to developers. These loans are popular due to their lower interest rates and longer terms compared to traditional bank loans. Fannie Mae and Freddie Mac loans are commonly used for the acquisition, refinancing, and rehabilitation of multifamily properties.
These loans offer flexibility with both fixed and variable-rate options and provide long-term stability. The downside is that these loans come with strict eligibility criteria, including high credit-worthy sponsors and a demonstrated history of successful property management. These loans are best suited for developers seeking to finance well-established properties or those looking for long-term, stable financing.
4. Tax Increment Financing (TIF)
Tax Increment Financing (TIF) is a unique financing tool that allows local governments to fund infrastructure and public improvements by capturing the increased property taxes generated by new development. The local government issues bonds to fund project costs such as roads, utilities, and public amenities, and the increased tax revenue generated from the development is used to pay back these bonds.
TIF is particularly useful in areas that require significant infrastructure investment before development can take place. For developers, it can be an appealing option because it enables projects that might not be financially viable otherwise. However, TIF is meant to be used for projects that would not occur without the new infrastructure/improvements, as required by the “but for” test in many states like Indiana. This ensures that TIF funds are used for projects that genuinely need the infrastructure investment to move forward.
5. Bridge Loans and CMBS Loans
For developers in need of short-term financing, bridge loans offer a solution. Bridge loans are temporary loans used to “bridge” the gap between the time a project begins and when long-term financing is secured. They are often used for acquisitions or renovations of multifamily properties, offering quick access to capital for developers. The main downside is that bridge loans typically come with higher interest rates and shorter repayment periods.
Commercial Mortgage-Backed Securities (CMBS) loans are another option for larger multifamily properties. These loans are backed by the property itself and are sold to investors as securities. CMBS loans offer access to large amounts of capital, but they come with stricter terms and can be more difficult to qualify for than traditional loans.
6. Private Equity and Joint Ventures
Private equity allows developers to raise capital from private investors in exchange for a share of the project’s ownership. This can be particularly useful for developers who lack sufficient capital to finance a large-scale project but want to retain control. Private equity investors are generally looking for a return on investment once the property is completed and generating income.
Similarly, joint ventures (JVs) allow developers to pool resources with other developers or investors. JVs enable both parties to share the risks and rewards of a project. This is often used for larger projects where the required capital exceeds what a single developer can provide.
Final Thoughts on Multifamily Financing
The array of financing options available for multifamily developments allows developers to tailor their approach depending on the size, location, and goals of their projects. Traditional bank loans, government-backed FHA loans, and Fannie Mae/Freddie Mac financing remain staples for many developers, while more specialized tools like TIF, bridge loans, and private equity provide flexibility for different project needs.
By carefully considering the advantages and limitations of each financing option, developers can make well-informed decisions that will position their multifamily projects for success in a competitive market. Whether leveraging tax incentives like TIF or accessing private capital, understanding your financing options is key to turning your development vision into a reality. Reach out to Hageman Capital today to find out how we can help you achieve your goals.
Tax Increment Financing (TIF) is a powerful tool for developers seeking to fund infrastructure and other eligible project costs by leveraging future increases in property tax revenues. However, to maximize the benefits of TIF financing, developers must carefully structure their development and financing agreements to ensure that TIF bonds remain marketable in the future. Poorly structured agreements often lead to the need for renegotiation with municipalities, delaying transactions and creating uncertainty for investors.
To help developers navigate this process, we outline key strategies to structure front-end agreements (agreements where the Developer is negotiating with the municipality) such as project agreements, development agreements, financing agreements, and bond ordinances—that facilitate the resale of TIF bonds without requiring renegotiation with the municipal entity. These agreements differ from back-end agreements (negotiated with bond purchaser), such as bond documents (e.g., trust indentures) and taxpayer agreements, which come into play once the incentive structure is secured.
Establish Clear and Comprehensive Development & Project Agreements
The foundation of a successful TIF structure is a well-defined front-end agreement between the developer and the municipality. This agreement should explicitly outline:
The scope of the project, both public improvements and private development
The timing and sequencing of construction milestones.
The financial commitments of both the developer and the municipality.
The specific sources and uses (especially what the dollars can be used for) of TIF revenue.
Any obligations regarding ongoing maintenance or public services.
Clarity in these terms minimizes ambiguities that could lead to disputes or the need for future renegotiations. A well-drafted development agreement also assures bond purchasers that the project’s TIF revenues are legally committed to repayment, strengthening investor confidence.
Secure Additional Collateral through Taxpayer or Minimum Service Agreements
Beyond projected tax increment revenues, bondholders prefer additional security to reduce investment risk. One of the most effective ways to provide this assurance is through a Taxpayer Agreement (in states like Indiana) or a Minimum Service Agreement (in states like Ohio). These agreements establish a legal obligation on the part of the developer (or another responsible party) to cover any revenue shortfalls in the TIF district.
A Taxpayer or Minimum Service Agreement may require the developer to make up any shortfall between actual TIF revenues and the amount needed to service bond payments. Additionally, these agreements collateralize the real estate by making any shortfall payments a tax lien, further securing the bonds for investors. Importantly, these agreements are often contemplated in front-end agreements, such as project agreements and development agreements, ensuring they are aligned with municipal approvals and financing expectations.
Ensure Assignability and Transferability of Agreements
Developers often focus on structuring TIF agreements for initial financing without considering how easily those agreements can be transferred or assigned to another party. If the agreement does not explicitly permit assignment, any future bondholder looking to purchase the bonds from the original developer may be required to seek municipal consent—potentially derailing a deal.
To avoid this hurdle, developers should ensure that all key agreements, including Taxpayer Agreements and Minimum Service Agreements, explicitly allow for assignment to future bondholders without requiring additional municipal approval. This provision facilitates smoother transactions and avoids delays that could otherwise require renegotiation.
Define Clear Repayment and Allocation Mechanisms
A well-structured financing agreement should clearly define how TIF revenues will be allocated and used for debt repayment. This includes:
Establishing clear waterfall provisions that dictate the priority of payments.
Addressing any subordination of debt to other financing sources.
Ensuring that revenues are allocated on a predictable and transparent schedule.
Avoiding ambiguous language that could lead to disputes over how funds are distributed.
Ensuring that if a developer makes a Taxpayer Agreement payment (supplemental payment), they have the ability to be repaid from future excess TIF revenue. This provision can be incorporated into the trust indenture as well.
By explicitly detailing how funds flow from the municipality to bondholders, developers can prevent uncertainties that may require contract amendments down the road.
Avoid Unnecessary Municipal Approvals in Key Terms
One common issue in TIF agreements is leaving too much required approval to the municipality regarding revenue disbursements or bond transfers. While municipalities often want to retain oversight, excessive discretionary capabilities can create uncertainty for bondholders and complicate the resale of TIF bonds.
To prevent these issues:
Specify clear, objective criteria for approving bond assignments rather than requiring broad municipal approval powers.
Avoid language that allows the municipality to delay or deny revenue distributions without cause.
Ensure that all financial obligations are legally binding rather than subject to periodic review or renewal by the municipality.
Structure Bond Ordinance to Allow for Ample Par Amount and Interest Rate Flexibility
The bond ordinance, a key front-end agreement, dictates bond sizing, terms, and issuance flexibility. Developers should ensure that their bond ordinance:
Allows for sufficient par amount for the TIF being generated by the project, preventing the need for future amendments or additional issuances. Remember, more increment being generated can result in needing a higher par amount.
Provides flexibility in setting the interest rate (i.e. make the allowable coupon high), so the bonds would not have to have a steep discount when being marketed. While a higher discount value won’t impact proceeds, if the par amount of the bonds is also a limiting factor, this could result in fewer bonds being issued than what the TIF can actually support.
By structuring the bond ordinance appropriately, developers can ensure that their TIF bonds remain attractive and marketable without requiring municipal renegotiation.
Engage Experienced Legal Advisors
Given the complexities involved in structuring TIF financing, it is critical to work with legal professionals who specialize in public finance and real estate development. Experienced legal advisors can:
Draft agreements that align with industry best practices.
Ensure compliance with municipal and state regulations.
Anticipate potential investor concerns and address them proactively.
Assist in negotiating terms that maximize the flexibility and marketability of TIF bonds.
By engaging the right legal professionals early in the process, developers can avoid costly mistakes and ensure their front-end agreements are structured for long-term success.
Tie Agreements Back to Long-Term Marketability
To facilitate the resale of TIF bonds, developers should proactively consider investor concerns when structuring project agreements, development agreements, and bond ordinances. Key factors that contribute to future marketability include:
Ensuring all agreements are assignable to future bondholders.
Developing well-defined repayment mechanisms that specify the order of payments, potential reserves, and repayment contingencies ensures that bondholders receive consistent and predictable returns. These mechanisms should also address scenarios where tax increment revenues fall short, specifying how any deficiencies will be covered, whether through taxpayer agreements, reserve accounts, or supplemental payments from developers.
Minimizing excessive municipal approvals that can lead to delays or uncertainties in bond repayment and transfers by establishing clear, objective criteria for approvals could create uncertainty for investors.
Providing additional collateral through Taxpayer Agreements or Minimum Service Agreements to strengthen investor confidence.
By addressing these factors upfront in front-end agreements, developers can enhance liquidity, making it easier to sell TIF bonds in the future without requiring renegotiation with the municipality.
Conclusion
Structuring a TIF financing and development agreement with long-term marketability in mind is essential for developers who plan to sell their TIF bonds in the future. By implementing Taxpayer Agreements or Minimum Service Agreements, ensuring assignability, structuring bond ordinances with flexibility, and eliminating unnecessary municipal discretion, developers can create financing structures that remain attractive to bond investors without requiring renegotiation.
Feasibility studies are an essential component of the commercial real estate development process. These studies systematically evaluate a project’s potential for success, considering various factors such as market conditions, financial viability, site selection, and infrastructure requirements. One financial tool that often plays a significant role in this analysis is Tax Increment Financing (TIF). Understanding the relationship between feasibility studies and TIF can provide valuable insights for developers, investors, and local governments.
What is a Feasibility Study?
A feasibility study is a comprehensive assessment that helps stakeholders determine the practicality and potential success of a proposed real estate project. The study typically addresses several critical questions, including:
Market Analysis: Is there adequate demand for the proposed development? Analyzing market trends, target demographics, and competition is crucial in assessing this aspect.
Financial Analysis: Will the projected revenues cover the initial investment, operational costs, and financing expenses? This evaluation often involves creating financial models that project cash flow and return on investment.
Site Evaluation: Is the selected location appropriate for the type of development planned? Factors such as accessibility, visibility, and zoning regulations are analyzed to assess the site’s suitability.
Infrastructure Requirements: What infrastructure improvements are necessary to support the project? This includes evaluating existing utilities, transportation networks, and public amenities.
The insights gained from a feasibility study assist stakeholders in making informed decisions regarding project development.
The Role of Tax Increment Financing (TIF)
Tax Increment Financing is a funding mechanism designed to encourage economic development in designated areas. TIF allows local governments to capture future tax revenues generated from increased property values resulting from new developments. This captured revenue is then allocated to finance essential infrastructure improvements needed to support the project.
Exploring TIF’s Relevance
Through the Lens of a Developer
Infrastructure Funding: A significant component of feasibility studies is evaluating the infrastructure requirements for the proposed project. TIF can provide a means to fund these improvements, such as roads, utilities, and public spaces. Understanding these needs helps determine if TIF is a suitable financing option.
“But For” Test: A key requirement for establishing a TIF district is demonstrating that the proposed development would not occur without the TIF financing. This “but for” test is an essential consideration in feasibility studies, as it assesses the likelihood of the project proceeding without TIF support. If a project can be justified as needing TIF funding to move forward, it strengthens the case for utilizing this financial tool.
Market Dynamics: Feasibility studies analyze market conditions and demand for the proposed type of development. TIF’s effectiveness in enhancing property values and attracting investment relies on these market dynamics. Conducting a thorough market analysis within the feasibility study helps gauge whether the TIF district can effectively stimulate growth and support the development.
Through the Lens of a Municipality
Cost-Benefit Analysis: Both TIF assessments and feasibility studies typically include a cost-benefit analysis. This analysis evaluates the projected economic benefits—such as increased tax revenues and enhanced property values—against the costs associated with financing infrastructure and potential risks. This comparative evaluation assists stakeholders in understanding the financial implications of using TIF and its impact on overall project feasibility.
Long-Term Considerations: Feasibility studies often take into account the long-term effects of TIF. Once the TIF bonds are repaid, the incremental property value is released for general taxation, potentially increasing revenues for local governments. This aspect is vital for assessing the overall fiscal impact of the project on the community and for determining whether the TIF mechanism aligns with long-term economic goals.
As the commercial real estate landscape continues to evolve, understanding the interplay between feasibility studies and financing mechanisms like TIF will remain important for developers, investors, and local governments. By carefully considering the implications of TIF in their feasibility studies and potentially partnering with Hageman Capital, stakeholders can make informed decisions that contribute to sustainable development and economic vitality within their communities.
The integration of TIF in feasibility studies not only enhances the analytical framework but also aligns financial resources with community development objectives, fostering a more comprehensive understanding of the potential impacts of proposed projects. Contact us today to learn more about our services and how we can support your real estate projects.
Hageman Capital was created in 2021 by Hageman Group to help real estate developers maximize their tax increment financing (TIF) incentives by buying and monetizing TIF Bonds.
We aim to “Create Shared Successes” for developers, municipalities providing the TIF incentives, and us, by investing in community development projects that generate value for years to come. With an understanding of both public financing incentives and real estate, Hageman Capital finds creative ways to structure and monetize TIF bonds that maximize value for everyone involved.
How Does Tax Increment Financing Work?
Tax increment financingis a public financing tool used by local governments to fund improvements and redevelopment projects within specific areas, or specific sites, known as TIF districts.
TIF districts aim to capture the incremental increase in property tax revenues that results from the new development or redevelopment of a designated area or site. These revenue increases can be used as an incentive to a developer and monetized to provide upfront financing.
How Does Hageman Capital Help Developers Monetize TIF Bonds?
Hageman Capital purchases developer-backed TIF bonds in a real estate development deal, providing capital for the project without contributing additional equity. In turn, by selling the TIF, developers can achieve a higher rate of return on their real estate projects.
Additionally, construction lenders are more inclined to loan on a deal where the TIF is sold, rather than being monetized through a construction loan. This allows more deals to close, especially in a higher interest rate environment.
Hageman Capital helps developers monetize TIF bonds at the beginning of each project. This is because we’ve found that municipalities are much more reluctant to support a developer’s project through their own credit. However, we’ve seen an uptick in developer-backed TIFs bonds, which require developers to support the debt service of the bonds, and ultimately find ways to monetize their TIF incentives with their own resources.
Hageman’s experience in real estate and TIF created an avenue to build Hageman Capital as a solution for developers who have had challenges in monetizing their TIF incentives.
Where Does Hageman Focus Its Investments?
Many of Hageman’s investments focus on assets built from the ground up. From our agricultural investments to our commercial real estate holdings, Hageman believes in “investing in tomorrow, from the ground up,” and has focused our investment strategies on agriculture, real estate, and entrepreneurship.
Our investments have spanned over multiple generations, with Gene Hageman buying his first 80 acres of farmland in 1952. The Hageman family then went on to create Remington Seeds in 1984, which reshaped the U.S. seed corn and seed soybean industry.
The success of Remington Seeds allowed for the creation of the Hageman Group, which allows us to create shared successes for our partners by investing in their projects. Our history of enriching the communities we invest in led the way to the creation of Hageman Capital in 2021, which helps solve problems for developers looking to invest in their own communities.
Partner with Us Today
Hageman Capital looks to create lasting relationships with groups that share our values. By investing in developers like Old Town Companies actively developing in their communities, Hageman can create shared successes with our partners.
Interested in partnering with Hageman Capital? Contact us today to learn more.
Tax increment financing (TIF) serves as a powerful tool for developers seeking to revitalize communities (TIF districts) and undertake ambitious economic development projects. However, the gradual disbursement of TIF incentives over an extended period can pose financial challenges. This is where TIF monetization comes into play, offering a strategic solution to convert future tax revenues into immediate capital.
What is TIF Monetization?
TIF monetization is a process to generate upfront value from a tax increment financing incentive received over time. Since TIF incentives are derived from incremental real estate taxes tied to a specific project, their disbursement can be paid out over 15 to 30 years, depending on the jurisdiction. TIF monetization methods enable the incentive holder to sell those cash flows to an investor in exchange for upfront capital.
If a developer receives TIF incentives, they have the option to securitize those cash flows through a TIF bond or a TIF note and subsequently sell them to an investor. The investor, in turn, pays the present value of those future incentive cash flows, and the bond/note grants them the right to capture those future payments.
Why Monetize Your TIF Incentive?
There are severaladvantages of TIF monetization. In short, monetizing TIF and selling TIF bonds at the start of construction allows a developer to contribute less equity into a project, borrow less debt from a lender, or a combination of both. In many cases, selling or monetizing a TIF bond can enhance the developer’s return on the project.
How Does TIF Monetization Differ From State to State?
TIF legislation varies between states, and depending on the jurisdiction, TIF monetization methods may differ. In Indiana, TIF monetization is typically executed through the sale of a developer-backed bond, where the developer is obligated to monetize the TIF incentives or retain the bonds and collect the cash flows over time. The advantage of utilizing a bond is that it is already packaged in a securable instrument, which isn’t always the case with a loan or a note.
Alternatively, in some other states, such as Illinois, TIF notes are more commonly used. The note (similar to a bond) allows the holder to capture incremental tax revenue generated from a project. In many cases, TIF notes and TIF bonds are used interchangeably. However, investors in a TIF note must ensure the instrument is transferable, necessitating additional due diligence and structuring expertise.
Ultimately, the key variable for any TIF monetization requires a securable instrument, either a TIF bond or a TIF note, which can be freely transferred to an investor.
The TIF Monetization Process
Most TIF monetization processes involve the developer engaging an investor for the purchase of their TIF bonds or TIF notes. Throughout that process, a developer will engage in the following.
Negotiate With the Investor
The developer negotiates with investors on acceptable terms and pricing levels. This is typically the time when an investor will bring up covenants specific to them and give a framework for pricing.
A Due Diligence Period
Investors will look to analyze the real estate project, the taxing authority, and tax history. Additionally, on new developments, investors are taking on development and construction risk.
Memorialize Bond/Note Documents
Attorneys work to memorialize transaction documents that may vary between states.
Close and Fund on a Specific Date
Typically, the bond/note funding date will be when the construction loan closes.
On a pre-construction completion TIF, the developer will typically work with the municipality or local governments in conjunction with the purchaser to issue the security directly to the purchaser.
In the dynamic world of real estate, where challenges and opportunities coexist, TIF monetization emerges as a strategic ally, offering a roadmap to transform visions into tangible, impactful realities. Hageman Capital can help empower your journey as you navigate the intricate landscape of TIF incentives, unlocking value and maximizing returns in the process.
Embarking on a real estate development journey often involves navigating a complex financial landscape, and tax increment financing (TIF) bonds emerge as a strategic tool within this realm. In this blog, we unravel the intricacies of a specific subset — Developer-Backed TIF Bonds — shedding light on their significance, mechanisms, and the pivotal role developers play in securing their success.
What is a Developer-Backed TIF Bond?
A tax increment financing (TIF) bond is a financial instrument used to fund certain portions of development projects within a designated area, often referred to as a TIF district. In a TIF district, the increase in property tax revenue generated by the development is earmarked to repay the bonds.
Developer-backed TIF bonds are a type of TIF financing mechanism where a real estate developer supports and guarantees the repayment of bonds issued by local governments for a specific development project. This means that the developer of the project takes an active role in supporting and securing the TIF bonds.
These types of TIF bonds typically involve the developer committing to contribute a portion of the project costs and taking on responsibilities to ensure the project’s success. By backing the TIF bonds, the developer aligns their interests with the successful execution of the project, adding a layer of assurance for investors and stakeholders.
What are the Requirements for a Developer to Receive TIF Incentives?
Requirements for a developer to receive TIF incentives can vary depending on the specific regulations and policies of the local government or municipality involved. However, there are some common elements and considerations that are often taken into account:
Does the developer’s project require the funds to be commercially viable? This means the current returns of the project are not high enough for investors, lenders, and the developer to start the development. This is more commonly known as the “but-for” test.
Has the municipality determined whether the project contributes to public well-being through increasing economic development in a specific area or increasing the existing tax base?
Is the type of project (whether apartments, office, retail, or industrial) additive to the municipality?
Essentially, for the city or other municipality to determine whether to grant developers TIF incentives, they may weigh both the “but-for” test, and whether the project contributes to the public well-being. Depending on the jurisdiction, some municipalities may even use a scorecard for each project to determine whether there will be incentives provided.
When is a TIF Bond Required?
A TIF bond or a TIF note is a financial instrument used to memorialize a developer’s TIF incentive. While TIF bonds and the TIF incentive are sometimes used interchangeably, they are not the same.
Typically, a bond is required when a developer needs to monetize the bonds (i.e. sell the bonds), which allows those proceeds to be used in their project. While some developers may choose to hold the bonds and collect the incentive cash flows over time, many developers opt to sell the bonds upfront. The bond is the easiest way to sell that interest.
TIF stands for Tax Increment Financing in the context of real estate. It is a public financing tool used by many state and local governments to fund improvements and redevelopment projects within specific areas, or specific sites, known as TIF districts. The fundamental idea behind TIF is to capture the incremental increase in property tax revenue that results from the property development or redevelopment of the designated area or site.
How Is TIF Used in Local Communities?
TIF is a crucial tool used in real estate development, it can stimulate economic growth, fund essential public infrastructure, and incentivize private investment in local communities. By designating a TIF district, cities can entice private development projects that may otherwise remain financially unviable. This strategic approach not only bolsters economic growth within the TIF district but also spurs private development.
What Are Some Benefits Of TIF for Developers?
Mechanically, developers use TIF to supplement their capital stack, by including the TIF incentive as equity dollars within their project. This ensures the real estate project returns to be higher, making the project more financially feasible for both equity investors, and banks, alike. Without TIF, many projects would not have been built.
TIF provides a range of benefits for both cities and developers. For cities, TIF is a valuable tool that can provide increased revenue, allowing them to capture increased property tax revenues generated by the development once the TIF term ends. This increased revenue can be allocated towards public services and to improve community infrastructure, including parks, schools, and public transportation. Additionally, TIF can drive economic growth by attracting private investment and creating jobs in these areas.
For developers, TIF offers a multitude of benefits. TIF serves as a valuable funding source, providing developers with access to funds that may not be readily available through conventional financing. This financial support can be instrumental in making projects more financially feasible while simultaneously mitigating some of the associated financial risks. As areas around their project undergo improvements, overall property values tend to rise, offering developers the prospect of increased property values for their projects.
The Role Of TIF In Private Development
In conclusion, Tax Increment Financing (TIF) is a valuable tool in real estate development, offering a win-win scenario for cities and developers alike. It allows municipalities to stimulate economic growth, improve infrastructure, and incentive private development. Developers are provided access to additional funding sources, reduced financial risk, and the ability to benefit from increased property values. TIF has been instrumental in transforming local communities and will likely continue to play a pivotal role in fostering sustainable development and revitalization.
Hageman Capital is a leading capital provider for TIF in the Midwest. By purchasing Developer-Backed TIF bonds, Hageman Capital provides upfront financing to developers.
– Xiao’s background, how he and Kent met.
– What are TIF Bonds and how they work.
– How TIF Bonds work with deals and what developers need to know.
– The positive tax benefits associated with TIF Bonds.
– Why investors should not rely on bonds to make their underwriting work.
– How investors can get started with TIF Bonds.
Throughout any transaction, Hageman Capital provides tremendous value through our structuring expertise, or what we call, “Value Add Propositions.” This is heavily emphasized throughout our Proven Process and continues to be the core of how we maximize value for the developer.
Contact our team to learn how we can work together on your next solution.
Xiao Ou Yuan, our Managing Director at Hageman Capital, was recently on the Wealth Matters Podcast with Alpesh Parmar and talked about the ins and outs of tax increment financing and how it works. If you want to learn more about why real estate investors and developers care about TIF, be sure to check it out
