How TIF Works · TIF Acquisition

Acquiring a TIF incentive for a real estate development

The municipal process for creating tax increment financing areas, both for TIF districts and single-site TIFs, is unique to each local government. Once the district is created, the TIF bonds can be issued to the project developer — but turning that TIF award into the best financial tool has been historically difficult.

A higher standard for TIF funding
Team – Partnership

A Higher Standard

A higher standard for TIF funding

Shortcuts in TIF monetization show up in project returns. An outright sale maximizes proceeds and holds contributed equity down. Hageman Capital values the bond over its full term and funds at construction loan closing.

  • Outright purchase of TIF and incentive bonds at competitive valuations
  • Flexible structuring across the capital stack, from senior to gap funding
  • Decisive diligence — most valuations returned within days, funded in weeks
  • Discretion and continuity from first call through closing
Unlock project capital
Tax increment financing (TIF) creation for a development project
Project Shot · Development

TIF Creation

Tax increment financing (TIF) creation for a development project

Typically, establishing a single-site project TIF requires direct coordination with the municipality. The process to value the TIF based on the development's estimated taxes will depend on local regulations and the general negotiation between the municipality and the developer.

  • Outright purchase of TIF and incentive bonds at competitive valuations
  • Flexible structuring across the capital stack, from senior to gap funding
  • Decisive diligence — most valuations returned within days, funded in weeks
  • Discretion and continuity from first call through closing
TIF Creation
Municipal issuance of tax increment financing (TIF) bonds
Project Shot · Civic

Municipal Issuance

Municipal issuance of tax increment financing (TIF) bonds

Single-site or developer backed TIF bonds are provided to the developer of a real estate project as an incentive, allowing them to capture a portion of incremental taxes generated by their project over time. TIF requires major commitments from the municipality to support further growth in their communities — this exchange is usually predicated on how impactful a proposed development would be to the community.

  • Outright purchase of TIF and incentive bonds at competitive valuations
  • Flexible structuring across the capital stack, from senior to gap funding
  • Decisive diligence — most valuations returned within days, funded in weeks
  • Discretion and continuity from first call through closing
Required plans and documentation for TIF approval
Project Shot · Planning

Documentation

Required plans and documentation for TIF approval

Securing a TIF bond typically requires conceptual designs and a feasibility study. Both are central to the “but for” test, and both influence the resulting bond structure. A feasibility study generally includes:

  • Type of project and site plans
  • Project costs — both hard and soft
  • Real estate pro-forma of the proposed development
  • Financial projections
How project details and bond structure affect proceeds

Bond Credit

TIF bond credit: developer-backed vs municipally backed

Municipalities can support bonds with municipal credit, or have the bonds supported only by the TIF from the project. Historically, most TIF bonds issued were municipally backed — today, in many jurisdictions, developer backed bonds are becoming much more common.

Municipal backed bonds Valued by the tax increment plus the municipality's credit — if increments fall short, the municipality covers the difference. Developer backed bonds Value derived only from the project's property tax increment — shifting risk to developers and limiting taxpayer exposure.
TIF bond repayment types
Project Shot · Mixed-Use

Repayment

TIF bond repayment types

TIF terms differ depending on whether the bond is issued and secured by a TIF district or by a single-site project TIF. The most common repayment type is pay-as-you-go, under which the bonds are repaid from taxes actually collected over time. Selling the bond delivers that value as a single upfront payment, without additional contributed equity.

  • Outright purchase of TIF and incentive bonds at competitive valuations
  • Flexible structuring across the capital stack, from senior to gap funding
  • Decisive diligence — most valuations returned within days, funded in weeks
  • Discretion and continuity from first call through closing
Monetize your TIF

TIF Bond Funding and Capital

Real estate and finance, in one underwriting.

Maximizing proceeds requires both real estate and finance capability. A bank will fold the incentive into a construction loan, but advance rates limit what the developer receives. Hageman Capital provides indicative proceeds estimates at no cost.

Calculate funds from your TIF Speak with our team