Qualified Commercial Financing Qualified commercial financing is the exception to the at-risk rules. To qualify, financing must generally be nonrecourse, the lender must generally be actively engaged in the business of lending, the lender must not have previously owned the property, and the lender must not earn a fee in connection with the acquisition of the property. A qualified contract is a bona fide contract to acquire a LIHC project for the sum of the existing debt, adjusted investor equity and other capital contributions, less project cash distributions. Its exempt purpose is to foster low-income housing, among other purposes. Rebate A rebate is payment of the excess arbitrage proceeds to the federal government to retain the tax-exempt status of the bonds.
Special rules allow a borrower to avoid a rebate of arbitrage proceeds.
Regulation D Regulation D is a securities law regulation that explains the rules for three private offering exemptions from the general rules that requires securities registration. A regulatory agreement is an agreement entered into between the borrower, bond issuer and trustee specifying the income rent and income restrictions a project owner must comply with for the bonds to retain their tax exempt status. Rehabilitation Expenditures Rehabilitation expenditures are amounts incurred in improving or making additions to property in connection with the rehabilitation of an existing building. A scattered site project is a qualified low-income housing project located on multiple sites. The secondary market is the subsequent sale of bonds from bondholder, after the original sale of the bonds by the bond issuer.