Beyond Year 15 Compliance: A Winning Affordable Housing Strategy

Expert advice on the steps to take with maturing LIHTC properties.

4 MIN READ
Imani Village Phase II in Wilmington, DE includes 67 new townhomes across five buildings, part of an eight-phase redevelopment to replace aging public housing with 713 high-quality, mixed-income homes. Cinnaire supported Imani Village through an investment of Low-Income Housing Tax Credits.

Imani Village Phase II in Wilmington, DE includes 67 new townhomes across five buildings, part of an eight-phase redevelopment to replace aging public housing with 713 high-quality, mixed-income homes. Cinnaire supported Imani Village through an investment of Low-Income Housing Tax Credits.

It’s estimated over 520,000 low-income housing tax credit (LIHTC) units will reach the end of their 15-year tax credit period between now and 2038.

That countdown begs many questions, from exit strategies and bringing on new partners to property reinvestment decisions.

Mike Witt, Senior Vice President, Asset Management for Cinnaire.

Mike Witt, Senior Vice President, Asset Management for Cinnaire.

Mike Witt has some ideas along those lines. The veteran affordable housing leader is senior vice president of asset management for Cinnaire, a mid-sized, mission-focused community development financial institution and LIHTC syndicator that has invested $6.3 billion over the last three decades in over 1,100 housing developments. Prior to Cinnaire, Witt held senior leadership roles at the Michigan State Housing Development Authority, where he helped shape statewide affordable housing policy and investment strategies.

With decades of experience guiding complex housing initiatives, Witt recently shared his insights on navigating the challenges and opportunities that arise at Year 15 and beyond in the lifecycle of affordable housing projects:

Why is it important to think about beyond Year 15?

It’s important to take a long-term view when it comes to affordable housing, especially as properties approach and move beyond Year 15. Many investors—and we at Cinnaire as syndicators—are very intentional about how properties perform after the initial compliance period ends. Our approach has always been long-term. We typically remain involved for the full 15 years and then work to transition our interest back to the general partner to ensure the property continues to serve residents during the extended-use period.

We see more and more Year 15 properties come back for reinvestment with a new allocation of tax credits. For example, there’s a Section 8 property we invested in back around 2008 that received tax credits. After a recent sale to a new general partner, the new owner approached us to help facilitate another LIHTC allocation for a substantial rehabilitation. We supported that effort, and today the residents are living in fully renovated homes while the ownership structure is well-positioned for another 15 years of successful operation.

This kind of reinvestment is a win-win—it preserves affordable housing, improves quality of life for tenants, and ensures long-term viability for partners.

How should long-term investors think about asset management?

Long-term investors should view asset management as a core component of success—not just an operational function. Back in 2008, when I was working at the state of Michigan during the height of the housing crisis, many developers were so focused on chasing the next deal that they were neglecting their existing portfolios. That oversight had real consequences.

We’re strong advocates for proactive asset management. Our experience shows good property stewardship ensures a more predictable NOI [net operating income] and a more certain way to achieve long-term program objectives.

Asset management isn’t a sexy topic. But more and more development companies now recognize ‘If I’m not watching what’s going on in my portfolio, I could undermine everything else I’m trying to do.’

Many are hiring in-house asset managers—people dedicated to monitoring property performance, cash flow, and long-term financial health. It’s not surprising we’re seeing far more industry conversation around asset management today than, say, 10 or 15 years ago.

Our experience shows that strong stewardship leads to more stable NOI and a more reliable path to achieving long-term program goals. It’s not the flashiest part of the business, but it’s absolutely essential.

What role does capital reinvestment play?

A very big one. For example, we’ve built a dedicated capital team that builds out new funds with properties that require development or significant rehab. We recapitalize them along with an allocation of tax credits. We’re now seeing LIHTC properties at year 15, 16, or 17 return for fresh capital and credits. There’s a great upside to that. When done right, this presents a major opportunity to refresh the property, improve resident experience, and secure another 15 years of affordability. But that opportunity hinges on solid stewardship through the initial compliance period. A well-maintained property is far better positioned to successfully recapitalize and attract new investment.

Where do you see affordable housing in the next few years?

Affordable housing remains one of the strongest and most resilient asset classes out there. Just look at the foreclosure rates—they’re consistently near zero year after year. I fully expect that trend to continue, which gives both investors and policymakers confidence in the sector’s stability.

Looking ahead, the passage of the bipartisan Affordable Housing Credit Improvement Act should be a major catalyst. It will help get more deals across the finish line—not just for new development but, just as importantly, for preservation. There’s no long-term benefit in adding 100 new units if we’re simultaneously losing 200 existing ones due to lack of reinvestment.

That’s why what happens at Year 15 is so critical. It’s not just an endpoint—it’s a renewal opportunity. I always tell our team: Everyone loves a ribbon cutting for a new project, but let’s start celebrating preservation deals the same way. A successful recapitalization and reinvestment at Year 15 is just as worthy of recognition. It’s the foundation for continued affordability and community stability.

Learn more about how to make the most of your Year 15 decision.