The low-income housing tax credit (LIHTC) market has settled down since the early months of the COVID-19 pandemic and should remain steady heading into the new year, according to several syndicators.

Like most years, 2020 started out strong as developers and syndicators worked to close transactions that slipped from the prior year, said Jay Segel, executive vice president at R4 Capital, during the Tax Credit Equity Outlook Power Panel at the virtual AHF Live conference.

The pandemic then struck, with many areas shutting down their businesses starting in March. That caused LIHTC investors to hit the pause button as they assessed what was happening in the industry and the nation. Since then, the market has been able to move forward and work itself out by early May, according to Segel.

Several syndicators and debt providers even reported having record years.

Overall on an aggregate basis, LIHTC prices have declined by “a couple of cents,” said Scott Hoekman, president and CEO of Enterprise Housing Credit Investments.

Pricing has varied, but the overall decline has not been dramatic, he added.

Others agreed that prices have fallen by about two or three cents this year. That's where they've settled for a bit, according to Iris Bashein, senior vice president, debt and equity executive, at the bank.

Going into the 2021, Hoekman and others will be watching to see if the pandemic drags on and what will happen with banks’ commercial real estate portfolios and their demand for LIHTCs. However, at this point, Enterprise is looking at a strong year with a large pipeline of secured business, Hoekman said.

Roy Faerber, senior vice president, equity, at Boston Financial Investment Management, said there’s been a “little bit of a pendulum swing.” In the past, a developer may have seen five investors interested in a deal. Now, it seems there are fewer investors for every deal, which allows investors to pick and choose for more conservatively underwritten projects as well as for liquidity and developer experience, he said.

It would be helpful to developers to receive feedback on what investors are seeing on project reserves and other terms so they can adjust their deals rather than not be picked, added Caleb Roope, president and CEO of The Pacific Cos., a leading affordable housing developer.

Other takeaways from the power panel:

· The LIHTC market is a roughly $18 billion market with about 45 to 50 active investors, estimated Faerber.

· Bank of America, a major LIHTC investor, is taking a close look at economic projections. “Where are things headed? We really have to look at everything in the totality and start looking at trends going forward,” said Bashein.

· Catherine Cawthon will become president and CEO of Ohio Capital Corporation for Housing on Jan. 1, 2021. She makes the move after a 20-year career at Fifth Third Bank, where she’s been president of its community development corporation.

· Boston Financial Investment Management’s acquisition of Boston Capital’s LIHTC business is scheduled to close next month.