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SPONSOR Q&A
How to Navigate
Government Subsidies
ei s
Sahaystack. But determined developers can take heart in knowing that there are still accessible avenues of unding, particularly in the form of government subsidies.
are not aware of the federal and state subsidies available for commercial real estate. While not every project is a
candidate for a government grant, quite a few are, says Cohn.
To get a better sense of what programs are out there and what developments are eligible, Distressed Asset Investor
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“The days of easy money have
passed. We are seeing a lot of
developers who are looking
at these subsidies in a fresh
way because they can’t get the
amount of debt they need.”
s
What programs are available
for commercial real estate
developers?
Joel Cohn:
Tax Credit is one program that is
commonly used to help make real
estate development more feasible.
2 Column
It’s a 39% federal income tax credit
that reduces the cost of capital for a
project over a seven-year compliance
income tax credit on all the
rehabilitation costs for a historic
building. So it’s possible that the
developer could have as much as
18% to 20% of the rehabilitation
costs subsidized by the federal
have to have the kind of history such
as George Washington slept there or
some spectacular physical features.
including a lot of post- war buildings,
which are important because of its
role in the economic development of
the community. Any building that is
over 50 years old could potentially
qualify for a historic tax credit. And it
could be used on any product type.
Has there been a retreat in
funding these programs
as a result of the downturn?
Cohn: No, there are actually some
Cohn
rate on a loan or to subsidize the
cost of equity capital. It’s generally
not available for multifamily rental
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