LIHTC Operating Deficit Reserve Fund Guarantee Bond
LIHTC Operating Deficit Reserve Fund Guarantee Bond
All LIHTC partnership agreements require establishing an operating cash reserve account to fund potential operating deficits as per the terms of the operating deficit guarantee provided by the project sponsor. The partnership agreement will detail when these operating reserve funds may be utilized to cover operating deficits before the sponsor must fund the difference. On many projects this cash reserve often just sits in the reserve account and is never used and is eventually treated as a cash flow disbursement.
CMR has developed an operating reserve bond that can be utilized to guarantee funding of the operating reserve versus holding cash in an account. This product is only for Operating Deficit Reserves.
This bond is backed by an insurer rated A++ XV by AM Best (highest possible rating) and underwrites the developer/general partners experience in operating Section 42 LIHC projects and financial ability to fund the Operating Deficit Reserve Fund.
All LIHTC partnership agreements require establishing an operating cash reserve account to fund potential operating deficits as per the terms of the operating deficit guarantee provided by the project sponsor. The partnership agreement will detail when these operating reserve funds may be utilized to cover operating deficits before the sponsor must fund the difference. On…