The Developer's Resource

About Us

We are an underwriting surety agency specializing in P&P and other bonds for LIHTC (4% & 9% and state-based programs), Market Rate developers [HUD 221 (d) (4), etc.,] and GCs. We effortlessly guide our clients through the otherwise difficult approval maze with an innate understanding of how the surety companies think, and exactly what is needed for bond approval. Headquartered in Charleston, South Carolina, we are licensed in 50 states and represent clients nationwide. LIHTC Bonds Ltd Co is an affiliate of Carolina Indemnity Group.


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The pool of bonding companies that understand affordable housing tax credits is small. Mistakenly, bonding companies shy away from this class of business because Principal & Obligee are often related. (In our opinion, this is silly reasoning because it drastically reduces chances of claim).

Also, the flow of tax credits confuses many surety underwriters. Here is a brief summary of how tax credits in affordable housing works:

In 1986, Section 42 of the Internal Revenue Code was established to give incentives to private developers to build affordable housing through federal tax credits. These credits may be syndicated to others, typically large “C” Corps with high tax liability or banks seeking to satisfy CRA requirements. The proceeds from the syndication fund the project through various tranches, usually with 20% allocated at closing. A construction / bridge loan fills in the gaps. To obtain the credits, the syndicator will partner with the developer through special purpose vehicles (SPVs) and own 99.9% of the entity. After project conversion, the equity investment has the effect of easing the debt obligation on the property, which clears the way for setting the rents as affordable.

Traditionally, affordable housing deals fall in two categories: 4% & 9%. If 50% of a project’s eligible costs are financed using tax exempt bonds, the developer can claim a 4% LIHTC without having to get an allocation from his state’s allocating agency. The 9% deals are competitive in nature and are used when conventional debt is utilized with no other federal subsidies. We provide P&P bonds in both scenarios.

Performance / security guarantees take the form of either a letter of credit, usually 10 – 15%, or 100% P&P bond. This requirement comes from various sources including the syndicator, investors, or debt provider. In addition, any HUD insured mortgage deal requires a P&P bond.

Because of our deep knowledge & intimate understanding of multi-family development, and the role of surety within LIHTC & market rate developer models, we are able perform for our clients at an unrivaled level. From the developer entering his first tax credit deal, to the seasoned specialist with dozens of projects under his belt, Carolina Indemnity Group excels.

If your goal is to eliminate concern or worry with your current bond program, or you’ve just received your first LIHTC allocation, we can help. An impressive list of national references is available upon request.