Phase 2: Financing the Development

Tour of the HART Credit

Step 3: Debt financing

With site control and the HART Credit allocation, the sponsor can then assemble its development financing, starting with a construction or rehab loan from a market lender. (Some sponsors will need to contribute their own capital , in the form of advances or loans, to be recouped at completion and permanent financing.)

Step 4: Raising the equity

The sponsor then raises equity capital by selling the pledge of future HART credits to socially-motivated investors seeking tax relief.

Step 5: Construction or rehab

Having now secured the entire financing necessary, the sponsor develops the property through new construction, rehabilitation, or a combination of both.