Capital Stack Builder.

How the builder works

Pick a deal type, enter the basics (project cost, units, AMI mix), and the builder returns an indicative capital stack. The model uses simplifying assumptions appropriate to a feasibility-stage screen: LIHTC equity at $0.85/credit, FHA-style permanent debt sized to 1.15× DSCR on stabilized NOI, and a residual soft-debt gap. The output is not an underwriting model — use it to triage feasibility and frame the conversation with your equity provider and lender.

What the model assumes

• LIHTC equity (9%). Eligible basis = 90% of TDC (excluding land). Boost factor applied if QCT/DDA. Applicable percentage 9% of qualified basis. Credit period 10 years. Equity pricing $0.85/credit.
• LIHTC equity (4%). Same as above but 4% applicable percentage. Reflects post-Rev. Proc. 2025-32 fixed floor.
• Bond proceeds (4% deals). Sized to satisfy the post-OBBBA 25% financed-by test on aggregate basis. Bonds are tax-exempt private activity bonds subject to state PAB cap.
• Permanent debt. NOI = (rent × units × 12 × 0.93) − (35% opex). Debt service sized to 1.15× DSCR. Loan amount = annual debt service capacity ÷ payment factor for 5.75% / 35-yr amortization.
• Soft debt / gap. Residual = TDC − LIHTC equity − permanent debt − bond proceeds (if 4%). Shown as a single line; in practice this is HOME, HTF, state subsidies, deferred developer fee, etc.
• OZ standalone. Assumes 80% of TDC raised as QOF equity, 20% as permanent debt (no LIHTC equity, no bonds).

What this builder doesn't do

• No state HFA specifics. Bond cap rules, gap subsidy programs, and QAP-driven sizing constraints vary by state and are not modeled here. See the relevant state HFA page.
• No syndicator-specific equity pricing. Real pricing depends on syndicator, deal characteristics, and timing. $0.85/credit is a 2026-pipeline ballpark; confirm with your equity provider.
• No FHA / GSE rate quotes. The 5.75% interest rate is illustrative; actual rates depend on execution (FHA vs GSE, 221(d)(4) vs 223(f), TEB vs TEL, market conditions).
• No income averaging detail. The single "avg AMI" input is a stand-in; actual income-averaged projects have a designated unit-by-unit mix that affects basis differently.
• No basis adjustments. Federal subsidy basis reduction (IRC § 42(i)(2)(D)), acquisition basis on rehab deals, and similar adjustments are not modeled.

What to do with the output

Use the builder output as a feasibility-stage screen: does the deal have a financeable structure or a fatal gap? If the soft-debt gap is small (<10% of TDC), the deal is likely viable with normal state/local subsidy participation. If the gap is large (>25%), the deal needs either deeper subsidy, lower TDC, or higher rents (which may push it out of LIHTC-affordable range). For deals that look promising, the next step is a full underwriting model from your accountant or syndicator partner — not this tool.

Sources

• IRC § 42 (LIHTC) — applicable percentages, eligible basis, qualified basis, basis boost
• IRC § 42(h)(4) — bond financed-by test (25% post-OBBBA for bonds issued after Dec 31, 2025)
• IRC § 42(i)(2)(D) — federal subsidy basis-reduction rule
• IRC § 1400Z-2 — Opportunity Zone gain deferral and 10-year exclusion
• P.L. 119-21, One Big Beautiful Bill Act, enacted July 4, 2025

Disclaimer

The Capital Stack Builder is a feasibility-stage screening tool with simplified inputs and assumptions. It is not an underwriting model and does not substitute for a full pro-forma from your accountant or syndicator. Equity pricing, debt rates, opex ratios, and many other inputs vary widely by market and deal. Always confirm modeled numbers with a qualified professional before relying on them for a transaction. This is educational content and is not legal, tax, or financial advice.