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Pro Tool · 15-year LP cash flow model

LIHTC LP IRR Calculator.

15-year LP economics — equity in, credits + tax savings + cash flow + Year-15 exit. Compute IRR, MIRR, equity multiple, and after-tax yield.

Interactive tool · LP-side waterfall

LP Cash Flow & Return Model

Enter deal economics. The model builds a 15-year LP cash flow stream and computes return metrics. Credits flow Years 1–10; cash distributions and exit happen Year 15.

Total LP capital — paid Year 0
Sum of all annual credits Years 1–10
Federal — 21% post-TCJA / OBBBA
Annual pref or cash flow distribution
Depreciation + interest losses passed through to LP (× tax rate)
Net LP proceeds from QC, ROFR, or sale
Reinvestment rate & financing rate (both set to COC — standard simplification)
Recapture + phantom income at exit
Year-by-year LP cash flow

Model assumptions: equity paid Year 0; credits + cash + tax savings flow Years 1–10; cash + tax savings continue Years 11–15; exit Year 15. Simplifying assumptions: uniform credit delivery, uniform cash distributions, single exit at Year 15. Tax-loss benefit is held flat through Year 15; real deals taper as debt amortizes. Real deals have more complex timing and waterfall structures.

How LP economics work

A LIHTC limited partner contributes equity in exchange for:

  • Tax credits (Years 1–10): dollar-for-dollar reduction in federal tax liability
  • Tax losses (passed through): depreciation + interest expense reduces taxable income at the LP's tax rate
  • Cash distributions: limited (cash-poor deals), typically nominal annual pref
  • Year-15 exit: small residual (QC price > debt, or ROFR-priced exit)

The LP IRR is typically 3–7% all-in — driven mostly by the credits, modestly by tax losses, and barely by cash or exit. Yields below 5% are common in CRA-driven deals (banks accept lower returns for CRA credit).