The OBBA’s permanent expansion of 9% LIHTC allocations and reduction of the PAB bond test from 50% to 25% has changed the math on 4% LIHTC deals materially and is generating the largest pipeline of 4% credit preservation deals we’ve seen.  As you know, under the new test, the PAB volume cap is now the binding constraint on production — and the optimal capital stack makes use of Affordable Housing Future Flow Contributive ABS (AHFCABS) proceeds as developer equity to fill the gap at the lowest possible cost, without encumbering assets.  The collateral quality picture for well-structured AHFCABS transactions has rarely been stronger.

 In February, our Executive Chairman published an analysis through Cornell Law School documenting that AHFCABS enables nearly 28% more affordable housing units over a 30-year horizon and increases the fiscal multiplier on LIHTC expenditures by over 17%.  For developers, the implication is direct: it is the most capital-efficient, non-dilutive way to fund both pipeline growth and QAP competitiveness.  Here’s a link to the piece.  For Q4 2026 issuances we’re targeting mid to high-6s/low-7s all-in coupon at Moody’s A2 — roughly a 265-275bp spread over the 10-year Treasury.  For portfolios with significant HAP concentration currently financed with taxable or BB-rated paper, the spread differential is material.

 If you’re evaluating balance sheet optimization, a portfolio recapitalization, or permanent financing for a stabilized asset pool, we’d welcome a conversation. Westwood has executed over 75% of the total AHFCABS volume placed, since we developed the structure in 2019. As a reminder, the structure requires no encumbrance of properties and no pledge of GP interests; your existing HUD and LP agreements are fully preserved.