Commercial Lending Solutions arranges acquisition, construction, and permanent debt for Qualified Opportunity Funds, QOZBs, and LIHTC developments financed with 9 percent competitive credits or 4 percent credits paired with tax exempt bonds. We structure the senior debt around the reinvestment window, the substantial improvement test, and the tax credit equity pay-in schedule, so the financing is never the reason a deal misses a deadline. We work directly with OZ fund sponsors, syndicators, and affordable housing developers nationwide.
Opportunity Zone and LIHTC financing runs on deadlines the tax code sets, not deadlines a lender sets. The 180 day reinvestment window, the substantial improvement test, a placed in service deadline tied to a credit allocation, and a tax credit investor's equity pay-in schedule all have to line up with the debt. Every situation below is one we have financed. If your sponsor's structure does not fit neatly into a single category, call us, layered OZ and LIHTC capital stacks are where we do our best work.
A Qualified Opportunity Fund has deployed capital into a QOZB for ground-up construction and needs the loan closed and drawing inside the 31-month working capital safe harbor so the fund's asset test is not jeopardized. We size construction debt around the QOF's equity contribution and coordinate closing directly with the fund's tax counsel, so the loan itself is never the reason the safe harbor is missed.
An existing building acquired inside a QOZB must have its adjusted basis doubled through capital improvements within 30 months of acquisition, or the property loses opportunity zone treatment. We arrange acquisition and rehabilitation financing sized to fund both the purchase and the required improvement budget, with draws released on the timeline the 30-month clock actually demands.
A developer has received a 9 percent competitive credit allocation from the state housing finance agency and needs a construction-to-permanent loan structured around the tax credit investor's capital contribution schedule, typically funded at closing, at construction completion, at stabilization, and upon 8609 issuance. We size the construction loan against that equity bridge so the developer is never carrying more debt than each draw can support.
A 4 percent credit transaction paired with tax exempt bonds requires the sponsor to secure both a bond volume cap allocation and a construction lender willing to work inside the bond structure, often on a timeline set by the state's own bond allocation calendar. We run the construction lender selection in parallel with the bond application rather than waiting for the allocation letter, so financing is not the step that costs the sponsor the cap.
A sponsor managing several QOZBs at once needs working capital or bridge financing at the fund level to close the timing gap between investor capital calls and deployment deadlines across multiple projects. We structure fund-level facilities that give the sponsor deployment flexibility without forcing every QOZB to independently qualify for its own bridge loan.
Restricted rents on an affordable housing development often produce a debt service coverage ratio a conventional lender will not size to, even though the project cash flows reliably. We layer senior debt with CDFI participation, housing finance agency soft debt, or deferred developer fee to close the gap, and we work with lenders who treat restricted rent stability as a credit strength rather than defaulting to a conventional coverage minimum.
An investor nearing the 10-year holding period wants to refinance or recapitalize a stabilized QOZB asset without triggering a disposition that would forfeit the eventual step-up to fair market value on the OZ investment. We structure the transaction as a refinance and coordinate with the fund's tax counsel to confirm it preserves the investor's holding period and the anticipated step-up.
A project stacks subordinate CDFI debt, New Markets Tax Credit allocation, or another impact-first capital source beneath a senior construction loan, and needs a senior lender comfortable underwriting around that subordinate layer, the intercreditor terms, and the compliance obligations that come with public or mission-driven capital. We place senior debt with lenders experienced in these layered structures who will not walk away from a deal simply because the capital stack is more complex than a conventional construction loan.
Most commercial mortgage brokers treat these deals like a conventional construction loan with extra paperwork. They are not. The debt has to be structured around a tax deadline, a credit equity pay-in schedule, or a holding period clock that a generalist lender rarely understands on the first call. We underwrite the way these programs actually work, which is why our submissions close on schedule.
We read a capital stack that includes QOF equity, tax credit investor equity, deferred developer fee, soft debt, and senior debt the way these deals actually get built. We know where the senior debt fits, what it can and cannot prime, and what a tax credit investor's counsel will require in an intercreditor agreement before their capital contribution funds.
Banks pursuing Community Reinvestment Act credit and CDFIs pursuing mission-aligned deployment are among the most active capital sources in opportunity zone and affordable housing financing, and neither shows up on a generic lender list. We maintain direct relationships with both, and we know which ones are actively deploying capital in a given market and which have already exhausted their allocation for the year.
Construction loans on OZ and LIHTC deals need draw schedules, retainage, and interest reserve sizing that match a substantial improvement clock or a tax credit milestone schedule, not a generic percentage-complete draw. We structure the construction facility so draws release on the timeline the tax program actually requires.
Where the exit is an agency permanent loan, HUD, or a life insurance company takeout, we place the construction loan and the forward permanent commitment at the same time rather than sequentially, so there is no recasting risk and no gap between construction completion and permanent funding.
The 180-day reinvestment window, the 31-month working capital safe harbor, the 30-month substantial improvement test, and a housing finance agency's placed in service deadline are not flexible. We build the financing timeline around the tax deadline, not the other way around, and we tell a sponsor early if a proposed closing date will not work.
You are speaking with the broker who structures the deal, not a loan officer reading from a program matrix. We do not publish sponsor names, fund names, or project addresses in marketing material, and we do not shop a transaction broadly across the market before you have approved the lender list.
We have designed the referral process to be as straightforward as possible for you and for the sponsor you represent. You make the introduction. We engage the sponsor directly, structure the financing around the deadline that actually matters, and keep you informed at every stage until closing.
Send an email to loans@clscre.com or call 310.708.0690 and introduce the situation in plain terms. We do not need a full package to start. Tell us the fund or entity structure, the OZ or LIHTC program involved, the capital need, and the key deadline you are working against, and we will tell you quickly whether we can help and what the realistic financing options look like.
We work directly with the fund sponsor, syndicator, or developer to gather the entity documents, the credit allocation or QOF election paperwork, and the property due diligence a lender will need. We structure the submission for lenders who are actually active in opportunity zone or LIHTC financing, whether that is a CDFI, a CRA-motivated bank, or a life insurance company correspondent comfortable with the compliance layer. You receive regular status updates throughout. We do not surface only at closing.
Your client's project gets debt structured around the actual tax deadline it is racing, not a generic closing timeline. You get a referral partner for every future opportunity zone or LIHTC transaction your clients bring you. We are compensated by the borrower at closing. There is no cost to you or your client for the referral relationship, and we do not share fees with non-licensed parties.
It matters. Most lenders prefer to place debt at the QOZB level, the operating entity that actually owns and improves the real estate, rather than at the QOF level, which is typically a holding vehicle whose only asset is its equity interest in the QOZB. A QOZB-level loan gives the lender a direct lien on real property and a borrower whose only business is the project, which is the collateral position most commercial real estate lenders are structured to underwrite.
The QOF's investor documents and the operating agreement between the QOF and the QOZB still matter to the lender, even when the debt sits at the QOZB. Lenders want to confirm the QOZB has authority to grant a lien and incur debt without requiring a vote of the QOF's investors that could slow down closing, and that the QOF's own leverage and distribution provisions do not conflict with what the senior lender requires.
We structure the request so the lender sees the two-tier relationship clearly from the outset. That avoids the common delay where underwriting stalls midway through the file because the lender only then realizes it is dealing with a fund structure rather than a single-purpose borrower.
Tax credit investor equity almost never funds in a single lump sum at closing. A typical pay-in schedule releases a portion at closing, a portion at construction completion, a portion at stabilization or achievement of a minimum debt service coverage ratio, and the balance once the 8609 form is issued and the credit is confirmed. Until each installment funds, the construction lender is effectively carrying the project further than the loan-to-cost ratio alone would suggest.
We size the construction loan and the interest reserve to bridge each gap in the pay-in schedule, and we confirm with the tax credit investor's counsel exactly what triggers each installment before the construction loan closes. A delay in stabilization or in the timing of cost certification can push an equity installment back by months, and the construction loan needs enough reserve and enough term flexibility to absorb that without a default.
We also coordinate the intercreditor terms between the construction lender and the tax credit investor directly, since most investors require specific notice and cure rights before a lender can accelerate or foreclose. Getting that language right before closing avoids a renegotiation under pressure later.
In most cases, yes. A refinance is not a disposition, and taking cash out through a refinance generally does not trigger recognition of the deferred gain or forfeit the anticipated step-up to fair market value at the 10-year mark, provided the QOF's equity interest in the QOZB is not sold or otherwise disposed of as part of the transaction. The refinance simply adds debt at the property level.
Where this gets more delicate is a cash-out refinance sized aggressively enough that the transaction, combined with a subsequent distribution to investors, could be viewed as a disguised sale or a return of capital that changes the character of the investment. That determination sits with the fund's tax counsel, not with us, but we structure the loan amount and the timing of the transaction in coordination with that counsel so the refinance does what the sponsor needs without creating a question the fund would rather not answer.
We also plan the refinance around the actual 10-year anniversary date on a deal-by-deal basis, since investors in the same QOF may have different anniversary dates depending on when their individual capital gain was invested. A single refinance transaction sometimes needs to account for more than one holding period clock.
The core problem on most 4 percent bond deals is sequencing. A sponsor often will not commit fully to a construction lender until the bond cap allocation is confirmed, but many construction lenders will not commit fully until they see a confirmed bond allocation, and the state's allocation calendar does not wait for either side to feel ready. We run parallel conversations with two or three construction lenders as soon as the bond application is submitted, rather than waiting for the allocation letter to start the lender search.
We also prepare lenders in advance for the specific mechanics of a tax exempt bond structure, including the cash collateralization or letter of credit requirements some lenders impose during construction, and the requirement that at least 50 percent of the project's aggregate basis be financed with tax exempt bonds for the 4 percent credit to be available at all. A lender who has not underwritten a bond deal recently sometimes needs this walked through explicitly before committing.
By the time the bond cap allocation comes through, we want a construction lender already at term sheet stage, not starting underwriting from scratch. That is the difference between closing inside the state's required timeline and losing the allocation to a deadline.
It is not automatically a hard stop, but it does change which lenders make sense. Restricted rents on an affordable housing deal produce more predictable, less volatile cash flow than market rate real estate, even at a headline DSCR that looks thin next to a conventional underwrite. CDFIs, housing finance agency soft debt programs, and some mission-driven bank lenders underwrite that stability as a credit strength rather than defaulting to the same coverage minimums a conventional lender would require.
Where the coverage gap is too wide even for a mission-aligned senior lender, we layer in soft debt from a housing finance agency, HOME funds, or a deferred developer fee to reduce the senior debt amount to a level the project's actual cash flow supports. The goal is not to force a deal to work at a debt level it cannot service, it is to size the senior debt correctly and fill the remaining gap with the right subordinate capital.
We tell a sponsor early, before significant time is spent on a lender that will decline on DSCR alone, which capital sources are realistic for the coverage the project actually produces. That saves months compared to running the deal through a conventional bank first and finding out the coverage does not work after underwriting is already underway.
For opportunity zone fund sponsors, LIHTC syndicators, affordable housing developers, and the attorneys and consultants who advise them: contact Trevor Damyan directly. No forms, no gatekeepers. Tell us the deadline you are working against and we will tell you what the financing options look like.