After operating in 2017 with unknowns as to when and how tax reform would occur, the tax credit investment industry now has clarity as we enter 2018.
Lower tax rates are good news for banks. With these lower rates, we’re likely to see some current investors curtailing their investment appetite, or exiting the market entirely, if only for a period of time. Pricing is expected to adjust to maintain recent yields, because tax losses are now worth less at the lower marginal corporate tax rate.
There’s also a possibility that yields may need to increase to account for the loss of demand from current investors. This is offset somewhat by the reentry of Fannie Mae and Freddie Mac as affordable housing investors. All this variability makes 2018 an opportune time to inquire about investment opportunities.
As a financial institution, your organization can:
U.S. Bank can help. For more information, please contact your U.S. Bank representative or visit usbank.com for an overview of our community development industry experts.