Year 15 (LIHTC)
Year 15 is the equity-exit decision point of a Low-Income Housing Tax Credit deal — the end of the 15-year federal compliance period during which the investor's tax credits can be recaptured by the IRS.
When a LIHTC property is placed in service, its investor (usually a bank or a fund) begins claiming credits over roughly ten years, but stays exposed to recapture for fifteen. At year 15 that exposure ends, and the limited-partner investor generally wants out. What happens next is the central recapitalization event in affordable housing:
- The general partner buys out the investor — often for a nominal price under a right of first refusal or purchase option negotiated at closing — and continues operating, frequently followed by a refinance or rehab.
- The property resyndicates — a new allocation of credits funds a renovation, restarting the clock with fresh equity.
- The property sells — to a preservation buyer, another developer, or (where the rules permit an exit) toward market-rate conversion.
Year 15 does not end rent restrictions. For allocations from 1990 onward, the extended-use period continues them to at least year 30 (see extended use) — but the ownership and capital structure almost always changes at or around year 15, which is why brokers, syndicators, and lenders track the "year-15 wave" so closely.
The wave is measurable from public data: HUD's LIHTC database records each project's placed-in-service year, and year 15 follows mechanically. Roughly 85,000–90,000 low-income units hit year 15 in 2024 alone, with similar cohorts each year through the late 2020s — a figure our dataset reproduces within about 3% of Novogradac's published estimate.