AHIC Updates Sponsor/Guarantor Liquidity and Net Worth Underwriting Guidelines

WASHINGTON, D.C. — The Affordable Housing Investment Council (AHIC) today announced an update to its guidance on sponsor and guarantor liquidity and net worth, replacing fixed-dollar minimum thresholds with a risk-calibrated underwriting framework. The changes are reflected primarily in an expanded Appendix II of AHIC’s Guarantor Analysis Guidance, with conforming edits to the relevant section of the 2018 AHIC Underwriting Guidance.

AHIC’s previous guidance established fixed-dollar minimums for guarantor net worth and liquidity that had become widely cited industry benchmarks—even as AHIC’s investor members recognized that guarantor capacity is inherently deal- and risk-specific. A task force of credit officers spent the past year developing a framework that better reflects how underwriting actually works in practice.

The expanded Appendix II replaces the old pass/fail thresholds with a structured set of project-level and guarantor-level underwriting considerations, including equity commitment and timing, sources and uses, guarantor balance sheet composition, contingent obligations, and REO portfolio performance. It also tightens the definition of liquid assets and retains the percentage-based construction liquidity benchmarks. The fixed-dollar net worth and liquidity minimums have been removed from both documents.

“This update reflects how our members actually approach guarantor analysis—not as a pass/fail test against a single number, but as a structured assessment of whether a sponsor can support a project through its full arc of risk,” said Vihar Sheth, President of AHIC. 

AHIC is characterizing today’s announcement as an interim step. The organization has launched a comprehensive project to review and update its full 2018 Underwriting Guidance, with the liquidity and net worth update released now given the urgency identified by the Underwriting Committee.

The updated Appendix II and the revised 2018 Underwriting Guidance are available to AHIC members at www.ahic.org. 

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About AHIC
The Affordable Housing Investors Council (AHIC) is the national trade association representing investors in the Low-Income Housing Tax Credit (LIHTC) program.  AHIC members provide the equity that finances affordable rental housing across the United States, and work to promote policies and best practices that support the long-term success of the program.

Media Contact
Kim Duty 
Executive Director 
kduty@ahic.org 
303/475-9695