Developer Fees

Many HUD 221(d)4 projects qualify for a developer fee to recoup sweat equity and risk. For example LIHTC projects and many affordable housing projects qualify for a developer fee. Market rate HUD 221(d)4 projects technically do not qualify for a developer fee, however there are structures such as BSPRA which can result in reduced equity requirements. Developers fees range from 10%-15% of eligible costs. The determination of equity requirements and developer fee is complex so it is best to complete and in depth analysis prior to concluding a project's equity requirements.