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Project Based Voucher ROI Calculator
PBV commitments stabilize rental income but restrict property flexibility.
Annual PBV rent
$1,710,000
Annual market gap
$360,000
Value uplift (cap compression)
$1,813,636
How the math works
Annual rent = contract × units × 12. Value uplift = NOI / (cap − cap compression) − NOI / cap.
$1,900 × 75 × 12 = $1.71M PBV rent. Cap compression 50 bps = $9.1M value uplift at exit.
How to Use
- Enter contract rent / mo.
- Enter market rent / mo.
- Enter unit count.
- Enter years of PBV commitment.
- Enter PBV premium bps on cap.
- Read PBV economics.
Frequently Asked Questions
What are project-based vouchers?
Section 8 vouchers attached to specific units (not portable with tenant). Owner signs HAP contract with PHA for 20+ year term. Gets guaranteed rent stream. Unlike tenant-based vouchers (portable), PBV units must stay affordable. Mix of: 100% PBV (all units), mixed-income PBV (20-50% units), minimum 5% PBV (project contribution). Increasingly common with new LIHTC deals to ensure tenant pipeline.
Economic advantages?
Guaranteed rent from creditworthy (HUD) payer. Eliminates tenant-credit risk. Predictable rent adjustments (OCAF). Long-term stability. Lender-favored (35-year amortization available). Cap rate typically 25-75 bps tighter for PBV-covered than equivalent market-rate. Value uplift: 5-15% over market-rate comparable at similar rents.
Drawbacks?
Rent limits OCAF-driven (typically below market). Must maintain HUD-compliant physical standards (annual inspections). Tenant restrictions (income, background). Lengthy eviction process. Committed 20+ years — can't pivot to market. Re-rent timing mismatches (PHA tenant selection delays). Requires specialized management expertise. Small owners struggle; institutional owners specialize.
Stacking with LIHTC?
Very common: 4% LIHTC + tax-exempt bonds + PBV is powerful affordable housing stack. LIHTC provides equity. Bonds provide low-rate debt. PBV provides rent stability. Combined: can make 100% affordable deal work economically. Operators specialize in this (Jamison Capital, Mercy Housing, NHP Foundation). Institutional investors allocate through specialized syndicators (Boston Capital, WNC, NDC).
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