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May 19, 2007



how does enterprise generate money?first of all enterprise pays developers a profit,
grants charrets and below market financing.
this is all done in a market that will not rebound until 2009 according to countrywide financial.all homes have fallen in value for the last 2 years and will continue to fall in value.why should taxpayers pay to educate a developer? enterprise is a flawed biz model.
all developers should waive any profit..
sweat equity should be used just like habitat for humanity..there should be a commercial energymortgage.
enterprise uses tax payer financing credits to orginate mortgage and takes fees. on the back of taxpayers...this enterprise is a failure of a company.



Thanks for the comment. I have always wondered myself...thanks for bringing up some of these questions...I did a little digging and here is what I found out.

Just to be clear, the low income housing tax credit is a Federal initiative...not an Enterprise initiative. Developers who are planning an affordable housing project come to Enterprise seeking some level of funding. These developers typically have a bank loan already in place; however, they still need additional equity. In order to get those funds from Enterprise, the developer must go out and apply for tax credits on the project. Once they have gotten tax credits, Enterprise helps to facilitate the sale of those credits to investors who will pay cash, creating the remaining equity the developer needs to complete the project.

In terms of waiving a profit...in a low income/affordable housing project, the developer is restricted in the rents (and ultimate cash flow) that he can make on the project. So, by layering in a profit for the developer, he is able to make some money for taking on the risk of the project in the first place. However, the Federal government caps/limits the amount of profit a developer can make...its actually highly scrutinized...I don't think the developer is making out like Donald Trump.

As far as I can tell, Enterprise helps developers raise the necessary cash to complete an affordable housing project. Units in these projects go to those who cannot afford the "market rate" for rentals. So, in my mind, Enterprise is facilitating a process to help those who can't afford it. Yes, they charge fees to structure the deal and get it done, but I don't have any heartburn over that. Seems fair. Enterprise makes money, developers get their deal done and make money, and tenants have another choice for affordable housing. I might not agree with every aspect of Enterprise's business model, but it seems like they are far from a "failure of a company."

Hamed Elbarki

I think it's a fantastic idea... kudos to them!

Schumacher Homes Press

Custom built homes are the best way to go in my opinion. That way you get exactly what you want from your new home and you won't need to spend all of that extra money on remodeling.

hypotheek tarieven

It is great to see such blog.Thanks guys keep going like this.

Valerie Jones-Property Investor

Not only is this good for the environment, but green housing is more cost effective for the tenants also.

Agata Renfrew

Investing in real estate is a wise move by any account, since real estate valuations tend to appreciate in time. With green housing, investors can make sure that the buildings will pass present and future environmental building codes. That could save a lot of money in costly renovation and upgrades.


Hopefully we will find a way out of this mess.

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