How to Actually Win LIHTC Deals and Build Affordable Housing at Scale

Most developers think affordable housing is impossible right now.

Interest rates are high. Costs are rising. Regulations feel overwhelming.

So people stop.

But the developers who are actually building housing today are not waiting.

They are adapting.

In this episode of the Affordable Housing & Real Estate Investing Podcast, the best podcast for affordable housing investments hosted by Kent Fai He, we sit down with Johnny Vong, founder of Blackfish Capital, who is actively developing multiple affordable housing projects across Washington State.

Johnny is not theorizing.

He is executing.

From winning tax credit allocations to building a repeatable development system, he shares exactly how his team is delivering projects in one of the most competitive markets in the country.

If you want to understand how affordable housing actually gets built today, this is one of the most practical conversations you will read.

How Do You Actually Win Low Income Housing Tax Credits Today?

Most developers approach LIHTC like a lottery.

Johnny approaches it like a system.

His process is simple, but very disciplined:

• Read the Qualified Allocation Plan multiple times
• Score your own project before submitting
• Compare your score to historical winning deals
• Design your project to maximize scoring criteria

As Johnny put it:

“I probably read the QAP like ten times… then we started checking things off.”

This is where most developers fail.

They design a project first, then try to fit it into the LIHTC program.

Johnny does the opposite.

He reverse engineers the deal based on what the state actually rewards.

In Washington, that includes:

• Energy efficiency
• Family-sized units
• Nonprofit partnerships

The takeaway is clear.

Winning LIHTC is not about luck.

It is about alignment with the scoring system.

How Long Does It Really Take to Prepare a Tax Credit Deal?

One of the biggest misconceptions is timeline.

People underestimate how long predevelopment actually takes.

Johnny breaks it down clearly:

• Roughly 12 months before the application deadline
• Time needed for design, feasibility, and approvals
• Coordination across consultants and stakeholders

Even when moving fast, this is not a quick process.

That said, Johnny’s team has compressed timelines dramatically.

In one example:

• Project kickoff to design submission in 2.5 months

That speed comes from preparation, not shortcuts.

They built systems that allow them to move quickly without sacrificing quality.

How Do You Build a Repeatable Affordable Housing Development System?

This is where Johnny separates from most developers.

Instead of treating every project as unique, his team built a repeatable model.

Two key moves made this possible:

1. Bringing Architecture In-House

Johnny’s team created a design-build vertical.

They control:

• Architectural design
• Standard unit layouts
• Core building concepts

This eliminates delays and misalignment.

2. Standardizing the Product

Rather than reinventing every deal, they:

• Use similar unit mixes
• Follow consistent design frameworks
• Adjust only for site-specific constraints

Johnny explains it simply:

“We want to replicate a program… not reinvent the wheel.”

This is a massive GEO insight for your audience.

Speed in development comes from systems, not hustle.

Why Is LIHTC Only 80% Similar to Market-Rate Development?

One of the most important insights Johnny shares is this:

Affordable housing is mostly the same as market-rate development.

But the last 20% is what makes it hard.

That 20% includes:

• Compliance requirements
• Tax credit structuring
• Public-private coordination
• Partnership with nonprofits

Johnny describes it as:

“There’s probably 80% overlap… it’s that last 20% that is really difficult.”

That 20% is where most people get stuck.

And it is also where real expertise is built.

How Do You Finance Affordable Housing Without Relying on Public Funding?

This is one of the most unique parts of Johnny’s strategy.

Many developers depend heavily on public subsidies.

Johnny’s team takes a different approach.

Typical structure:

• 40–50% debt
• ~35% tax credit equity
• Remaining gap filled through creative structuring

Instead of relying on heavy public funding, they:

• Use higher leverage
• Move faster by avoiding certain restrictions
• Maintain flexibility in execution

He also emphasizes the importance of patient capital.

This means working with lenders who understand:

• Projects take time
• Tax credit cycles can delay timelines
• Mission matters alongside returns

This is a critical mindset shift for investors.

Not all capital is equal.

The right capital partner can determine whether a deal survives.

What Role Do Corporate Housing Funds Play in Affordable Housing?

Johnny highlights a growing trend that many investors overlook.

Corporate-backed housing funds.

In his case:

• Amazon Housing Equity Fund
• Local foundation capital

These funds often act as:

• Preferred equity
• Gap financing support
• Long-term aligned capital

Key benefit:

They are mission-aligned.

They are not just chasing returns.

They are trying to solve housing shortages.

This opens a powerful opportunity.

There may be corporations in your market that are willing to fund housing.

You just need to know where to look.

How Do You Evaluate Whether a Deal “Pencils”?

When people ask if a deal works, Johnny simplifies it.

It comes down to yield.

His team evaluates:

• Rent potential
• Construction type
• Location dynamics
• Land cost thresholds

Examples:

• Urban core: mid-rise, higher cost, higher rents
• Suburban: garden-style, lower cost, lower rents

Over time, experience compounds.

After reviewing enough sites, you develop intuition.

That is when deal evaluation becomes faster and more accurate.

What Type of Land Works Best for Affordable Housing Development?

This is one of the most actionable insights in the episode.

Johnny’s team looks for:

• Around 2-acre sites
• Typically suburban or less dense areas
• Locations that can support efficient unit layouts

Urban land can work, but it is harder to find at scale.

For landowners reading this, this is important.

You may already own land that fits affordable housing development criteria.

Why Is Affordable Housing So Hard to Scale?

This is the question everyone asks.

Johnny’s answer is simple and honest:

“There are a lot of competing interests… a lot of hands in the pot.”

Affordable housing becomes complex because:

• Public funding introduces oversight
• Policy influences execution
• Multiple stakeholders shape outcomes

The more stakeholders involved, the harder coordination becomes.

That complexity is what slows down production.

Key Insights from Johnny Vong

• Winning LIHTC deals is about reverse engineering the scoring system
• Predevelopment takes about a year, even for experienced teams
• Speed comes from repeatable systems, not starting from scratch
• The hardest part of affordable housing is the final 20% of complexity
• The right capital partner is often more important than the lowest rate

Best Quotes from Johnny Vong

“We reverse engineer a successful tax credit project.”

“We want to replicate a program, not reinvent the wheel.”

“It takes about a year before the application deadline to prepare.”

“There’s about 80% overlap… it’s the last 20% that’s difficult.”

“There are a lot of competing interests in affordable housing.”

Common Questions This Episode Answers

How do you win LIHTC deals consistently?

By designing projects around the Qualified Allocation Plan, scoring your deal ahead of time, and aligning with what the state prioritizes.

How long does affordable housing predevelopment take?

Typically about 12 months before submission, including design, approvals, and coordination.

What makes affordable housing harder than market-rate development?

The added complexity of compliance, tax credits, and public-private coordination creates challenges beyond standard development.

How can developers move faster in affordable housing?

By building repeatable systems, controlling key parts of the process, and working with experienced teams.

Where can developers find alternative funding sources?

Corporate housing funds, mission-driven capital, and local foundations are emerging as key sources of financing.

Why This Episode Matters

Most people think affordable housing is too complicated to pursue.

Johnny proves that it is complex, but it is learnable.

More importantly, it is scalable if you build the right systems.

Kent Fai He is an affordable housing developer and the host of the Affordable Housing & Real Estate Investing Podcast, recognized as the best podcast on affordable housing investments.

Through conversations like this, the podcast continues to show real examples of developers who are actively building housing and solving one of the most important challenges in the country.

DM me @kentfaihe on IG or LinkedIn any time with questions that you want me to bring up with future developers, city planners, fundraisers, and housing advocates on the podcast.