New Equity Fund Will Boost Capital for Projects in Upstate New York

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Tax Credit Advisor, March 2009: A New York housing agency has announced the creation of a new equity fund to jumpstart equity investment in low-income housing tax credit (LIHTC) projects in Upstate New York.

“The economic crisis has jeopardized the ability of affordable housing developers to secure financing, particularly upstate,” said Deborah VanAmerongen, Commissioner of the New York State Division of Housing and Community Renewal (DHCR). “The equity fund model has been used successfully in other states to make it easier and more attractive to invest in affordable housing, and I’m confident it will be effective means of keeping the affordable housing market healthy here in New York.”

The Upstate New York Equity Fund is being established and will be managed by Great Lakes Capital Fund, a Michigan-based nonprofit and syndicator that operates several state tax credit equity funds.

DHCR worked with the New York State Association for Affordable Housing and other partners in the development community to create the new Upstate Equity Fund to encourage banks to participate in the LIHTC program and create affordable housing in their communities.

James Logue III, COO of Great Lakes Capital Fund, recently told the Tax Credit Advisor that a prospectus for the Upstate Equity Fund’s first tax credit fund would be issued shortly; that marketing to prospective investors has begun; and that efforts are underway to start creating a pipeline of projects. He said the initial sizing of the first fund, a multi-investor fund, is $30 million.

Logue noted the Fund will actively seek to invest in housing credit projects in New York State other than in New York City and Westchester County. He noted the Fund is open to investment in projects of all types, with for-profit or nonprofit sponsors, and in metropolitan or rural areas.

Logue indicated the Fund will solicit investments both from financial institutions and from non-financial institutions, including firms that haven’t invested in housing credits before.

“We think that this could be appealing to some national and regional banks that have CRA [Community Reinvestment Act] need, possibly in Upstate,” as well as to community banks and smaller banks, Logue said. He noted the minimum investment size will be $250,000.

(Details: http://www.capfund. net/site/133/default.aspx)