Enterprise Community Partners’ low-income housing tax credit (LIHTC) business closed a record $1.7 billion in capital last year.
It was the fourth consecutive record year for the firm, says Scott Hoekman, president of Enterprise Housing Credit Investments, who attributes the performance to a strong team and a track record of meeting the needs of developers and investors.
“We’re hoping to do a little more this year, but we’re also cognizant of the continuing challenges,” he says, citing rising interest rates and cost increases for projects as well as the processing capacity of different stakeholders to get deals done.
Despite the persistent headwinds, the LIHTC syndicator has plans for a mix of multi-investor and proprietary funds this year while also bringing some new innovative products to the market.
Enterprise recently closed a $190 million LIHTC fund designed specifically to support economic mobility with a focus on racial equity.
The Equitable Upward Mobility Fund (EUMF) aims to help create more than 900 homes and support nearly 2,500 residents. With commitments from American Express, Comerica, Fifth Third, First Republic, JPMorgan Chase, and U.S. Bank, the fund builds on Equitable Path Forward, Enterprise’s five-year, $3.5 billion initiative to help dismantle the legacy of racism in housing.
The company and other LIHTC syndicators have long invested in developments that meet community needs by providing housing and services for low-income families, seniors, and people who have been homeless. But, the EUMF is the first of its kind for Enterprise as it develops new concepts and identifies new criteria for identifying social impact, according to Hoekman.
Projects in the fund had to meet one or more of a selection criteria identified by Enterprise. These included sponsorship by a developer of color, use of an evidence-based program model supporting upward mobility, or a location that’s in a high-opportunity neighborhood or a neighborhood experiencing targeted redevelopment.
About 10 projects are in the fund, with all but one having a BIPOC sponsor, and some projects meet more than one criteria. A second EUMF is in the works.
Going into the second half of the year, he will be keeping an eye on several issues that could impact the tax credit market, including the state of the overall economy as well as the recent challenges in the banking sector.
Banks are the main investors in housing tax credits, so their appetite for credits is critical. In addition to providing economic benefits, LIHTC investments help banks meet their Community Reinvestment Act (CRA) requirements. As a result, potential CRA reform is another issue to watch this year.
The good news is that investor demand in the recent first quarter was strong, holding steady with the prior year, according to Hoekman.
Hopefully, that foretells the rest of the year for developers, families in need of affordable housing, and syndicators like Enterprise that are eager to do more deals.
“We have a very robust pipeline,” Hoekman says.
| RANK + COMPANY | HEADQUARTERS | CORPORATE OFFICER | UNITS SYNDICATED 2023/2022 | RANK 2022 |
|---|---|---|---|---|
| 1. Boston Financial Investment Management | Boston, MA | Greg Voyentzie and Marie Reynolds | 167,957/176,461 | 1 |
| 2. The Richman Group Affordable Housing Corporation | Greenwich, CT | Richard Paul Richman | 166,649/161,450 | 7 |
| 3. Raymond James Affordable Housing Investments | St. Petersburg, FL | Steve Kropf | 152,265/141,458 | 2 |
| 4. PNC Real Estate | Portland, OR | Todd Crow | 135,041/140,627 | 3 |
| 5. National Equity Fund | Chicago, IL | Matthew Reilein | 123,850/115,921 | 4 |
| 6. Enterprise Housing Credit Investments | Columbia, MD | Scott Hoekman | 115,212/114,747 | 5 |
| 7. Hudson Housing Capital | New York, NY | Joseph Macari | 70,452/65,451 | New |
| 8. Alliant Capital, a Walker & Dunlop Company | Woodland Hills, CA | Katie Balderrama | 69,410/72,998 | 6 |
| 9. WNC | Irvine, CA | Wilfred N. Cooper, Jr. | 67,435/62,302 | 9 |
| 10. Hunt Capital Partners, LLC | Encino, CA | Jeffrey Weiss | 63,986/71,470 | 8 |
