Freddie Mac has closed its first Low-Income Housing Tax Credit Fund with Enterprise Community Investment Inc. and completed its first equity investment within that fund. The closing marks Freddie’s re-entry into LIHTCF market after an almost ten-year absence; the fund is the mechanism that finances most of the country’s affordable rental housing.
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Freddie Mac enters low income housing tax credit market.[/caption]
The fund will invest nationwide to create and preserve affordable homes. It will focus on areas and transactions that have been underserved over the past decade, such as rural communities, four percent LIHTC financing, and developments that provide intensive supportive services to their residents, such as health care and job training. The fund will provide as much as $100 million in targeted affordable housing investments, with more investments possible as additional transactions are closed. Since 1982, Enterprise has invested $12.8 billion in LIHTC equity to finance more than 150,000 homes.
This is “our first Low-Income Housing Tax Credit fund in nearly a decade, and the first transaction as part of that fund,” said David Leopold, vice president for targeted affordable Sales and investments. “This transaction with Enterprise is the first of many investments that will provide highly targeted affordable housing to some of the most underserved communities in the country.”
Also, Freddie Mac and Enterprise announced an $8.2 million investment in Wintergreen West, which will provide 40 apartment homes for residents of Summit County, Colorado, a rural area 75 miles west of Denver. The units will range from one- to three-bedrooms and offer homes to people earning 30-60 percent of the area’s median income. Currently, it is difficult for low- and moderate-income residents to find affordable homes in the area, and short-term rentals have exacerbated the challenge. This new construction will be part of a larger, mixed-income community.
“This fund restarts a crucial partnership for producing well-designed, affordable homes,” said Charlie Werhane, president and CEO of Enterprise Community Investment. “We look forward to working with Freddie Mac to provide homes that create opportunity for low- and moderate-income people in diverse, thriving communities.”
More than 19 million households across the country are cost-burdened, meaning they pay more than 30 percent of their income for housing. Eleven million are severely cost-burdened, paying more than 50 percent of their income for housing. Freddie Mac and Enterprise are proud to be working together to address this vast and growing need through the Low-Income Housing Tax Credit.
