Freddie Mac and RBC Capital Markets’ Tax Credit Equity Group have closed a $180 million Low-Income Housing Tax Credit Fund, and they have already completed several transactions. Ten transactions have closed, including two in Puerto Rico and eight in New York, South Carolina, Tennessee, Texas and West Virginia.
The closing marks Freddie Mac’s fourth LIHTC fund since re-entering the market in 2018, and the first fund managed by RBCCM. The LIHTC program is the mechanism used to finance a majority of affordable rental housing across in the U.S.
Freddie Mac and RBC fund will invest in the development and preservation of affordable rental housing across the U.S. and Puerto Rico. The focus is on transactions in areas that have been underserved over the past decade, such as rural communities and intensive supportive services for their residents. It will also invest in supportive housing for special needs populations and housing in disaster affected areas.
The two investments in Puerto Rico serve the Caguas community that hurricanes Irma and Maria devastated in September 2017, and help build the José Gautier Benítez mixed-finance communities, on the site of a demolished public housing development.
The 238-unit family phase will receive a $37.5 million LIHTC equity investment, and the 200-unit senior phase will receive a $28.9 million investment. Together with $38.5 million in Community Development Block Grant-Disaster Recovery funds and $23.2 million in other public funds, funding for these developments is a substantial public-private partnership to assist Puerto Ricans most affected by natural disasters.
The buildings will have separate community rooms, on-site management offices, and a common area and courtyard. More than 80 percent of the family units will be affordable to tenants earning 60 percent or less of area median Income, and all the senior units will be affordable to seniors age 62 or older making 60 percent or less of the area median income.
The buildings have been designed to withstand future hurricanes and tropical storms and include backup generators that are sufficient to power the entire development in the event of a prolonged outage.
“Our fund will provide stability to underserved markets and deliver equity capital for affordable housing to communities across the U.S.,” said David Leopold, vice president of targeted affordable sales and investments at Freddie Mac. “The investments in Puerto Rico are particularly important to us. We all watched with horror as hurricanes ravaged the island and residents went without power for months. Among its many important investments, our fund with RBCCM is helping to build housing that is both affordable and resilient to future storms.”
