Boston Financial has announced raising $164 million in its latest low-income housing tax credit (LIHTC) fund.
Boston Financial Institutional Tax Credits 59 (ITC 59) is the second multi-investor LIHTC fund syndicated by the firm this year. It secured commitments from seven institutional investors, including a mix of regional and national banks and insurance companies.
The capital will be deployed to 14 affordable housing developers—over 40% of whom are nonprofit organizations.
The fund will help finance both new construction and preservation of 22 affordable housing properties in 18 communities across 10 states: California, Illinois, Kentucky, Louisiana, Massachusetts, Montana, Nevada, North Carolina, Ohio, and Tennessee.
“Funding and building affordable housing in the current economy is challenging, with developers facing higher interest rates and expense structures and investors struggling to generate satisfactory returns relative to increased cost of capital amid disruption in the capital markets,” said Todd D. Jones, head of tax credit equity production at Boston Financial. “Attracting deals and capital for a $164 million fund in this market is a remarkable achievement that we are very proud of at Boston Financial.”
ITC 59 is expected to create nearly 1,980 new jobs, bringing an estimated $223 million in wages and business income to the surrounding communities, as well as almost $77 million in tax revenue. Nearly 70% of the properties will bring affordable rental homes to minority communities, and several properties will have units designated for seniors, persons with physical or mental disabilities, and formerly unhoused people.
The latest fund includes communities such as Vanderbilt Apartments, a 123-unit property for seniors in Asheville, North Carolina, that was originally constructed in 1924 as a hotel before being converted to affordable housing in 1969. Boston Financial is working with nonprofit National Church Residences on the community, where 13 apartments will be dedicated to persons with disabilities or struggling with homelessness. Vanderbilt Apartments features expansive support services and a resident services coordinator who helps residents access the support and medical services they need to remain living independently in their own homes.
Since the beginning of the LIHTC program in 1986, Boston Financial has worked with more than 200 investors to preserve or build over 360,000 affordable homes.