Freddie Mac has closed a low-income housing tax credit (LIHTC) fund with Boston Financial Investment Management and initiated its first investment within the fund. The closing marks Freddie Mac’s third housing credit fund since re-entering the market in September and its first fund managed by Boston Financial.
The affordable housing fund will focus on transactions in areas that have been underserved over the past decade, such as rural communities, 4% LIHTC financing, and developments that provide intensive supportive services for their residents. It will provide as much as $100 million in targeted affordable housing investments, with more investments possible as additional transactions are closed.
The first transaction financed through the Freddie Mac-Boston Financial fund is a $5.5 million LIHTC equity investment in the rehabilitation of Riverwood Village Apartments, a Sec. 8 family property in Russellville, Ark.
Built in 1976, Riverwood consists of 72 units within eight, two-story walk-up buildings. The sponsor is RichSmith Development, and the scope of work includes full exterior and interior renovations, including but not limited to installation of energy-efficient windows, HVAC-system upgrades, new energy-efficient lighting, new flooring, and kitchen and bathroom replacements. Several community amenities will be upgraded or added as well, including a new playground, community rooms, a fitness center, a business center, and library and laundry rooms. Six of the units will be converted to be handicap accessible.
“We are pleased to be joining with Boston Financial Investment Management on a LIHTC syndicator fund that will be instrumental in creating and preserving affordable rental housing across the country,” said David Leopold, vice president of Targeted Affordable Sales & Investments at Freddie Mac, in a statement.
Freddie Mac said it partnered with Boston Financial because of the firm’s deep expertise with the LIHTC program and commitment to serving communities in need through proprietary LIHTC funds.
“The preservation and rehabilitation of Riverwood Village will have a tremendous positive impact on the families that live there as well as the surrounding community of Russellville,” said Sarah Laubinger, executive vice president of Boston Financial. “We are honored to be one of Freddie Mac’s select LIHTC syndicator partners and look forward to working together to further our shared mission of bringing safe, quality, and affordable housing to communities across the country.”
Freddie Mac partnered with Hudson Housing Capital and Enterprise Community Investment, now Enterprise Housing Credit Investments, on its two earlier funds this year.
To date, Boston Financial has raised and managed over $11 billion of low‐income housing and historic tax credit equity investments, comprising 2,400 properties and 220,000 units. It is a wholly owned subsidiary of ORIX Corporation USA, a diversified financial services company headquartered in Dallas.
