Freddie Mac has made its first low-income housing tax credit (LIHTC) equity investment in tribal housing through its fund with RBC Capital Markets (RBCCM) Tax Credit Equity Group.
The $9.4 million investment in Yavapai-Apache Nation Tribal Housing in Arizona will support 35 new units targeting members of the tribe with incomes of up to 40%, 50%, and 60% of the area median income. The three- and four-bedroom homes will benefit from a tribal Housing Assistance Payments program, which will allow tenants to pay no more than 30% of their income toward rent.
“Affordable housing is desperately needed on tribal lands where poverty is high and sources of capital are limited,” said David Leopold, vice president of Targeted Affordable Sales and Investments at Freddie Mac. “There are more than a hundred families on the Yavapai-Apache Nation Tribal Housing waitlist. Through our LIHTC equity investment with RBCCM, we’ll be able to meet the housing needs of nearly a third of those in need of an affordable place to live.”
Dubbed Yavapai VII, the new development will include 30 single-story, three-bedroom units and five four-bedroom homes. Each unit will include an attached two-car garage as well as two uncovered driveway parking spaces. All units also will feature roof-mounted solar panels intended to reduce tenant-paid utility expenses.
Residents of Yavapai VII and the broader community will benefit from a 7,800-square-foot community building, where tutoring, supplemental lessons on Yavapai-Apache culture, financial literacy, job training, resume development, interview practice and networking, and nutrition classes/cooking demonstrations will be available at no cost.
“The Yavapai-Apache Nation is honored that Freddie Mac stepped forward to invest in this project—a project that will, in the end, provide much-needed relief to the current housing shortage situation of our people and provide high quality, safe, and affordable housing for the men, women, children, and elders of our Nation,” said Lawrence Jackson Sr., vice chairman of the Yavapai-Apache Nation.
Freddie Mac reentered the LIHTC equity investment market in 2018 with six proprietary funds, including one with RBCCM. The Freddie Mac-RBC Fund invests in the creation and preservation of affordable rental housing across the country, focusing 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 also invests in supportive housing for special-needs populations and housing in disaster affected areas.
“Freddie Mac’s investment underscores their commitment to deliver capital to both geographic and demographic components of the housing market that have experienced challenges attracting LIHTC investment capital,” said Eric Moody, managing director-underwriting for RBCCM’s Tax Credit Equity Group.
The fund has provided more than $190 million in targeted affordable housing investments across 12 transactions, including two in Puerto Rico and 10 across seven states, including Alabama, Arizona, New York, South Carolina, Tennessee, Texas, and West Virginia.