Thirty-two low-income housing tax credit (LIHTC) syndicators surveyed by the Government Accountability Office (GAO) have raised more than $100 billion in equity to help finance more than 20,000 affordable housing properties.

The new report offers insight into the role of syndicators and their activities but makes no recommendations. This is the third recent LIHTC-related report to be released by the GAO, which reviewed IRS oversight of the program in 2015 and the role LIHTC allocating agencies in 2016.

To determine the characteristics of the syndicators, the GAO identified and verified 36 syndicators active as of October 2015. It then gathered data for 32 firms in total—31 through a no-cost contract with CohnReznick, a national accounting firm. The GAO also interviewed a number syndicators, investors, developers and other stakeholders.

The more than 20,000 developments financed by the syndicators since 1986 have resulted in about 1.4 million affordable homes. Only 138 properties were foreclosed upon, representing about 1% of their collective LIHTC properties placed in service as of October 2015, according to the GAO.

The study of 19 for-profit and 13 nonprofit syndicators found that:

· All the for-profit syndicators and four nonprofit syndicators operated in more than 10 states; 10 for-profit and two nonprofit syndicators operated in more than 40 states;

· As of October 2015, there was an average of 17 active syndicators operating in each state, with California (23), Illinois (23), Indiana (24), Michigan (24), and Texas (23) having the most;

· Both nonprofit and for-profit syndicators averaged more than 20 years of experience with LIHTCs, and collectively, the surveyed syndicators averaged 24 years of experience. Twelve of the 13 nonprofit syndicators had worked with the LIHTCs for at least 21 years, and one nonprofit and eight for-profit syndicators had participated in LIHTCs since their enactment in 1986. In contrast, four for-profit syndicators had less than 10 years of LIHTC experience;

· The 32 surveyed firms closed more than $100 billion in equity since 1986. Of that amount, about 71% (about $71 billion) was raised from 2005 through 2014. In this period, syndicators closed more than $6.6 billion in equity annually, with the exception of 2008 ($5.3 billion) and 2009 ($4.3 billion). The decline in 2008 and 2009 is attributed to the economic recession and the withdrawal of investors Fannie Mae and Freddie Mac from the market; and

· Collectively, the syndicators closed an average of 32 funds from 2005 through 2014. About two-thirds of all the funds closed during this period were proprietary funds. But the average value of the closed multi-investor funds was about $95 million, while the average proprietary fund closed was about $54 million.

Sen. Chuck Grassley (R-Iowa), who called for the reports into the LIHTC program, was critical that the latest information was not available from the Internal Revenue Service and the Department of Housing and Urban Development.

"The fact that the GAO needed to issue a separate explanation of the role of syndicators shows you just how complex this program has become," he said in a statement. "The fact that GAO had to rely on a third-party contractor database for syndicator information because neither the IRS nor HUD maintains that information tells you that no one is minding the store. The complexity underscores my concern that the IRS and HUD don’t seem to know whether a multi-billion dollar program for low-income housing has worked as intended."

The GAO has another report under way to look at overall costs of LIHTC projects including syndicator earnings, construction costs, developer fees and any cost-containment strategies, continued Grassley.

"These findings will help Congress know whether the tax credit is serving low-income people who need housing and the taxpayers who deserve accountability," he said.

The GAO reports that syndicators can play several key roles in developing and monitoring LIHTC developments, including connecting investors to projects, evaluating deals and acquiring properties, monitoring projects during construction, conducting ongoing asset management, helping underperforming properties, and disposing of interest in properties at the end of the properties’ 15-year compliance period.

In addition, some of the market participants interviewed suggested that syndicators can help investors receive their expected rate of return, according to the GAO report.

The GAO says syndicators typically are compensated for these services in two ways. “First, syndicators receive an acquisition fee—usually a percentage of the gross equity raised—when the asset is acquired that is intended to compensate the syndicator for services, cover third-party costs such as legal and accounting fees, and fund reserves to protect the investment,” says the report, noting that one stakeholder estimated this fee ranged from 2% to 5% of the total investment.

Second, syndicators may receive an annual asset-management fee over the life of the investment to cover actual expenses, such as accounting services and contributions to reserves. These fees are negotiated and typically are a percentage of the invested assets or a fee based on the number of properties in the fund.

This story was updated March 2, 2017.