If you need a restaurant recommendation in Atlanta, Chicago, New Orleans, or dozens of other cities, just ask John Rucker. Chances are good he has held a deal closing dinner there.
During his long, productive career, Rucker has been involved in an estimated 1,183 affordable housing deals across the country, accounting for approximately $16.8 billion in financing. And, that’s a conservative estimate.
After briefly serving as an assistant attorney general for Alabama, working in the criminal appellate division, Rucker knew he wanted a different career, so he joined an investment banking firm based in Montgomery, Alabama. There, he eventually helped Weyerhaeuser, a timberland company that needed housing for its workers, issue bonds in Arizona and Utah. He would go on to work on several other multifamily housing bond deals—the seeds to grow his career.
“How rewarding is it to do something impacting the lives of people who need affordable housing?” says Rucker, the son of an FBI agent who fought the Ku Klux Klan in the South in the 1960s.
Along with three partners, Rucker co-founded Merchant Capital, a public finance investment banking firm, in 1987. He would soon close his first deal utilizing a new federal resource that was emerging at the time—the low-income housing tax credit (LIHTC)—for a deal in New Orleans. The tax credit price then was a modest 42 cents.
“It created a whole career for me from that early beginning all the way up until now,” he says.
Serving as a bond underwriter, Rucker became a growing and steady presence in the affordable housing industry, providing debt for 4% LIHTC and tax-exempt bond issues. Few firms stood as tall during the global financial crisis in 2008 when the market for long-term, fixed-rate bonds dried up.
Rucker and his team, along with their bond counsel, advanced a new strategy—cash-collateralized bonds. Partners would still issue bonds to access 4% LIHTCs, but, under the new structure, the bonds are just two or three years in duration and paid off when the project is placed in service unlike the 30- or 40-year bonds that were common at the time. This helped finance affordable housing at a time when investors were shying away from longer-term tax-exempt bonds.
Rucker’s team has since done more than 500 of these cash-collateralized bonds, which have become a common structure for financing affordable housing.
“He spoke at many conferences, and literally hundreds in the industry trusted his leadership in deciding to invest in deals financed with this new structure,” says Chris Hite, CEO of Sugar Creek Capital. “Developers in the Southeast got the message so clearly that they now have hit bond cap limits. The 4% industry has had a record production. None of this would be possible without John’s influence.”
While deals are often focused on the numbers, Rucker also embraces the personal side of business. Dinners became an important way to celebrate a deal closing as well as a business development tool.
“If I could get the working group to go to dinner and to hang out socially, there would be a table full of talent that might remember you the next time they had a deal,” he says.
Merchant Capital was acquired by Stifel in 2015, increasing the firm’s national presence. Rucker manages the affordable housing group, which is made up of about 18 people, and has been a mentor to them and others in the industry. His three daughters have gone on to work in housing.