Birch Street Apartments, a 53-unit complex in
Makiki, Oahu
What is a Tax Credit Equity Fund?
A Tax Credit Equity fund is usually formed as a limited partnership or a limited liability corporation and raises capital from corporate investors for low-income housing projected assisted by the Low-Income Housing Tax Credit (LIHTC). The LIHTC is a federal and state program under which significant tax benefits are competitively awarded by the state's Housing Community Development Corporation of Hawaii (HCDCH) to developers of residential rentals that are targeted to low-income tenants.
The tax credits can either be held by the developers for their own use or sold to investors for the tax shelter they provide. Proceeds from the sale of credits become equity capital for the project.
HCRC's tax credit equity fund became active in 1996 placing or committing over $100 million in investments using funds managed by Hawaii Investors for Affordable Housing, Inc. (HIAHI).
The Funds and their descriptions are below:
|
Hawaii Affordable Housing Fund I (Fund I)* |
|
|
Amount |
$19,700,000 |
|
Units Produced |
424 Affordable Rental Units |
|
Investors |
American Savings Bank FSB Bank of Hawaii Central Pacific Bank City Bank Finance Factors Limited First Hawaiian Bank |
*Fund I was sold to SunAmerica Housing Partners in 2003.
|
Hawaii Affordable Housing Fund II (Fund II) |
|
|
Amount |
$20,000,000 |
|
Units Produced |
170 Affordable Rental Units |
|
Investors |
American Savings Bank FSB Bank of Hawaii Central Pacific Bank City Bank Finance Factors Limited First Hawaiian Bank |
|
Hawaii Affordable Housing Fund III (Fund III) |
|
|
Amount |
$12,500,000 |
|
Units Produced |
109 Affordable Rental Units |
|
Investors |
American Savings Bank FSB Central Pacific Bank City Bank Finance Factors Limited First Hawaiian Bank |
|
Hawaii Equity Fund IV Class A (Fund IVa) |
|
|
Amount |
$15,000,000 |
|
Units Produced |
134 Affordable Rental Units |
|
Investors |
American Savings Bank FSB Bank of Hawaii Central Pacific Bank City Bank Finance Factors Limited First Hawaiian Bank |
|
Diamond Head Fund |
|
| Amount | $35,900,000 |
| Units Produced | 246 Affordable Rental Units |
| Investors |
Bank of Hawaii Central Pacific Bank City Bank Finance Factors Limited First Hawaiian Bank Hawaii National Bank |
Hawaii Equity Fund IV Class C (Fund IVc) is currently in the subscription process and is expected to be fully subscribed in 2006.
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