New LIHTC Equity Opportunity to Provide Safe, Affordable Housing for Wisconsin Families and Seniors
Cinnaire has partnered with the Wisconsin Bankers Association (WBA) to launch a $10 million Low Income Housing Tax Credit (LIHTC) equity fund to support the financing of the new construction or rehabilitation of affordable housing communities across Wisconsin. The fund, which will close by the end of first quarter 2022, is open to all C corporations in the state.
Cinnaire has been changing lives and transforming struggling neighborhoods in Wisconsin for more than two decades. With offices in Milwaukee and Madison, Cinnaire’s Wisconsin team includes 14 staff that are on the ground supporting community and economic development while creating opportunities to empower families and lift up neighborhoods. The organization has invested in 81 affordable housing communities across Wisconsin. Cinnaire Solutions, the development division of Cinnaire, has developed or has in its pipeline five projects totaling 222 units and $54 million total development costs in Wisconsin.
“Cinnaire has a long history of inclusion bringing all stakeholders to the table to establish safe and affordable high-quality housing in communities that are seeking to prosper,” said Pam Hetz, Cinnaire Senior Vice President, Business Funding. “Our partnership with the Wisconsin Bankers Association will compound and strengthen Cinnaire’s community building efforts by supporting the most vulnerable individuals and families across Wisconsin.”
As a member of the Federal Home Loan Bank of Chicago, Cinnaire has participated in the annual competitive Affordable Housing Program (AHP) funding rounds since 2016, resulting in awards for Wisconsin totaling $19.1 million supporting 24 projects. AHP grants provide much needed GAP funding leading to lower rents for families to prosper. Cinnaire’s AHP awards have supported 1,607 families.
In the past 13 years, Cinnaire successfully partnered with both the Michigan Bankers Association and the Indiana Bankers Association to create funds totaling $121.5 million in affordable housing investments. These funds supported 76 communities across Michigan and Indiana with 5,950 affordable apartment homes for vulnerable individuals and families.
Tax credit investing is reciprocal – banks fulfill CRA and balance sheet goals and communities prosper. At a time when more than one in four households struggle to pay rent, preserving and developing affordable housing is most important than ever. Housing Tax Credits are the nation’s largest and most successful tool for encouraging private investment in the production and preservation of affordable housing. Over the past 30 years, the program has financed nearly 3 million affordable apartments, providing homes to more than 6.5 million low-income households.
A key benefit from equity investments in these LIHTC funds is that banks receive federal tax credits along with other tax benefits that reduce their federal corporate taxes. Banks also benefit from positive Community Reinvestment Act consideration from regulators and demonstrate to the communities they serve a commitment to expanding access to high-quality affordable housing, a key driver of economic mobility and family stability.
The 2022 Wisconsin Community Fund is currently open to investors. The minimum investment amount is $500,000. Investor equity will be used to support the new construction of rehabilitation costs of identified apartment communities in underserved areas. Federal tax credits will become available as each housing community is completed and leased to eligible households and the housing tax credits will continue each year during the 10-year tax credit delivery period. Cinnaire will asset manage each real estate investment throughout the 15-year LIHTC compliance period.
As a mission-driven nonprofit lender, Cinnaire helps investors accomplish their goals in underserved communities, including fulfilling the Environmental Social Governance (ESG) goals for the clients we serve. Cinnaire is continually reviewing activities, operations, and bottom-line results to ensure our investment strategies align with a heightened focus on addressing ESG considerations.