WNC Closes $228M National Tax Credit Fund
This investment vehicle already backed the construction and preservation of 26 affordable communities.
WNC & Associates has closed its Institutional Tax Credit Fund 57, raising $228 million. To date, the investment vehicle has funded 26 affordable properties—12 newly constructed and 14 preserved—comprising 1,908 units across 17 states.
The fund operates by investing in partnerships or limited liability companies that develop or rehabilitate income-restricted communities, purchasing their federal LIHTC and other tax credits. Developers receive equity, and in exchange, the investors offset applicable federal or state tax liabilities.
Its predecessor, Fund 56, closed last year with $302 million in commitments and marked the company’s then-largest multi-investor fund to date. The vehicle backed 24 communities encompassing 2,396 units throughout 16 states.
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WNC also focuses on regional affordable investments. Just last month, the company closed its California Series 22 Fund X, raising $119 million to address Southern California’s affordable housing challenges. That fund’s predecessor raised $120 million last year.
Since its inception in 1971, WNC has acquired roughly $18.2 billion in assets, including more than 1,800 properties. Last year alone, the company purchased north of $1.8 billion in affordable communities encompassing 5,100 units across 28 states.
The benefits of preserving income-restricted status
Preserving affordability serves a dual purpose. On the one hand, it extends the community’s attainability, and on the other hand, it can potentially renovate the property through capital improvements backed by federal tax credit equity.
One hurdle to overcome is the available grant volume, which may fall short of the required capital expenditure needed for maintenance and repairs, according to Paul Fiorilla, Yardi Matrix Director of Research.
This year, some 44,000 private LIHTC units—or 3.3 percent of stock—are on track to lose their affordability restrictions, according to a Yardi Matrix report. The figure includes apartments inside communities reaching the end of their initial compliance and extended use periods.
