WNC Closes $90M LIHTC Fund

WNC has closed its latest LIHTC Fund with $90 million in equity investments. WNC Institutional Tax Credit Fund 10 California Series 18 LP will provide institutional low-income housing tax credits for the development of 900 affordable housing units in California. Seven investors participated in the fund, including a new investor. This recent fund brings the firm’s total equity raise to $5.5 billion for the investment and development of affordable housing.

“Originally, the fund was launched with a target raise of $85 million, but WNC was able to close the fund with $90 million in equity raise—signaling that demand was slightly higher than expected,” Christine Cormier, SVP of investor relations at WNC, tells GlobeSt.com. “Regarding impact from COVID-19, investors were focused on any potential delays that we may encounter as a result of the pandemic.”

The fund will develop and renovate units for five properties located in Los Angeles, Riverside, Sacramento and San Diego. These deals were in place prior to the onset of the pandemic and subsequent market dislocation. “The fund includes five properties that were under contract prior to the pandemic,” says Cormier. “The real change in strategy occurred in our underwriting of the properties and additional sensitivities that were run assuming any potential delays that may be encountered.”

In fact, the LIHTEC market is expected to perform well through the downturn, as it has in prior recessions. “The LIHTC market is a very resilient asset class, as was proven throughout the 2008 recession and in the post-impact of tax reform,” says Cormier. “We believe our tenants appreciate the quality affordable housing they have. As we monitored April and May rent collections, it was apparent that the tenants are making their rent payments a priority.”

WNC is committed to continuing to build its affordable housing platform and growing the supply of affordably priced housing in California. As such, the firm has no intention of altering its strategy. “There is still a critical shortage of quality affordable housing,” says Cormier. “As such, we expect to continue our current business plans of acquiring quality new construction as well as rehabilitations of existing affordable housing throughout the US.”