Alliant Capital Closes $65M LIHTC Fund

Alliant Capital has closed Fund 103, a $65 million low-income housing tax credit fund. Fund 103 will support the development of approximately 650 units of affordable housing for seniors and families. While fundraising began well before the pandemic hit, the fund will focus on some of states that have been the hardest hit by the pubic health event, including Arizona, Texas, North Carolina and Florida.

“We do multiple funds every year, and we have multi-fund investors and we have proprietary single-investor funds,” Dudley Benoit, EVP at Alliant Capital, tells GlobeSt.com. “This was an investor we had done a proprietary fund with before, and it had already been well in the works by the time the pandemic hit. These funds, generally speaking, take months to put together. So the fund was not the result of the pandemic, but it just happened to coincide.”

While the four states targeted by the fund were selected prior to the pandemic, Benoit says that it isn’t surprising they are also the states hit the hardest by the pandemic and in the greatest need of affordable housing development. “What we do in the affordable housing space is countercyclical, meaning that whenever there is economic strife or difficultly, we know that homeownership rates decline and the need for affordable housing is even greater,” he explains.

Affordable housing demand is peaking in states across the country. “Nationally, there are issues getting affordable housing built to meet the demand,” says Benoit. “Our target markets are no different. With job loss, folks are in need more than ever. We know that this is going to have a large impact on how people are able to deal with their housing needs for months to come.”

Historically, affordable housing performs well during recessions, maintaining stable returns and occupancy. For that reason, Alliant has continued to see strong investor demand for its funds, despite the economic change. “I think long term, our industry is going to be fine, but at the end of the day, you still need people to pay rent,” says Benoit. “So, people need to have jobs, and their places of employment need to be operating. Most investors that had made a commitment prior to the pandemic, honored it. However, for new funds, investors are taking a wait-and-see approach or they are looking at the fund with a long recession in mind. The pandemic has changed the nature of due diligence for investors.”