By Rose Oswald Poels
This year, Wisconsin Bankers Association welcomed Cinnaire as a new Gold Associate Member. With this expanded relationship, Cinnaire is launching a $10 million Low Income Housing Tax Credit (LIHTC) equity fund that will support the financing of the new construction or rehabilitation of affordable housing in communities across Wisconsin. The fund is open to all C corporations in the state and will close by the end of Q1 2022. Cinnaire’s Pam Hetz and Chris Jillings will be visiting with WBA members at this week’s WBA Bank Executives Conference in Wisconsin Dells.
Cinnaire has already demonstrated success in similar arrangements with the Michigan Bankers Association and the Indiana Bankers Association, and we are excited to bring this opportunity to banks in our state. Cinnaire has office locations in Milwaukee and Madison, and their Wisconsin team includes 14 staff members who 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.
There are many reasons why banks would choose to get involved with tax credit investing. Expanding access to high-quality, affordable housing is a key driver of economic mobility and family stability — getting involved demonstrates the bank’s commitment to their community’s wellbeing. In addition to helping their communities prosper, the investment can generate positive Community Reinvestment Act (CRA) consideration from regulators. Another 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.
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.
A full press release on this opportunity is available on Cinnaire’s website. If you would like to learn more about the 2022 Wisconsin Community Fund, please contact Daryll Lund, WBA EVP and chief of staff, or contact Pam Hetz, Cinnaire senior vice president, business funding.