National Institutional Investments
Since 1992, Boston Capital has been sponsoring multi-investor low income housing tax credit funds for institutional investors, who have invested in more than $12 billion of equity. These investment funds allow the corporate investor to benefit from the reduced risk provided by national diversification of properties, developers and unique real estate markets.
The typical Fund profile exhibits the following attributes
- $100 – $250 million Fund size
- 20 – 45 properties
- Diversification over 10 – 20 states
- Partnering with 20 – 30 developers
The Corporate Tax Credit Fund offers
- A predictable benefit stream comprised of tax credits and passive tax losses
- Enhanced GAAP earnings effect from federal tax credits
- Excellent risk-adjusted returns; LIHTC investments have shown the lowest default rate against all other real estate classes
- Community Reinvestment Act (CRA) credit for investors
- A Socially responsible investment which can be used as a direct reduction against AMT (Alternative Minimum Tax)
The process
- Federal tax credits are allocated to each state’s respective housing agency, which in turn award the credits to individual partnerships.
- The funds provide equity investment to each of the properties after an extensive due diligence and underwriting process.
- Once closed into a fund and leased to qualified tenants, the tax credits flow to the investors through a partnership structure.
- Boston Capital’s experienced Asset Management Department then continues to monitor the portfolios through the compliance period.