Merchants Capital has closed two tax credit equity funds totaling more than $233.4 million to help create or revitalize affordable housing in 12 states, including the lender’s first national multi-investor fund with a total capital raise of $172.5 million from 16 institutional investors.
Merchants Capital Tax Equity Fund V LP, which has investments from banks and insurance companies, will infuse equity into 18 affordable housing properties that will create or preserve more than 1,958 affordable homes in 11 states.
Merchants Capital SW Tax Credit Equity Fund III LP, is a $60.9 million proprietary fund with a Fortune 500 company that will provide equity capital into eight affordable housing projects structured with Low-Income Housing and Historic Rehabilitation Tax Credits in three states. The investment in Merchants III will create 593 affordable homes in three states and revitalize historically significant housing properties in San Antonio, Texas, and Kansas City, Mo.
The properties in the two funds are located in Indiana, Minnesota, North Carolina, Ohio, South Carolina, Michigan, Texas, Kentucky, Tennessee, Wisconsin, Missouri and California.
Julie Sharp, senior vice president of tax credit equity at Merchants Capital, said in a prepared statement the successful closing of Merchants Fund V and III with more than $233.4 million in capital raised from 17 investors is a milestone achievement for the firm’s affordable housing equity platform. Sharp said Merchants Capital, which has raised more than $22 billion in capital provided to multifamily housing since its inception, has emerged as a leading debt and equity provider for affordable housing across the United States.
Linda Hill, senior vice president of tax credit equity at Merchants Capital, pointed to the developer and investors partners and noted the successful closing of the two funds is a testament to the strength of the lender’s relationships and platform.
Merchants Fund V, the national multi-investor fund, was designed to make a large social impact. The fund is structured with a first-of-its-kind Social Impact Reserve that is projected to deploy nearly $500,000 in capital to support tenants over the life of the fund. The developer sponsors include some of the largest affordable housing owner/operators in the nation. Names were not released.