NEC Acquires Homestead Capital

September 29, 2010
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National Equity Fund (NEF) has acquired Homestead Capital, an Oregon-based regional syndicator of low-income housing tax credits (LIHTCs).

NEF, in Chicago, is a national nonprofit LIHTC syndicator that has invested $7.5 billion in nearly 1,800 projects in 45 states, the District of Columbia, and Puerto Rico. It also is an affiliate of the Local Initiatives Support Corporation (LISC), the nation’s largest community development support organization.

Homestead Capital, based in Portland, has made $483 million in affordable housing investments across nine states. NEF will integrate Homestead into its existing operation, maintaining its Portland presence as part of NEF’s northwest acquisitions and asset management strategy, according to Joe Hagan, NEF president and ceo.

According to Tobias Washington, president of Homestead, the transaction was fueled, in part, by the recent economic turbulence, which has hit some state and regional syndicators hard. “The market downturn has made it increasingly difficult to raise equity and to make deals work,” he said. “We wanted to protect our investors and our assets—these are terrific projects that are adding significant value to their communities.”

In anticipation of the acquisition, NEF has been working closely with Homestead since the spring, and each of Homestead’s investors formalized its approval for the deal. Several Homestead staff members have joined the NEF staff, except for Washington, who will leave the organization but assist with the transition.