The Minnesota Equity Fund (MEF) is designed to help socially motivated corporations and banks invest in affordable housing and community development in Minnesota and beyond.
MEF raises capital from corporations and financial institutions and invests these resources into real estate development partnerships, with the goal of providing investors with a sound investment that will produce positive social and economic outcomes for families and communities throughout Minnesota.
The Goals of the Minnesota Equity Fund
- Improve access to equity for developers, improve pricing, and conserve public and charitable subsidies
- Create a more robust tax credit investor market
- Build on past relationships with funders, agencies, corporations and lenders, and leverage GMHF financial strength to secure private equity investments
- Offer Minnesota corporations the opportunity to invest in local community development
- Provide competitive economic returns plus the social return of housing working families in well designed, green, energy-efficient and healthy housing
- Better address local affordable housing production and preservation goals
Projected Market Share
The Minnesota Equity Fund seeks to serve a modest portion of the total Low-Income Housing Tax Credit investor market in Minnesota.
Each year, over $125 million in tax credit equity is syndicated.
Additional details on the market include:
- Market share anticipated to raise up to $25 million in equity every 18-24 months
- Estimated niche for the Minnesota Equity Fund is 10-15% of the total annual tax credits awarded in Minnesota
- Equity is pledged to developments over two annual state funding cycles
- Investments will be made in 5-10 developments of 24-60 units each cycle
