National Equity Fund, Inc. National Equity Fund, Inc.

Extraordinary things happen when you have great partners
Since 1987, National Equity Fund® has invested more than $13 billion revitalizing neighborhoods,
fostering economic growth and creating affordable sustainable housing.

Project Investment Terms

Our mission is to support local revitalization efforts by providing equity investments, technical assistance and predevelopment grants and loans to low-income housing developers. Through our parent, Local Initiatives Support Corporation (LISC), developers can also access additional funding for capacity building, construction, predevelopment needs and permanent financing.

Developer/General Partner

NEF, Inc. partners with both non-profit and for-profit developers. We encourage joint ventures between for-profit and non-profit partners, particularly when one of the partners is an inexperienced, first-time developer of tax-credit projects.

Project Type

NEF, Inc. invests equity in projects that have:

  • Low-Income Housing Tax Credits (9% and 4%)
  • Historic Tax Credits (combined with LIHTCs)
  • State Tax Credits (project-by-project basis)

NEF, Inc. invests in a full range of project types, including:

  • Multifamily and Single-family Designs
  • New Construction and Rehabilitation
  • Preservation Projects
  • Public Housing
  • Supportive Housing
  • Mixed-income Projects
  • Assisted Living (on a limited basis)

NEF, Inc. operates in all types of communities, though our traditional focus has been on urban and rural developments that meet the needs of underserved areas. These are often very complex projects with multi-layered financing structures. NEF, Inc.'s staff can assist a developer in creating the most advantageous financing structure, whether the project is a simple deal with four financing sources or a 10-layer arrangement. Moreover, NEF, Inc has a supportive housing staff with in-depth knowledge of developing SRO housing, senior housing with services and housing for the disabled, mentally ill or people with AIDS.

Deal Terms

NEF, Inc. targets the following underwriting and due diligence criteria for projects in which it invests. Variations from these assumptions will be based on evidence of market and other conditions.

Project Structure

  • All financing committed at the time of the NEF, Inc. investment.
  • A nonrecourse first mortgage with a fixed rate and a minimum 15 year term.
  • Rehabilitation scope of work sufficient to provide a viable development for the full 15-year tax-credit period.
  • A contingency of 5 percent to 10 percent of construction costs, depending on the type of construction.
  • Replacement and operating reserves that are appropriate for renter type, construction,location and developer financial capacity.

Project Operations

  • Expense inflation projected over the life of the project at 1 percent higher than rent inflation.
  • Vacancy rate of 7 percent or other appropriate rate based on market conditions.
  • A "compliance cushion" between gross rents and maximum allowable tax credit rent.
  • Project rents that are sufficiently below market rents.
  • Debt service coverage of at least 1.15.

Due Diligence

  • Demonstrated ability and experience of team members (i.e., developer, construction contractor, property manager, accountant, project attorney and consultant, if applicable. The management company should have prior low-income housing tax credit experience and be adept at compliance.
  • Resumes and financial statements of developer and all team members.
  • A NEF-commissioned market study that supports rent, expense and lease-up assumptions used in the 15-year cash flow.
  • An environmental report that clearly delineates environmental issues, if any.
  • Copies of all loan commitments and tax-credit documents.

Key Contacts


For assistance with development questions of NEF properties:

See Staff Directory