Introduction

Northern New England Housing Investment Fund (NNEHIF) is a private, nonprofit 501(c)(3) corporation providing equity capital and technical assistance to affordable housing developers in Maine and New Hampshire. In the mid-1990s, the New Hampshire and Maine housing finance authorities created NNEHIF as a vehicle to attract private capital for low income housing tax credit developments. In its first year, the Fund raised $27 million in equity, resulting in 455 units of affordable housing. Today, NHEHIF has raised and invested more than $250 million in approximately 2,800 units of affordable housing. To achieve its goals, NNEHIF collaborates with numerous partners, including investors, developers, community nonprofits, and state housing finance agencies. Success requires balancing both financial and social return on capital.

During the past several years the external environment in which NNEHIF operates has changed. Historically, NNEHIF was the principal financial intermediary for low income housing tax credits in Maine and New Hampshire. In recent years, competition for this market has increased. However, as the following examples illustrate, competition is not the only challenge. While consolidation of the banking industry and the rise of national banks creates new opportunities and pressures for investors, it also poses potential threats for NNEHIF. Public funding for affordable housing is declining while demand and costs continue to rise. Changes in federal or state policies (such as tax policy or housing priorities) also may have profound implications for NNEHIF. Finally, developers and operators are confronting emerging regulations and populations that introduce new complexities and relationships.

This changing and complex environment has created a sense of urgency to develop a strategic framework to guide NNEHIF efforts. The purpose of the strategic plan is to:

  • respond to emerging opportunities and challenges
  • engage the full capacity of Board member expertise
  • ensure that staff have optimal support to achieve goals

The Low Income Housing Tax Credit (LIHTC) program offers a financial incentive to construct, rehabilitate and operate rental housing for low-income tenants. Tax credits offer a dollar for dollar reduction in the investor’s federal income tax liability. Originally created by the Tax Reform Act of 1986 as a temporary provision of the Internal Revenue Code, Congress permanently extended the program in the Omnibus Budget Reconciliation Act of 1999. The Internal Revenue Service and state housing finance authorities administer the program.