Mountain Plains Equity Group (MPEG) plays an active role in the development of affordable housing projects by providing equity investment capital and other key resources to project developers in a multi-state area. MPEG has the infrastructure, technical expertise, and equity capital necessary to partner with developers to finance quality affordable housing.

Target Market: Low-Income Residents

Known as the Low Income Housing Tax Credit (LIHTC), this program is designed to serve the needs of low-income residents. Low-income tenants are defined as those tenants having an annual income of no more than 60% of the Area Median Income (AMI). Only tenants falling within these defined limitations are considered “eligible” tenants. Accordingly, it is important to assess the need and demand for a project, as well as the manner in which the proposed project will benefit the community.

Tax Credits = Cash

Under Section 42 of the Internal Revenue Code, the federal government provides an income tax credit as an incentive (and financial tool) for developers to construct, own and operate affordable housing projects. Tax credits are awarded to qualified and eligible projects as a result of an application process. That is, developers must complete a Qualified Allocation Plan (QAP) and apply to the state housing agency for tax credits (this is generally a competitive process).

If the developer/applicant is successful in earning tax credits for the project, these tax credits become a tool to help finance the costs of the project. In brief, the tax credits can be transferred or “sold” to an investor in exchange for equity capital.

MPEG is just such an investor. We serve as a source of this equity investment capital, making the cash available to developers and community organizations to help finance the overall costs of the LIHTC project.

Project Types

The LIHTC incentive is a “rental” program only; the goal of home ownership is not addressed in this particular program. Nevertheless, in terms of project types, the LIHTC program can be used for any number of project types:

  • Single-family dwellings
  • Multi-family housing
  • Retirement and Senior Citizen housing
  • Assisted Living facilities

This tax credit program can be used for new projects (new construction), or for the acquisition and rehabilitation of existing buildings. In order to receive and utilize tax credit financing, an owner and developer of such a project must be willing to dedicate the facility to the needs of low-income residents for a minimum of 15 years.

Project Size

MPEG does not have a “minimum size” requirement and it is willing to consider projects of all sizes, whether large or small. In fact, MPEG provides assurance that each project will be fairly evaluated, judged on its merits and given every opportunity for success – regardless of size.

We recognize that a small project of 8-10 units can often have a very positive impact in a small community. Likewise, relative to the size of the community, we recognize the benefits and economies of scale inherent in large-size projects. MPEG works hard to understand the needs of the communities and the marketplace.

Please contact MPEG directly for more specific information about project characteristics and the evaluation process. We welcome the opportunity to learn more about your project – and we look forward to being your partner in the development of affordable housing.