Definitions

Smarth Growth Fund
A smart growth fund, a majority of whose investments qualify for the Community Reinvestment Act credit to regulated banks, fulfills the socially responsible investment objectives of institutional investors. A smart growth fund has three main goals: to enhance existing communities, to preserve natural resources and to save taxpayers the cost of new infrastructure resulting from sprawl. These strategic investments seek to take advantage of properties that require repositioning via development, renovation, leasing upgrades, resolution of environmental issues or by other means which may significantly increase market value and economic activity in low- to moderate-income neighborhoods.

Tax Fund
The basic premise of the federal tax credit program is simple; investors receive dollar-for-dollar credits against their federal income taxes in return for providing much-needed equity financing for affordable housing properties.

Federal tax credits are allocated by each state's housing agency to developers of affordable housing based on the cost of the property less land and non-eligible expenses. The property generates tax credits once construction is completed and it is occupied by the required number of qualifying tenants (generally 12-18 months after construction begins). At this point, the property generates a steady stream of tax credits for the next 10 years, as long as it continues to rent to qualified tenants. Investors must meet suitability requirements as established by their respective states, which can be found in a partnership's prospectus.

The goal of the program is to reduce the development cost of affordable housing by capitalizing on the strong demand for tax benefits by U.S. Corporations. Since its inception, the housing credit has gained the acceptance of state government authorities and affordable housing has become the largest segment of the multi-family housing market.

In order to qualify for housing credits, a property must meet certain government guidelines relating to, among other things, rent levels and tenant income eligibility. To avoid recapture of the housing credits, these guidelines must be maintained for a minimum period of 15 years.

Workforce Housing
For-sale and rental housing serving the market segment of wage earners at 80% - 200% of median income.