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#1432572 - 08/22/10 01:31 PM LIHTC - Equity Fund
donnac Offline
Platinum Poster
Joined: Feb 2003
Posts: 624
In the past, the bank directly purchased LIHTCs. We received investment credit for: (1) the amount purchased during the current exam cycle, and (2) the book value of LIHTCs purchased in prior exam cycles.

The bank is now considering investing in an equity fund that purchases LIHTCs so that we can diversify risk. I want to ensure we'll receive the same amount of CD investment credit going thru the fund as we did for directly purchasing the LIHTCs.

Are my following conclusions correct?

1. Bank will receive CD investment credit if the fund invests in LIHTCs in the assessment area. If there aren't any viable LIHTCs in the AA, and the fund invests in LIHTCs in the broader regional or state wide area, the bank will receive CD investment credit.

2. The bank will receive investment credit for: (1) the amount purchased during the current exam cycle, and (2) the book value of the LIHTC purchased in prior exam cycles.

Thanks.

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CRA
#1432702 - 08/23/10 04:11 PM Re: LIHTC - Equity Fund donnac
AnonRegulator Offline
Gold Star
AnonRegulator
Joined: Mar 2002
Posts: 451
Everywhere, USA
You have it correctly. The investment in the LIHTCs would receive the same consideration as your direct purchase of the credits. AR.

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#1432720 - 08/23/10 04:45 PM Re: LIHTC - Equity Fund AnonRegulator
donnac Offline
Platinum Poster
Joined: Feb 2003
Posts: 624
Thank you for confirming. This could be a big initiative for us, so I wanted to ensure I understood correctly.

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#1441846 - 09/13/10 01:50 PM Re: LIHTC - Equity Fund donnac
Karen Tucker Offline
Junior Member
Joined: Mar 2007
Posts: 39
Washington, DC
You may not receive equivalent qualitative credit. Q&A .12(h)-6 says in part: The institutionís assessment area(s) need not receive an immediate or direct benefit from the institutionís specific participation in the broader organization or activity, provided that the purpose, mandate, or function of the organization or activity includes serving geographies or individuals located within the institutionís assessment area(s).
and .12(h) - 7 says With larger regional areas, benefit to the institutionís assessment area(s) may be diffused and, thus, less responsive to assessment area needs.

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