SAN FRANCISCO--(EON: Enhanced Online News)--Wells Fargo & Company (NYSE: WFC) has been named the largest investor in affordable multifamily housing in the U.S., according to research conducted by accounting firm, Cohn Reznick. With increasing demand for affordable rental options across the nation, Wells Fargo is helping to bridge the affordability gap as the number one investor in Low Income Housing Tax Credits for affordable multifamily housing in the U.S., with $9 billion in investments over the last five years.
“There is a significant affordable housing crisis impacting the country right now,” said Mark Myers, head of Wells Fargo Commercial Real Estate. “Demand for affordable rental housing continues to be extremely high with many people paying a disproportionate percentage of their income on rent. As the largest commercial real estate lender in the country, being able to help meet the need for more affordable living options for our customers and communities is a top priority for Wells Fargo.”
Wells Fargo contributes debt and equity to support affordable multifamily housing and has financed more than 180,000 units of affordable housing over the last five years.
The Urban Institute estimates that for every 100 “extremely low-income” renter households (those with incomes at or below 30 percent of the area median), there are just 29 affordable units available in the marketplace, translating into a total shortfall of more than eight million units.
New York City is just one example of cities across the country struggling to provide enough affordable housing for low- and moderate-income residents.
“In New York, we have more people who want to live here than we have housing,” said Rafael Cestero, president and CEO of Community Preservation Corporation (CPC), a non-profit affordable housing lender in NYC. “This creates a supply and demand issue that’s driving rents higher and creating an exasperated need for affordable housing. Without Wells Fargo’s commitment to working with local government and investing in organizations like CPC, New York would be a different place and there would be fewer opportunities for low- and middle-income families to have affordable living options in the city.”
Wells Fargo has been investing in tax credits for more than 15 years and is one of the few banks active in both direct and fund equity investments, which increases the amount of capital used to build affordable housing for individuals and families. Federal housing tax credits are awarded to developers of qualified projects. Developers then sell these credits to investors like Wells Fargo to raise capital for their projects, which reduces the debt the developer would otherwise have to borrow, enabling the developer to charge reduced rents.
In addition to tax credit investments, Wells Fargo is an active lender to the affordable housing sector. Since 2014, Wells Fargo has lent $9.6 billion for affordable housing properties by providing short-term construction, bridge and permanent financing for affordable multifamily properties using its balance sheet as well as the Federal Housing Administration (FHA), and Fannie Mae and Freddie Mac programs. Wells Fargo works closely with experienced multifamily market-rate and affordable housing developers and investors, as well as mission-oriented for-profits and not-for-profits and Community Development Financial Institutions (CDFIs) that are focused on affordable housing and economic development.
Wells Fargo supports the development and preservation of affordable housing, including both multifamily and single-family housing, in numerous ways including tax credit investments, commercial lending, foundation grants, mortgages, and bank team member volunteer time. Since 2012, Wells Fargo has contributed $25 billion in loans, investments and grants for multifamily affordable housing (Community Reinvestment Act data). In addition, Wells Fargo Home Mortgage (WFHM) is the No. 1 originator of home loans to residents of low- and moderate-income neighborhoods. WFHM’s loan originations in low- and moderate-income neighborhoods totaled nearly $15 billion, or 46,401 loans.
Details of select Wells Fargo affordable housing developments are available on Wells Fargo Stories.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.9 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 countries and territories to support customers who conduct business in the global economy. With approximately 269,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.