FINANCE importance of those transactions to their agency partners. The result has been an expansion of lenders looking to do affordable housing deals. That said, many of the originators and under-writers doing those transactions don’t have the level of experience that our team does in the af-fordable housing space. Many of my colleagues at Lument have 20 years of experience in af-fordable housing, and they remember the days when tax credit pricing was more like 60 cents, and a 7 percent interest rate was considered re-ally good. Because we have been in the industry for such a long time, we have seen and over-come most of the issues that arise in affordable housing transactions. Bravo: Historically, commercial banks have played a large part in supporting affordable housing. As fi nancial institutions have merged, the number of regional banks able to lend and invest in affordable housing has decreased. As an investment fund with a national footprint, ATAX is able fi ll geographic gaps created by bank consolidations. Melton: There is signifi cantly more lenders and capital available for affordable housing compared with fi ve years ago. A driving factor for that trend is the following: (1) expansion of what is deemed to be affordable to include 60 to 120 percent of AMI; (2) the historic positive performance of affordable communities as re-fl ected by default ratios at less than half a per-cent; (3) more mission-minded capital entering the investment space seeking to not only create returns, but also to impact communities. Musial: There has been some consolidation of lenders and fi nancial intermediaries in the last fi ve years, and the factors driving lenders and fi nancial intermediaries’ decisions to lend and/ or invest in affordable housing varies by institu-tion, fi nancial gain and/or impact. Overlaying this is the fact that affordable housing development pipelines can vary by geography from year to year, and are impacted by a host of factors, such as the ability to secure property for development, the collective fi nanc-ing commitments of your capital stack, land entitlements and building approvals/permits. In other words, competition to provide fi nanc-ing to affordable housing development ebbs and fl ows, as does the opportunities to do so. Our Community Finance team’s primary goals in fi nancing affordable housing are community impact and improving the socioeconomic well-being of the residents that live within our com-munities. Our commitment to remain a compet-itive and active fi nancier of affordable housing has been steadfast since we entered the industry in the 2000s. Lott: New capital to the affordable housing space is coming in at a fast pace relative to where we were fi ve years ago. This capital in-cludes both debt and equity from institutional capital, debt funds, life companies and foreign banks all leaning in to invest in the space due to the lower perceived risk for the required yield (as evidenced by the sector’s resilience during the pandemic). In addition to those investors looking for ex-cess returns relative to the risk, a large fl ood of ESG (environmental, social and corporate governance)-focused money is fl owing in to try to stem the lack of quality affordable and work-force housing available throughout the country. This is creating large opportunities for owners and developers to utilize creative new options to favorably fi nance new developments and re-capitalize existing assets and portfolios. 28 | Western Affordable Housing Business | May/June 2021 www.REBusinessOnline.com