summer 2005

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A Look Inside...

Investing in Low-Income Housing Tax Credits

How LIHTC Funds Can Help Banks Invest in Affordable Housing

LIHTC Internet Resources

LIHTC Investment Performance

NASLEF Contact Information

Side by Side Investing

Helpful Hints for First-Time Bank Investors in LIHTC

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This Just In... OCC's Districts Report on New Investment Opportunities for Banks
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Investment Resources for Part 24 Authority

Part 24 Resources on the Web

Common Part 24 Questions

CD Investment Precedent Letters

Investments in National/Regional Funds

Fourth Quarter 2005
Part 24 Investments

Regulation and CD-1 Form

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OCC's Community Affairs Department

(202) 874-5556


Articles by non-OCC authors represent their own views and are not necessarily the views of the OCC.

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Why Side-by-Side Investing?

Side-by-side investing, in which a portion of the investing dollars come from a low-income housing tax credit fund and a portion from an individual bank, allows a bank to play a larger role in an investment and to target investment funds within a precise geography. This can be of value to a bank looking to maximize its CRA efforts. The bank investor benefits include:

  • The fund usually provides due diligence materials, in the form of an underwriting package, that a banker can take to a committee for review. This can be a significant time and cost saver for a bank that is inexperienced in underwriting these investments.
  • The fund provides administrative oversight for the investment.
  • The bank gets additional CRA consideration than it would with only an investment in the fund because the side-by-side investment is targeted to the bank's footprint. Because the CRA regulation has specific geographic requirements, banks must be able to demonstrate that their investments in funds actually benefit, or have the potential to benefit, their assessment areas. Statewide investments with the potential to benefit a bank's assessment would provide less qualitative CRA consideration than would an investment that directly benefits the assessment area.
  • The bank has the advantage of investing with an experienced CD investing partner, the fund.

Side by Side Investment graph