FAQs

What is the Kansas City Equity Fund?

• The Kansas City Equity Fund, LLC (KCEF) was created in 2006 by the St. Louis Equity Fund, Inc. (SLEFI) to fill the growing need for a regional equity fund in the Kansas City metro area of Missouri and Kansas.
• The Kansas City Equity Funds now total approximately $7 million.
• KCEF has invested in three properties in the Kansas City, MO metro area.
• SLEFI staff assists KCEF by providing technical expertise in underwriting and asset management.
• Investors have the opportunity to provide key input to management including the approval of all investments made by the Fund.
• A KCEF Advisory Committee meets quarterly and each investor in the Funds is represented on this Committee.
• Investors in the Kansas City Equity Fund have representation on the SLEFI Board.
• Safety of the investment is a key consideration. Over SLEFI’s history, no investor has experienced an involuntary recapture of tax credits.

What is KCEF’s Organizational Focus?

• KCEF funds will enable corporations and financial institutions doing business in the Kansas City metro area to invest in affordable and historic tax credit-financed developments.
• KCEF will provide technical assistance to non-profit and for-profit developers in structuring and financing these developments.
• KCEF will manage the investments of the equity funds for the 15 year investment/compliance period of each property, thus insuring that sound investments remain sound.

How are Deals Structured?

• IRS allocates to Missouri approximately $11 million annually in federal Low Income Housing Tax Credit (LIHTC). These are awarded to developers on a competitive basis by the Missouri Housing Development Commission (MHDC). The sale of the credit provides equity to the developer for construction of the housing.
• The LIHTC is also available as a result of financing with Private Activity Bonds. The bonding authority is provided to developers by the Missouri Department of Economic Development and is subject to review by MHDC.

• Buildings that are historically significant may be eligible for federal and state Historic Tax Credit. Developers who adapt these buildings for affordable rental housing may use Historic Tax Credit as equity for the property, as well.
• Deals typically require additional equity, debt or other subsidy, which may take the form of:
  • Interest subsidies
  • Low-interest loans
  • Rental subsidies