CEO Message & Recent Happenings
MHEG & MHDF Updates
New Normal, New Faces, But Same MHEG John Wiechmann, CEO
MHEG is Expanding! Pat Michaelis, VP Business Development
Greetings Friends! I hope this newsletter finds each of you doing well. Hard to believe the first quarter of 2022 is almost over! Two years ago, the world changed and our ‘normal’ changed. MHEG closed its physical offices and staff began working remotely from home. As we settle into 2022, we are determining just what our new ‘normal’ is. For MHEG, this means our physical offices are open, but our staff have the flexibility to work at home or the office (or anywhere else where they can get the job done!). Our commitment to our investor and developer partners remains the same, regardless of where our team logs-in. Our success in 2021 confirms that commitment. MHEG had a record year raising $315 million in new equity and closing investments in 39 new developments, helping finance over 1,800 units of quality affordable housing. Together with you, 36 new developments reached construction completion, creating over 1,600 safe, decent and affordable units for even more individuals and families. We are excited for even greater things in 2022. As mentioned later in the newsletter, we’re expanding into new states and are excited to bring our mission to new communities and serve even more residents. We’ve also added several new members to our team to accommodate the growth. We look forward to you meeting them in person throughout the year at our annual state dinners.
All the best, John Wiechmann John Wiechmann along with Fred Hoppe and other partners at the Gatehouse Rows groundbreaking ceremony in Lincoln, Nebraska. September 2021
Recent Happenings... Vandeman, Swanson, Powers & Wieck Retire
MHEG’s mission is to “Change lives for a better tomorrow by helping create safe, quality, affordable housing.” To grow the mission, MHEG must secure additional investors to increase capacity. Both require syndicating additional LIHTC developments. Thus, we are expanding. Within MHEG’s current footprint, $91 million 9% LIHTC credits will be allocated in 2022. The allocation pool grows to $213.4 million with the addition of our new states. Clearly, significantly increasing development opportunity for MHEG and partners.
With 59% of our developments being rural in nature, we appreciate our community banks providing their local perspective on a wide range of issues from demographics, location, and economic viability. Our investor partners have long enjoyed the benefits of having deals in their backyard to help make their communities better and to provide banking opportunities. Our investors are generally driven by economic returns. Our Funds are charactered as low risk and low-levered (typically 25% or less), consist of mostly new construction developments, spread between rural and urban locations with a diverse mix of counterparties. We conservatively underwrite both rents and expenses. The result is that we have never experienced a foreclosure or any recapture of tax credits. In addition, our portfolio generally outperforms industry benchmarks. This conservative underwriting and strong portfolio performance help explain our success in raising more and more capital each year. COVID really brought home the need for quality, affordable housing to the public, but our investor partners have led the charge in helping us provide housing to families, seniors, and veterans for almost 30 years. I do hope to meet all of you in person this year, as time allows. If you or your peers need CRA assistance, please let me know. I value your continued partnership and appreciate the trust you have placed in us!
NE Creates More Affordable Housing With Bond Deals Ryan Harris, Director of Acquisitions In 2021, Nebraska Investment Finance Authority (NIFA) updated their Qualified Allocation Plan allowing tax-exempt bond deals to receive an allocation of State LIHTCs equal to the Victory Park View in Lincoln, Nebraska amount of Federal LIHTCs. NIFA approved three bond deals with State LIHTCs in 2021, which had a combined bond allocation of $29 million and will receive over $2.3 million of annual Federal and State LIHTCs. This additional resource was leveraged to generate 262 units of affordable housing among three deals and generate nearly $60 million of development in the State.
Shellie Vandeman has been with MHEG for 20 years and has been an invaluable asset to our company. Although she worked in the Compliance Department, Shellie took the time to know everyone at MHEG and always had a smile on her face. Her final day was January 6th, 2022. Deb Swanson has been with MHEG over 14 years. She has been a vital member of our Acquisitions team, but also a friendly face to all departments. She worked with many of our partners as we closed deals. Her last day was January 7th, 2022.
We understand we are not the only ones thinking growth. Due to limited allocations in each state, expansion is on the minds of many. We value and appreciate the relationships we have established. If you are considering expanding into New Mexico, Arizona, Nevada, Utah, Wyoming, Montana, and Texas, we welcome the opportunity to explore the possibility as your partner.
This year I’ve been charged with leading the process of raising capital from small and mid-size institutional investors throughout our now seventeen-state footprint. Since inception, MHEG has partnered and fostered investment with our local and regional community banks to further our mission of providing quality, affordable housing for low-income households while assisting banks with their CRA goals.
Now expanding into New Mexico, Arizona, Nevada, Utah, Wyoming, Montana, and all of Texas
This first quarter of 2022 was bittersweet with the retirement of four long-time employees. Shellie Vandeman, Deb Swanson, Shannon Powers and Cindy Wieck said their farewells to MHEG and started new chapters in their lives. Each of these ladies will be greatly missed; their knowledge, expertise and dedication to MHEG were evident in the many years of service to the company.
Left to Right: Shannon Powers, Deb Swanson and Cindy Wieck
Shannon Powers has been with MHEG over 20 years. She was the beginning of our due diligence department and implemented many of the protocols we still use today. Her last day was January 14th, 2022. Cindy Wieck has been with MHEG over 8 years. She has been the welcoming face to MHEG for many years now and has assisted everyone with a variety of tasks. She’s taken the time to get to know each staff member and truly made an effort to make things easier for everyone. Her final day was February 4th, 2022. MHEG in a Minute l P1
MHEG is expanding its geographic footprint into New Mexico, Arizona, Nevada, Utah, Wyoming, Montana, and all of Texas. If you are considering developing in these states, here’s what is happening at MHEG.
MHEG has a history of growing and expanding our footprint and the people we serve. Originally established in Nebraska in 1993, MHEG added Kansas, Iowa, and Oklahoma between 2001 and 2005. We expanded again in 2013 into South Dakota, Minnesota, Missouri, Arkansas, Colorado, and Northern Texas. MHEG spent the last year making initial contacts and performing due diligence with plans to begin syndication in 2022 in our new footprint.
Thank you again to all of our volunteers, investors, developers, general partners, property managers, financing partners and government officials for making 2021 such a great year. Thank you for lettings us be a part of your organization. If there is anything that anyone at MHEG can do to help you reach your goals, please don’t hesitate to let me know. We may have a new normal, with new faces and new states, but we’re still the same MHEG looking to change lives for a better tomorrow.
Community Bank Investments Andrea Frymire, VP Community Investments
Gatehouse Rows is a 98-unit family deal by Hoppe & Son in Lincoln. Total development costs are just under $20 million. The fourth phase of Highlander – a partnership between Seventy-Five North and Brinshore Development – is a 70-unit addition to the campus in Omaha and will provide both apartments and townhomes to qualified families. Development costs are just under $27 million. Victory Park View is the latest addition to the Victory Campus in Lincoln, developed by Burlington Capital. The project consists of rehabbing two existing buildings, totaling 94 family units with a preference to housing veterans. Total costs are over $12 million. These deals will help serve part of the increasing need for affordable housing in the state of Nebraska and were made possible by NIFA’s efforts to include the State LIHTC program on tax-exempt bond deals. NIFA has also increased their Federal/State bond allocation for 2022 up to $35 million, furthering their commitment to utilize the State LIHTC resource to create affordable housing. Keeping you up to date on MHEG in just a minute’s time. l Spring 2022
