National Equity Fund, Inc.10 S. Riverside Plaza

Suite 1700Chicago, IL 60606

Tel: (312) 360-0400

impactingLIVES

creatingCOLLABORATION

fostering RELATIONSHIPS

effecting CHANGE

Annual Report

2014

impactingLIVES

fostering RELATIONSHIPS

creatingCOLLABORATION

effecting CHANGE

We’re on the path to making a difference

in our communities across the nation.

click on the 4 videos to learn how

pg.3National Equity Fund, Inc. – 2014 Annual Report

Year in Review

Looking back, we did very well in 2014, placing $663 million in equity landing us third in the top five syndicators by volume and succeeding our goal of $650 million. We closed 75 deals, creating 5,177 units of affordable housing, many of which will be home to veterans as well as numerous special needs populations.

We also achieved some significant benchmarks, reorganizing our originations and project management departments, moving our headquarters into new space, creating two new multi-investor regional funds and establishing additional investor relationships. All of which promotes our efficiencies, strengthens our partnerships and enables us to provide our clients with what fits their needs best.

Our veterans’ housing initiative, Bring them HOMES, successfully brought in additional grants in 2014 from funders, Citi Community Development, MetLife Foundation, Home Depot Foundation, Northrup Grumman and Chase enabling us to add 1,215 more residences with supportive services to our pipeline. And 2015 is looking strong as we’ve demonstrated over the last several years that we know how to finance these developments as well as how to advocate for veterans’ housing policies.

In May of 2015, Secretary of the Veterans’ Administration, John MacDonald presided over a tour of our most recent veterans’ development, Blue Butterfly Village, 73 fully-furnished two-bedroom townhomes in the South Bay portion of Los Angeles, which are now home to female veterans with families who were homeless or at-risk of becoming homeless. This is our second community devoted to female veterans in need of affordable housing and critical supportive services.

While tax credit transactions are high in 2015, we feel that we’re in a strong position and that we’re on track to helping our partners achieve their goals as well. Take a look at our brief videos to hear more about what’s happening at National Equity Fund.

Joseph S. HaganPresident and CEO

Joe HaganPresident

Message from our President

pg.4National Equity Fund, Inc. – 2014 Annual Report

NEF Board of Directors

Larry DaleChairmanRetired Managing DirectorCitigroup

Michael RubingerVice ChairmanPresident & CEOLocal Initiatives Support Corporation

Andrew DittonManaging DirectorCiti Community Capital

Helen DunlapIndependent Housing Consultant

Eldridge EdgecombeRetired SVPFederal Home Loan Bank of Chicago

Printice L. GaryManaging PartnerCarleton Residential Properties

Joseph HaganPresident & CEONational Equity Fund, Inc.

Michael HearneCFOLocal Initiatives Support Corporation

John LindellRetired Partner KPMG, LLP

Mike MantleSenior AdvisorMorgan Stanley

Michael MayManaging Director CCRE Cantor Fitzgerald

John MealeyExecutive DirectorCoachella Valley Housing Coalition

Herbert E. MorseRetired Managing PartnerKPMG LLP

Elizabeth PughRetired Executive Vice President/CFOLocal Initiatives Support Corporation

Edward SiglerSenior Vice PresidentChase Community Development

Sindy SpivakSenior Vice PresidentBank of America

Kristen L. SwitzerHead of Asset ManagementU.S. Bancorp Community Development Corporation

Our Board

Larry DaleChairman

Michael RubingerVice Chairman

pg.5National Equity Fund, Inc. – 2014 Annual Report

Assets

Liabilities and Net Assets

Financials

2014 Balance SheetNational Equity Fund, Inc. and SubsidiariesSpecial Purpose Consolidated Statements of Activities and Changes in Net AssetsYears Ended December 31, 2014 and 2013

Cash and Cash Equivalents Restricted Cash Escrow Notes and Other Receivables, Net Notes and Other Receivables from Affiliates, Net Due from Funds, Net Temporary Investments in Project Partnerships, Net Other AssetsFurniture, Equipment, Leasehold Improvements and Software Less: Accumulated Depreciation and Amortization

Total Assets

Accounts Payable and Accrued Expenses Due to AffiliatesService Fee PayableGrant Payable to Parent Notes PayableCapital Contributions Due to Temporary Investments in Project Partnerships and FundsDeferred Revenue

Total Liabilities

Commitments and ContingenciesTotal Net Assets - Unrestricted Total Net Assets - Temporarily RestrictedTotal Net Assets

Total Liabilities and Net Assets

These financial statements account for NEF, Inc.’s general partner and managing member interests in limited partnerships and limited liability companies using the equity method of accounting rather than the consolidation method as required by Generally Accepted Accounting Principles (GAAP). In addition, the recording of pass-through income or losses from investments in limited partnerships or limited liability companies and their investees in which NEF has general partnership or managing member interests is limited to NEF’s percentage interest in the limited partnerships or limited liability companies and their investees.

GAAP financial statements are available by contacting Alex Denja, CFO at adenja@nefinc.org.

55,482,423544,188

56,026,611

$103,989,180

56,667,364 1,027,341

57,694,705

$123,186,620

$4,798,719135,293

1,375,000500,000346,666

37,315,4933,491,398

47,962,569

$9,810,242 137,950 90,000

1,000,000 2,260,805

48,100,889 4,092,029

65,491,915

$42,478,750 544,188

1,219,814 9,502,503 5,263,358

43,601,753 1,186,786

2,847,656

(2,655,628)

$103,989,180

$44,327,113 1,027,341 3,791,694 7,951,751 6,503,785

55,031,742 1,107,469

6,315,022

(2,869,297)

$123,186,620

2014 2013

pg.6National Equity Fund, Inc. – 2014 Annual Report

Revenues

Expenses

Financials

2014 Income StatementNational Equity Fund, Inc. and SubsidiariesSpecial Purpose Consolidated Statements of Activities and Changes in Net AssetsYears Ended December 31, 2014 and 2013

2014 2013

Syndication Fee IncomeAsset Management Fee IncomeInterest IncomeNew Markets Support Company Cost ReimbursementMiscellaneous Income

Total Revenues

Personnel Professional ServicesOffice and AdministrativeLegalService FeesSponsor GrantsProvision for Loss on ReceivablesOtherDepreciation and Amortization

Total Expenses

Change in Net Assets Before Grant to ParentGrant to Parent

Change in Net AssetsNet Assets - Unrestricted, December 31, 2013 and 2012Net Assets - Restricted, December 31, 2013 and 2012

Net Assets, December 31, 2014 and 2013

4,796,643 2,500,000

2,296,643 53,191,472

538,496

$56,026,611

7,668,094 6,000,000

1,668,094 55,482,423

544,188

$57,694,705

21,795,673 2,945,459 6,202,869

970,817 1,650,000

332,710 592,200 284,861 341,480

35,116,069

24,265,437 3,513,343 5,925,975

977,609 295,000 132,500 208,357

3,106 278,437

35,599,764

$21,057,259 14,488,934

271,201 3,082,008 1,013,310

39,912,712

$23,870,590 14,569,336

152,057 3,297,522 1,378,353

43,267,858

pg.7National Equity Fund, Inc. – 2014 Annual Report

Partners

2014 Investors

Associated Bank

Bank of America

Bank of New York Mellon

Bank of the West

BBVA Compass Bank

BMO Harris Bank

Boston Private Bank & Trust Company

Bremer Bank

Capital One

Cathay Bank

Citibank

City National Bank

Comerica Bank

Fifth Third Bank

Goldman Sachs

JPMorgan Chase

KeyBank

Morgan Stanley

MetLife

Pacific Continental

People’s United Bank

Private Bank

RBS Citizens

Silicon Valley Bank

SunTrust Bank

TD Bank

US Bank

USAA

Washington Federal

Wells Fargo Bank

pg.8National Equity Fund, Inc. – 2014 Annual Report

Partners

2014 Sponsors

ACTION-Housing, Inc.

Affordable Housing & Services Collaborative, Inc.

Atlantic Housing Partners

Avenue Community Development Corporation

Banana Kelly Community Improvement Association

Bellwether Housing

Belmont Arthur Avenue Local Development Corporation

Brighton Properties, Inc.

Cantwell- Anderson, Inc.

Catholic Charities Housing Services

Charities Housing Development Corporation

Christian Church Homes of Northern California, Inc.

Churchill Residential, Inc.

Clare Housing

Commonwealth Development Corporation

Community Partners for Affordable Housing

Concern for Independent Living, Inc.

Conifer Realty, LLC

Dimeo Properties, Inc.

Domus Corporation

Ebenezer Society

Full Circle Communities, Inc.

Generation Housing Development, LLC

Gorman & Company, Inc.

Green Mountain Development Group, Inc.

Herman & Kittle Properties, Inc.

Hollywood Community Housing Corporation

Housing Authority of the City of Pasco and Franklin County

Housing Authority of the City of San Buenaventura

Housing Hope

Housing Trust of Rutland County, Inc.

Housing Visions Consultants, Inc.

Impact Services Corporation

La Frontera Partners, Inc.

Lemle & Wolff Construction Corporation

LifeNet Texas

Lumbee Tribe of North Carolina

MBD Community Housing Corporation

Mercy Housing California

Nevada H.A.N.D.

Newbury Management Company

Newport Millennium Housing Corporation III

North West Housing Partnership

Northwest Integrity Housing Company

Office of Rural and Farmworker Housing

pg.9National Equity Fund, Inc. – 2014 Annual Report

Partners

2014 Sponsors

Over the Rainbow Association

Pacific West Communities, Inc.

PATH Ventures

Peabody Properties, Inc.

Peoples’ Self Help Housing Corporation

Phoenix Family Ventures, Inc.

PIRHL Contractors, LLC

Port Arthur Housing Authority

Project for Pride in Living, Inc.

Project Freedom, Inc.

Project HOME

Psalms 127, LLC

Realtex Development Corporation

Re-Build America, Inc.

Rural Communities Housing Development Corporation

Sandra Erickson Real Estate, Inc.

Shelter Investments Development Corporation

Sierra Housing Resource Partners

Skid Row Housing Trust

Tampa Housing Authority

Tenderloin Neighborhood Development Corporation

The Core Companies

The ITEX Group

The Metro Company, LLC

The Model Group, Inc.

The Resurrection Project

The Woda Group, Inc.

Thomas Development Company

Thomas Safran Associates

Tierra Realty Trust, LLC

Transitional Housing Corporation

Turnstone Development Corporation

UP Development, LLC

Venice Community Housing Corporation

Versa Development, LLC

Volunteers of America-Greater Los Angeles

Volunteers of America-National

Weiss Properties Incorporated

Westport Housing Authority

Workforce Housing Advisors

pg.10National Equity Fund, Inc. – 2014 Annual Report

Properties

Completed in 2014

1380 University Avenue Bronx, NY

1490 Crotona Park East Apartments Bronx, NY

1770 TPT LLC Bronx, NY

4th & Pearl Apartments Pasco, WA

810 Arch Street Philadelphia, PA

Andalusia Clovis, NM

Autumn Village Apartments Clearlake, CA

Avenue Station Houston, TX

Biltmore Crossing Apartments Horseheads, NY

Blue Butterfly Village Los Angeles, CA

Casa Querétaro Chicago, IL

Casas de las Flores Carpinteria, CA

Castillo del Sol Apartments Ventura, CA

Clare Terrace Robbinsdale, MN

Concern Bergen Brooklyn, NY

Concern Ronkonkoma Lake Ronkonkoma, NY

Crossing Point Villas Sierra Vista, AZ

Crotona Park North Bronx, NY

Ebenezer Tower Apartments Minneapolis, MN

Elementary School Apartments Schofield, WI

Estates at Ellington Houston, TX

Evergreen at Arbor Hills Carrollton, TX

Freedom Village at Toms River Toms River, NJ

Freedom Village at Westhampton Mount Holly, NJ

Garfield Park Village Santa Cruz, CA

Gateway Apartments Marina del Rey, CA

Granger Family Housing Granger, WA

Greystone Court Caldwell, ID

Hammock Harbor Rockledge, FL

Impact Veterans and Family Housing Center Philadelphia, PA

Ligutti Tower Des Moines, IA

M.D. Fox Manor Hartford, CT

Middlebury Arms Middleboro, MA

Milwaukee Avenue Apartments Chicago, IL

Monroe Family Village Monroe, WA

Moss Park Winter Springs, FL

Naomi Gardens Arcadia, CA

Newport Scholar House Newport, KY

Park Central Port Arthur, TX

pg.11National Equity Fund, Inc. – 2014 Annual Report

Properties

Completed in 2014

Parkside Studios Sunnyvale, CA

Paso Fino Apartments San Antonio, TX

Path Villas at Del Ray Los Angeles, CA

Pebble Ridge Apartments Antigo, WI

Pembroke Senior Village Pembroke, NC

Penn Mathilda Apartments Pittsburgh, PA

Plover Apartments Bronx, NY

PPL DECC Minneapolis, MN

Pringle House Buckhannon, WV

Quail Ridge Senior Housing West Lebanon, NH

River Vale Senior Residence River Vale, NJ

Rosa Parks Phase II San Francisco, CA Salina Crossing Syracuse, NY

Sasco Creek Redevelopment Westport, CT

Sherman Park Homeowners Initiative Milwaukee, WI

Simpson Dawson Bronx. NY

Southwick Apartments Matteson, IL

St. Joseph’s Apartments Elmira, NY

Sugar Grove Seniors Sugar Grove, IL

The Barcelona at Beaverton Beaverton, OR

The Harry and Jeanette Weinberg Commons Washington, DC

The Parker Apartments Seattle, WA

The Six Los Angeles, CA

The Village at Palm Center Houston, TX

Thorncreek Senior Living Thornton, IL

Transbay Block Six San Francisco, CA

Trio at Encore Tampa, FL

Union Square Apartments Appleton, WI

Valencia Senior Apartments Fruitland, ID

Victory Place Phase IV Phoenix, AZ

Walnut Avenue Homes Niagara Falls, NY

Walnut Commons Muncie, IN

Watkins School & Carriage House Rutland, VT

Westcliff Heights Senior Apartments Las Vegas. NV

William Penn Manor Whittier, CA

Willow Housing Menlo Park, CA