The Tufa fund.
Tufa Fund, LLC is a regulated residential fund. It holds appreciation-based second liens on homes as portfolio assets, and issues shares that represent exposure to that portfolio.
The account page covers the account. This page covers the fund its shares represent.
A portfolio of appreciation-based second liens.
The fund places an appreciation-based second lien on each home it participates in, alongside the buyer’s standard first mortgage. It holds these liens as portfolio assets.
Because the fund holds many such positions across many homes and markets, a share represents diversified residential exposure rather than exposure to any single home.
How the lien resolves at payoff.
Consider a home purchased for $500,000, with a $50,000 appreciation-based second placed by the fund. The participation percentage is the second divided by the purchase price, here 10%. These figures are illustrative and are used only to show how the payoff is calculated.
The $50,000 principal plus 10% of the $100,000 appreciation, which is $10,000.
The $50,000 principal, and no shared appreciation is owed.
Appreciation is zero, so no shared appreciation is owed. The lien is non-recourse and sits behind the first mortgage, so the fund's recovery is limited to the property and may be less than the principal.
Shared appreciation is owed only when a home appreciates. The lien carries no interest and no monthly payment.
A share in the fund, not a stake in a home.
A shareholder holds shares in the fund, representing a pro rata interest in the fund’s portfolio. A share is not an interest in any specific home, and carries no claim on any individual property. The buyer of each home owns it outright and is the sole person on title.
How the fund is structured.
Fees.
Liquidity.
The fund holds illiquid assets and is designed to be held. There is no redemption right. Liquidity, when available, comes through repurchase offers the fund may choose to make.
Questions
What does a shareholder actually own?
Shares in the fund, representing a pro rata interest in its portfolio of appreciation-based second liens. Not an interest in any specific home.
How is the fund taxed, and what will I receive?
The fund is taxed as a corporation and reports income at the entity level. Members receive a Form 1099, not a Schedule K-1.
What are the fees?
A management fee of 0.75% per year of net asset value, calculated quarterly in arrears. Transaction costs of up to 1.5% per loan, minimum $1,000, borne by contributing families. There is no carried interest, no performance fee, and no preferred return.
Can I sell my shares back to the fund?
There is no redemption right. The fund is designed to be held. From time to time the fund may, at its discretion, offer to repurchase units, on at least 90 days' notice, once a unit has been held past a one-year lock-up. These offers are not guaranteed in any year, are capped, and are subject to the Manager's discretion.
Does a shareholder have a claim on a specific home?
No. Each home is owned outright by its buyer, who is the sole person on title. The fund holds a second lien as a portfolio asset, and a share represents exposure to the portfolio, not to any one home.
When will the fund be available?
Tufa is not yet available. A Reg A+ Form 1-A filing is in progress and the offering is not yet qualified. Request early access to be notified.
Tufa is not yet available. A filing is in progress and the offering is not yet qualified. Nothing on this page is an offer to sell or a solicitation of an offer to buy.