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 how-it-works page covers the structure. 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 $75,000 appreciation-based second placed by the fund. The participation percentage is the second divided by the purchase price, here 15%. These figures are illustrative and are used only to show how the payoff is calculated.
15% of the $600,000 sale price.
15% of the $500,000 sale price, equal to the original advance.
15% of the $400,000 sale price. The fund's share moves down with the home's value.
The fund’s share is owed whether the home rises or falls in value. It carries no interest and no monthly payment.
What the fund actually recovers is a separate question. The lien is non-recourse and sits behind the first mortgage. At a low enough sale price, the proceeds remaining after the first mortgage and selling costs may not cover even the reduced share, and the fund’s recovery can approach zero.
How the fund is structured.
Fees.
Residential real estate can lose value. So can the fund.
The fund’s return comes from residential appreciation, which means it carries residential risk. Home prices can fall. When they do, the amount the fund receives on each home falls with it, and the fund can lose money on a position or across the pool. The historical chart on the homepage shows residential has declined in real periods, not only risen. Past behavior is context, not protection.
Two things work in your favor, and it’s worth being precise about what they do and don’t do.
Diversification spreads the risk.
The fund holds many positions across many homes, so no single home, including your family member’s, determines the outcome. This reduces the chance that one bad position drives your return. It does not remove the risk that residential as a whole declines.
The fund’s claim is limited to the home.
On any single home, the fund receives its percentage of the home’s value at sale, refinance, or payoff, so what it is owed already falls when the home falls. Its only recourse is the home itself, and its lien sits behind the first mortgage. At a low enough sale price, the proceeds remaining after the first mortgage and selling costs may not cover even that reduced share. The fund absorbs the shortfall and cannot pursue the homeowner for it. For you as an investor, a loss on any single home is contained to that home, but the fund, as subordinate capital, takes that loss ahead of the first mortgage.
What neither does is guarantee a return or protect against a broad residential downturn. You’re investing in residential real estate with clear eyes about what that means.
A regulated structure, in pre-launch.
Tufa is preparing to offer fund shares under Regulation A of the Securities Act, through offering documents that will be filed with and qualified by the SEC. Until that qualification, no securities are being offered or sold, and nothing on this page is an offer.
The structure is built to be measured and reported on consistently. The value of the fund is computed under a documented methodology applied the same way across periods, so the number your shares are measured against isn’t improvised quarter to quarter. Investors receive annual financial statements and yearly tax reporting.
This is what distinguishes a regulated fund from an informal family arrangement. Family capital already flows into home purchases, just without standardized administration, transparent valuation, or regulatory oversight. The fund exists to provide exactly those things.
There is no redemption right. The fund may, at the Manager’s discretion, offer to repurchase units, and is under no obligation to make an offer in any year.
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.