Model/Z, the Los Angeles volumetric modular manufacturer affiliated with SoLa Impact, closed a $32 million New Markets Tax Credit transaction on Oct. 15 that gives it a working capital line to start building modules before a project’s site work begins. The company says the money supports about 800 units of orders scheduled for 2026 and 2027 delivery.
That’s a financing problem most modular factories run into and few talk about. A factory has to buy material and pay its crews weeks or months before a module ships, while construction lenders generally fund against progress on the site. When those two clocks don’t line up, the factory carries the gap. Katerra’s 2021 collapse showed how badly that can end at scale.
How the modular housing tax credit deal is structured
Two community development entities supplied the allocation: Greenline Community Development Fund, an affiliate of Denver-based Greenline Ventures, with $18 million, and New Markets Community Capital, a TELACU company, with $14 million. The tax credit investor is DV VNB Community Investment Fund, a vehicle of Dudley Ventures and Valley National Bank. Dudley also invested in Model/Z’s first NMTC deal, according to the release.
The allocation figures aren’t cash in hand. NMTC investors earn a 39% federal credit over seven years for qualifying investments in low-income communities, and the subsidy that reaches the business is a fraction of the headline number. The release didn’t say what Model/Z nets.
The factory qualifies because of where it sits. It opened in Watts in 2024 and has produced more than 500 modules, and the company expects the plant to create or retain more than 117 permanent jobs, many of them in plumbing, electrical and assembly trades.
The volumetric modular order book
One project already draws on the line: 105th & Central, a 90-unit affordable development by Logos Faith Development on church-owned land in South Los Angeles. Beyond the 800 near-term units, Model/Z counts a pipeline of about 2,500 affordable and workforce units. Those are company figures, and a pipeline isn’t a backlog.
Founder Martin Muoto’s case is cost and time. Housing doesn’t get solved, he argues, unless both come down substantially. Factory production can deliver on the time half; the cost half depends on steady throughput, and steady throughput depends on financing exactly like this.
Why factory-built housing keeps hitting the same wall
Off-site work is drawing serious capital elsewhere, especially in data centers, where vendors such as Flex pitch factory-built modules that compress schedules. Housing factories don’t have hyperscaler balance sheets behind their customers. Their buyers are affordable housing developers waiting on tax credits of their own.
Model/Z’s approach is to treat the factory itself as a community development investment rather than waiting on each project’s construction loan. If 800 units actually ship on schedule in 2026 and 2027, other modular plants serving affordable housing will have a template worth copying. If they slip, the working capital line just moves the gap somewhere else.