AFFORDABLE HOUSING INDUSTRY

As of June 30, states had awarded more than $4.1 billion in American Recovery and Reinvestment Act (Recovery Act) funds to provide affordable housing, a Treasury report revealed. This number represents more than 900 sub-awards. Treasury said this funding has saved or created more than 80,000 jobs to build or rehabilitate housing units. Treasury also reported that as of July 27, it had awarded nearly $5.5 billion in Section 1602 low-income housing tax credit exchange program funds to state housing authorities in 49 states and five territories. The report is available online at www.taxcredithousing.com.

The Office of Management and Budget (OMB) adopted the 2010 Standards for Delineating Metropolitan and Micropolitan Statistical Areas in June to replace and supersede its 2000 Standards for Defining Metropolitan and Micropolitan Statistical Areas (MSAs). In these new standards, OMB has decided to replace the word “definition” with the word “delineation”; to discontinue yearly MSA updates in favor of a more comprehensive update in 2018; to automatically qualify adjacent core based statistical areas for combination if they possess an employment interchange of 15 or higher; and to eliminate the use of local opinion in combined statistical area titling. See the June 28 Federal Register notice for more details.

Seattle, Wash.-based Modern Realty Inc., parent company of Pacific Housing Advisors and Allied Pacific Development, changed its name to Vitus Group in July. Pacific Housing Advisors and Allied Pacific Development have also changed their names to Vitus Advisors and Vitus Development, respectively. The company now actively develops properties nationwide, with offices in Seattle, New York, N.Y. and San Francisco, Calif. Vitus also serves as a consultant to developer clients planning affordable housing projects. The company has developed and owns more than 5,000 residential units in more than 60 properties in 13 states.

DEALMAKERS

The Federal Housing Administration (FHA) featured Malibu Apartments in Austin, Texas as its July multifamily newsletter’s deal of the month. The Mulholland Group LLC will convert the 476-unit complex to a low-income tax credit (LIHTC) community. Renovations will include interior improvements to the units, 48 new accessible units, a community center, fitness center and classroom space. The acquisition and rehabilitation was funded by a $16.2 million 221(d)(4) loan, $15.4 million in equity from the Texas Department of Housing and Community Development through the Section 1602 LIHTC exchange program and a $3 million no-interest loan from the city of Austin.

The Housing Authority of the Seminole Nation of Oklahoma (HASNOK) will receive a $450,000 Affordable Housing Program grant from the Federal Home Loan Bank of Topeka for the construction of 25 homes in Seminole County, reducing tribal contributions to the project. Primary funding comes from a 2009 allocation of LIHTCs from the Oklahoma Housing Finance Agency. The homes in the second phase of the Rolling Meadows subdivision, located on an 80-acre land parcel in Earlsboro, Okla., will be available to households earning 50 percent area median income (AMI) or below. HASNOK’s waiting list now includes 162 area households in need of affordable housing.

RBC Capital Markets’ Tax Equity Group closed its Tax Credit National Fund Equity 12 with more than $107.5 million in total equity. The fund’s six investors included two new investor partners, one of which is a first-time LIHTC investor. The fund invested in the following affordable housing tax credit properties located in 15 states and the District of Columbia: Alamito Gardens in El Paso, Texas; Austin Park Place in Memphis, Tenn.; Beacon Park Townhomes in Kansas City, Mo.; Central Park in Madison, Wis.; Ceres Way III in Fontana, Calif.; Edgemont Village II in Demopolis, Ala.; Hawks Ridge in Bath Township, Mich.; Hunter’s Trace in Benton, Ill.; Longfellow Arms in Washington, D.C.; Mission Village in Riverside, Calif.; Phoenix on the Fax in Denver, Colo.; Prospect Macy in Bronx, N.Y.; Randall Place in Goldsboro, N.C.; Rosslare Senior Apartments in Idaho Falls, Idaho; Santa Cruz – Artspace in Santa Cruz, Calif.; The Shelton in Arlington, Va.; Trail Creek in Green Bay, Wis.; Village at Lakewest II in Dallas, Texas; Vista Court in Vancouver, Wash.; and Washington Beech 2B in Boston, Mass.

The Oklahoma Housing Finance Agency (OHFA) helped jumpstart renovations on a 29-year-old affordable housing complex in Ada, Okla. Oxford Square Apartments originally received a $275,558 LIHTC allocation for renovations but couldn’t find an investor. The project stalled in 2008 at roughly 40 percent completion. OHFA provided $2.2 million in Section 1602 LIHTC exchange funds, allowing renovations to be completed. The development is now free of asbestos and mold, and features remodeled kitchens and a new playground.

STATE

The Illinois Housing Development Authority (IHDA) celebrated the opening of a new affordable housing development for 78 Madison County families. IHDA invested nearly $1.4 million in low-income housing tax credits and a $150,000 no-interest Affordable Housing Trust Fund loan to finance the Meachum Crossing Apartments in Venice. IHDA’s LIHTC investment generated an additional $12.4 million in private equity to construct the one-, two- and three-bedroom apartments, including nine accessible units for persons with disabilities. The community also features playgrounds, a community room, exercise equipment and computers.

Senior staff from the New York Division of Housing and Community Renewal (DHCR) and nyhomes met with Long Island housing advocates in July for the first roundtable discussion of the integration of nyhomes and DHCR. Topics included the two agencies’ strengths, opportunities for coordination, streamlining application and monitoring processes, and eliminating duplications. Additional roundtables with government leaders, housing advocates and partners were held last month in Albany, Buffalo and New York City.

The Illinois Housing Development Authority (IHDA) invested $8.7 million in Section 1602 exchange funds to build Cascade Garden, an affordable 70-unit property in Rock Island for families with special needs. Residents will have access to supportive services and activities. IHDA expects construction to be completed in August 2011.

PEOPLE IN THE INDUSTRY

Freddie Mac appointed Deborah Jenkins to vice president and national head of multifamily underwriting and credit. Jenkins will be responsible for managing the underwriting and credit approvals of all multifamily debt investments for Freddie Mac, and managing the underwriting and credit staff at its offices across the country. Prior to her new position, Jenkins was the national underwriting and quality control director in Freddie Mac’s multifamily underwriting and credit department, where she also managed and developed the underwriting process for multifamily loans eligible for securitization. Before joining Freddie Mac in 2008, she was a senior vice president and senior underwriter with Wells Fargo National Bank in Michigan.

Margaret Danuser joined Colorado Housing and Finance Authority (CHFA) as its new director of corporate debt and investment management. She will administer CHFA’s existing bond portfolio, which currently stands in excess of $3.6 billion. Danuser will also oversee CHFA’s debt issuance and treasury functions, and will serve on CHFA’s strategic management team. Prior to joining CHFA, she was the debt administrator for the city and county of Denver, and previously served as a fixed income investment manager for the Dreyfus Founders Funds.

TD Bank named Lenore H. Gordon its new senior asset manager of the Community Capital Group (CCG) in Ramsey, N.J. She will serve as the lead asset manager for CCG Asset Management, which manages closed bank investments in low-income housing, historic and new markets tax credit opportunities and other tax-advantaged vehicles to ensure compliance with the Community Reinvestment Act (CRA) and other guidelines. Gordon has 14 years of experience in real estate accounting and asset management. Prior to joining TD Bank, she served as a senior asset manager at Enterprise Community Investment Inc. Gordon received a master’s degree in accounting from the Zicklin School of Business at Baruch College, City University of New York.

Jeff Jacobson announced the formation of Clocktower Tax Credits LLC, to raise capital for economic development projects in the areas of affordable housing, historic building rehabilitation, renewable energy and film production. The office will be located in Maynard, Mass. and will employ industry specialists to serve developer and producer clients. In the last 10 years, Jacobson has raised more than $300 million in equity capital for projects in more than 25 states. His experience also includes positions at Foss and Company, Boston Capital and working on GE Capital and Edison Capital’s tax credit portfolios.

Comptroller of the Currency John C. Dugan left office in August. In his letter notifying President Barack Obama of his intention to step down, Dugan noted that the banking system had strengthened considerably since the worst days of the economic crisis and is now much improved, with credit trends getting better in a number of areas. As comptroller, Dugan had been a director of the Federal Deposit Insurance Corporation and NeighborWorks America. Before becoming comptroller, he was a partner in the law firm of Covington & Burling, and he also served as Assistant Treasury Secretary for Domestic Finance and as Minority General Counsel to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. Dugan is a graduate of Harvard Law School and the University of Michigan.

BONDS

Red Stone Partners (RedStone) recently launched a $250 million fund to acquire fixed rate tax-exempt bonds. The company established the fund to purchase newly issued bonds used to finance the acquisition and rehabilitation of affordable multifamily housing as well as to purchase and restructure existing tax-exempt bonds on stabilized properties. The program is available for bonds issued to finance 4 percent low-income housing tax credit properties and 501(c)(3) multifamily bonds. RedStone said it has closed more than $50 million through its direct bond purchase structure.

Citi Community Capital and L+M Development Partners established a $100 million fund to preserve and expand the New York metropolitan area’s affordable housing stock. During the next three years, the New York Affordable Housing (NYAH) Preservation Fund will help finance the preservation and rehabilitation of more than 2,000 affordable apartments by making strategic equity investments with local operating partners. To ensure that responsible owners can compete in the metropolitan marketplace, the fund will also provide affordable housing expertise, regulatory guidance and access to debt financing. An affiliate of L+M Development Partners will be the fund’s managing member and will execute the investment strategy. As part of the city’s New Housing Marketplace Plan (NHMP), New York is working to finance the creation or preservation of more than 165,000 homes by 2014.

The California Debt Limit Allocation Committee (CDLAC) reported the award of more than $102.5 million to date in Recovery Zone Facility Bonds (RZFB) for seven projects, out of its more than $132.2 million in waived RZFB issuance authority. CDLAC also awarded its entire $132 million in waived Recovery Zone Economic Development Bonds (RZEDB) issuance authority to five projects. CDLAC said the funds give public businesses and public agencies opportunities to create or expand job-producing operations in California.

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