Featured Articles

Plus News Briefs

This information was published in the Novogradac Journal of Tax Credits. The complete version is available by paid subscription only. Click here for more information on subscribing.

Also in this Issue

  • New Rental Research Report Demonstrates Growing Need for Affordable Housing

  • LIHTC Working Group Addresses Technical, Administrative Issues

  • HUD Sheds New Light on Housing Needs of People with Disabilities

  • Focus On: Fresno, California

  • Are You Ready to Travel Through the USDA and LIHTC Rent Labyrinth?

  • Massachusetts Property Has New Design, New Name, Same Mission

  • Health Center Will Provide Care for Thousands of Foster Children

  • Targeted Populations Guidance to Date Leaves Some Unanswered Questions

  • NMTC Loan Fund Benefits Small Not-For-Profits

  • NMTCs Help Vermont Dairy Tale Come True

  • NMTCs Make Solar Affordable to Low-Income Homeowners

  • Waves of NMTC Funding Shore Up Aquarium

  • NMTC Working Group Update: June 2011

  • Q&A: End of the Compliance Period

  • The Other Often Overlooked Review: Adaptive Reuse and Federal Section 106 Historic Process

  • Q&A: Some Considerations for Finding Investors in a Smaller HTC Deal

  • California College Lights the Way for Campus Solar Projects

  • The Current: A Few Things to Know About 1603 Grants in 2011

June 2011, Volume II, Issue VI Published By Novogradac & Company LLP


Fannie Mae released two white papers that outline the company's multifamily rental activities and the outlook for affordable rental housing and the small multifamily loan market. The first paper, "Fannie Mae and Workforce Rental Housing," describes the growing need for rental housing, particularly affordable rental housing. Typically, 90 percent of Fannie Mae's multifamily financing supports rental housing that is affordable to households earning at or below the area median income, the company said. The paper describes economic conditions that affect the multifamily housing sector and the challenges facing rental housing. The second white paper, "Fannie Mae's Role in the Small Multifamily Market," relates to small loans – loans of less than $3 million in most markets and less than $5 million in certain high-cost areas. Find copies of both white papers at www.novoco.com.

A record number of renters are paying more than half their income for housing, according to a report from the Harvard Joint Center for Housing Studies (JCHS). "America's Rental Housing: Meeting Challenges, Building on Opportunities" found that one in four renters, or 10.1 million households, spend more than half of their income on rent and utilities. JCHS attributed the record-high levels to the recession, which worsened budgets already strained by rising utility costs and declining incomes. The report also determined that while affordable housing demand is stronger than ever, the supply is shrinking. JCHS said that rental housing policy, in addition to alleviating renters' economic burden, may help address poverty and communities hit hard by the foreclosure crisis. Read more about the report on page 8. Download a copy of the report at www.jchs.harvard.edu.

Fannie Mae announced its top multifamily loan originators for 2010. The company said that it and its lender partners provided $16.9 billion in debt financing through approximately 2,300 multifamily mortgage loans financing 306,000 rental housing units. The top 10 lenders of 2010 are, in descending order, Wells Fargo Bank; DB Mortgage Services; Walker & Dunlop; CBRE Multifamily Capital; PNC Bank; Arbor Commercial Funding; Prudential Multifamily Mortgage; CWCapital; M&T Realty Capital Corporation; and Greystone Servicing Corporation. Fannie Mae said that in 2010 these lender partners produced through its Delegated Underwriting and Servicing program the highest multifamily loan volumes by contributing at least $870 million each.


Affirmed Housing Group broke ground on Lotus Garden Apartments, a 60-unit affordable multifamily development in Los Angeles, Calif. Units are available to families earning between 30 and 60 percent of the area median income (AMI), and rents will range from $370 for a studio apartment to $1,236 for a three-bedroom unit. The development's design incorporates sustainable elements and technology to achieve LEED certification. Solar hot water heating will support high-efficiency boilers and residents will have access to a rooftop recreation area featuring a tot lot and gardening plots. Lotus Garden will also be the first development in Southern California to use a semi-automated parking system, which will allow drivers to park their cars on platforms that can move vertically for a stacking effect.

Bridge Housing held a groundbreaking for a 138-unit senior rental community located on a former commercial parking lot in Sacramento, Calif. Foothill Farms will be targeted to seniors earning 30 to 50 percent of AMI. The community includes a 4,020-square-foot community clubhouse with a lounge, meeting rooms for resident services and management offices. Foothill Farms' buildings will have double-loaded corridors, elevators and breezeway connections to allow wheelchair accessibility for all units. Outdoor common areas include a pool and spa area with a patio, community gardens, a bocce court and sitting areas within a landscaped courtyard. The courtyard will also function as a bioswale, filtering and slowing storm runoff.

RED Capital Markets purchased low-income housing tax credit (LIHTC) equity for two affordable senior communities in Atlanta, Ga. for Prestwick Development Company. Both properties were financed with a combination of federal and state LIHTCs, FHA loans and a variety of soft funding. Manor at Scott's Crossing, built on a 5-acre redevelopment site, will consist of 100 one-bedroom units geared to elderly tenants. Units will be available to residents earning between 50 and 60 percent of AMI. Gateway East Point will also contain 100 one-bedroom senior units and will be available to residents with incomes of no more than 50 to 60 percent of AMI. The community is being constructed on 1.7 acres where a vacant office building once stood and will help advance revitalization efforts in the area.

Boston Capital invested in the rehabilitation of 81 Ash Street Senior Housing, a 32-unit senior development in Lewiston, Maine. The project will convert the Healey Asylum, an orphanage built in 1893, into 26 one-bedroom and six two-bedroom units for seniors that earn 60 percent of AMI or less. Amenities will include two community rooms, central laundry and wireless Internet access. The building's rehabilitation will be financed with equity from LIHTCs and historic tax credits at a cost of approximately $195,766 per unit.


Plans to combine the Louisiana Housing Finance Agency (LHFA) and other housing-related organizations into a single Louisiana Housing Corporation could reduce the housing agency's financial strength, according to Moody's Investors Service. A report in Moody's Weekly Credit Outlook said that although the intent of the proposed consolidation is to create operating efficiencies, Moody's would view such a consolidation as a significant credit negative for LHFA because the new structure could divert resources away from LHFA and dilute its strong balance sheet. LHFA reported net assets of approximately $227 million, compared to approximately $37 million in general obligation debt. Read the full report online at www.moodys.com.

The Kansas Housing Resources Corporation announced it has cancelled its second round of 2011 low-income housing tax credit applications due to heavy demand and a shortage of credit availability in the first round. Second round applications would have been due in August.

Equity pricing for Nevada's 2011 qualified allocation plan (QAP) will float for each project based on the syndicator information and criteria set forth in the application, the Nevada Housing Division said in a memorandum to all 2011 QAP applicants. In applications where pricing exceeds 85 cents, the agency's underwriting criteria will be set at the 85-cent value. More information about the QAP is available at www.housing.nv.gov.

The North Dakota Housing Finance Agency (NDHFA) granted conditional commitments for $2.9 million in LIHTCs for the construction or rehabilitation of 258 affordable units in six developments. The awards include $546,107 to California Commercial Investment to buy and rehabilitate 106 units serving the elderly at Pioneer-Peaceful Haven in Dickinson; $616,250 to Artspace Projects Inc. to construct the 32-unit Mainstreet Artspace Lofts in Minot; $602,519 to GA Haan Development LLC for construction of 40 units at Nokota Ridge in Williston; $219,663 to Region V Community Development to build 25 units at Sundance Village in Casselton; $592,716 to Turtle Mountain Housing Authority to build 28 units at Turtle Mountain Homes VII in Dunseith; and $382,250 to Southhill Properties LLC for the construction of 27 units serving the elderly at Preserve Townhomes in West Fargo.

The Arizona Department of Housing (ADOH) is accepting nominations for the 2011 Arizona Housing Hero Awards, which celebrate the achievements and service of communities, individuals and private sector groups. Six awards are available in the categories of innovative supportive housing program or service, outstanding affordable housing initiative, exemplary rural multifamily project, exemplary urban multifamily project, tribal initiatives, the Arthur Crozier Partner in Housing Award, and elected official. The awards will be presented during the Arizona Housing Forum on September 22. Guidelines, instructions and nomination forms are available on ADOH's web site at www.azhousing.gov.


Bradley Bullock joined City Real Estate Advisors' (CREA's) Portland, Ore. office as senior vice president of acquisitions. Bullock has more than 24 years of experience in the affordable housing industry; most recently as the head of advisory service for Guardian Real Estate Services and for the previous three years as the head of Capmark's asset resolutions.

RED Capital Group, headquartered in Columbus, Ohio, announced several changes across its leadership teams. At RED Mortgage Capital, Mark C. Beisler assumed the position of chairman and CEO, while Kenneth H. Bowen was named president and Sheri N. Thompson moved into the role of Fannie Mae chief underwriter at RED's mortgage banking entity. At RED Capital Markets, James F. Croft was named chairman and Michael D. Harrington assumed the role of president. Founding members David L. Goodman and James S. Chapman were promoted to RED Capital Group senior advisor and vice chairman/capital markets, respectively. Brian T. Kelleher assumed the newly created position of vice chairman M&A/corporate development with RED Capital Group. Michael S. Wood was named president and CEO, RED Capital Advisors.

AMCAL Multi-Housing Inc. selected Craig Adelman to lead its new San Francisco, Calif. office, which will oversee all AMCAL development activities in Northern California. As vice president, Adelman will be responsible for expanding AMCAL's presence into Northern California, creating and finding new housing development opportunities. Prior to joining AMCAL, he managed real estate and policy activities as the deputy director of the San Francisco Mayor's Office of Housing. Adelman holds a bachelor's degree from University of California, Berkeley.

Mercy Loan Fund, a subsidiary of the national affordable housing organization Mercy Housing, announced the appointment of four new members to its board of directors. Ben Etheridge, vice president of Baltimore, Md.'s Chesapeake Community Advisors Inc. (CCA), specializes in LIHTCs. He manages CCA's development and consulting activities. Susan Newton-Rhodes provides financial consulting services to organizations that focus on community development. She specializes in financial, organizational and project underwriting, due diligence and loan workout strategies. Karen Przypyszny is senior vice president, proprietary transactions, for Chicago-Ill.-based National Equity Fund Inc. (NEF). She manages the placement and oversight of investments targeting NEF's proprietary funds. Sandra Sauer is vice president, Colorado commercial real estate, at U.S. Bank. She manages a multiproduct commercial real estate loan portfolio to publicly traded real estate investment trusts and privately held investors and developers.