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Low-Income Housing Tax Credits News Briefs - April 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

In February, Comptroller of the Currency Thomas J. Curry spoke about affordable housing and community development finance to the National Association of Affordable Housing Lenders, specifically concerning public welfare investment authority. Curry recognized that banks have embraced public welfare investment. He stated that despite the economic downturn, public welfare investments are growing steadily, and that by the end of 2012, cumulative investments totaled $68 billion, with banks making $9.6 billion in public welfare investments just last year. He stated that the public welfare investment authority has attracted a significant amount of private capital to address social and economic problems in communities, with banks and thrifts having used the authority to foster innovation and complement other programs designed to spur certain types of development, such as tax credits. Curry also noted that public welfare investments have a proven track record of sustainability and profitability, and that they encourage investments that complement initiatives in areas targeted by a governmental entity for redevelopment.

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Housing Credit District Fact Sheets are now available for all congressional districts. Produced in January, the fact sheets were compiled using data from the U.S. Department of Urban Housing’s (HUD’s) Low-Income Housing Tax Credit database. The same multipliers were used for both state and district results. The fact sheets are used to present the impact of housing credit in each community listed. Information included in the fact sheets are the number of units, the jobs created, and the local, state and federal revenue generated.

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In 2013, the apartment industry will focus on the housing finance system, creating tax code certainty and comprehensive immigration reform. The National Multi Housing Council (NMHC) and the National Apartment Association (NAA) worked to produce a policy agenda that would work toward maintaining a federal guarantee for multifamily mortgages, critical to ensuring that liquid mortgage capital is available in secondary and tertiary markets during all economic climates. Also included is to enact comprehensive tax reform, and to develop comprehensive federal immigration reform, including documentation for unauthorized individuals currently living and working in the United States and a workable guest worker program. To view the 2013 policy agenda, visit the National Multi Housing Council website.

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The Affordable Housing Tax Credit Coalition (AHTCC) announced its acceptance of entries for the 19th annual Charles L. Edson Tax Credit Excellence Awards program. AHTCC will recognize low-income housing tax credit (LIHTC) properties that provide the best in affordable rental housing development. Entry categories include: developments located in a metropolitan area (minimum population of 50,000 or standard metropolitan area), developments located in a rural area (maximum population of 50,000), special needs housing, senior housing, green housing, HUD preservation properties and public housing. Properties must have been placed in service on or after Jan. 1, 2012. Criteria for the awards are: Location of development, services provided to the residents, unique design, extraordinary communitywide support, financing structure and evidence of attention to overall development. More information is available at www.taxcreditcoalition.org.

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STATE BRIEFS

The Florida State Housing Initiative Partnerships (SHIP) program may receive up to $50 million in funding if Gov. Rick Scott’s budget request is approved by the legislature. Not only would the funding assist approximately 4,000 families throughout the state, it would also stimulate the Florida economy by providing an overall economic benefit of about $372 million and creating an estimated 5,500 jobs. This would be the first time in several years that SHIP would receive funding. The SHIP program is administered by the Florida Housing Finance Corporation. If approved by the Legislature, the funds will go to all of Florida’s 67 counties, as well as 62 Community Development Block Grant cities. By statute, each recipient would be guaranteed no less than $350,000 to support activities such as assistance in buying a home, rehabilitation of homes in need and foreclosure prevention.

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The Ohio Housing Finance Agency (OHFA) announced the Recycled Tax Credit Assistance Program (R-TCAP), which will be funded with the repayment of loans the OHFA made under the American Recovery and Reinvestment Act. Several R-TCAP subprograms will be available: the 9% Equity Bridge Loan Program, 4% Equity Bridge Loan Program and the Housing Tax Credit Preservation program. There is $5 million in funding available for 9% Equity Bridge Loans with applications due no later than Aug. 29, 2013. The 4% Equity Bridge Equity Loan Program has $9 million in Round 1 (open application period between March 1 and July 1) and $6 million available in Round 2 (applications accepted along with HDAP-Multifamily Bond applications in Fall 2013). The Housing Tax Credit Preservation program will provide $5 million in Round 1 (applications due May 16, 2013) and $4 million in Round 2 (applications due May 15, 2014). Minimum project requirements state that the funds go to housing that remains affordable for 15 years or more, and must serve households whose annual income does not exceed 80 percent of the median family income for the area. Eligible applicants are private for-profit housing developers, nonprofit organizations, public housing authorities and owners of existing LIHTC properties between the 10th and 20th year of the compliance period.

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The California Department of Housing and Community Development (HCD) will accept applications for funding under its Multifamily Housing program (MHP). The MHP provides support for newly constructed permanent and transitional rental housing units, and the rehabilitation and preservation of existing permanent and transitional rental housing. HCD has $46 million in funding for the program. Funding will be in the form of deferred payment, 55-year loans. In order to be considered an eligible development, a development must be rental or transitional housing that is new construction, rehabilitation or acquisition and rehabilitation of existing units, or conversion of existing nonresidential structures to rental housing. A property will not be considered if it is already under construction as of the application date or if its funding sources include 9 percent federal LIHTCs. Eligible applicants include local public entities, for-profit and nonprofit corporations, limited equity housing cooperatives, individuals, Indian reservations and rancherias, and some limited partnerships. Experience in having developed at least one affordable housing property is required. The application deadline is April 11, 2013 at 5 p.m.

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North Dakota Sen. Dwight Cook sponsored S.B. 2338, a bill set to provide tax exemptions for low-income housing and for property owned by charitable organizations. The bill would replace the property taxes on low-income housing projects to nonprofits once they’ve assumed full ownership of the property. The act is effective for taxable years beginning after Dec. 31, 2012. the Senate Finance and Taxation Committee heard favorable testimony to the bill, while no one spoke in opposition. S.B. 2338 is meant to improve a 2011 bill, S.B. 2049, which implemented property taxes to nonprofit organizations that own and operate federal LIHTC properties. A copy of the bill can be found online at www.taxcredithousing.com.

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The Massachusetts Department of Housing and Community Development announced $67 million in funding and tax credits will go to 23 affordable housing developments in 21 communities in Massachusetts. In all, the 23 projects across the state will create 1,326 units of housing and an estimated 1,710 construction jobs. This $67 million investment will include more than $9 million in federal LIHTCs, $7.7 million in state LIHTCs, and $47.7 million in state and federal housing program subsidies. Of the 1,326 units, 1,164 will be affordable to low- and moderate-income individuals and households, with 298 units reserved for extremely low-income families, including those making the transition from homelessness.

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DEALMAKERS

Affirmed Housing Group celebrated the groundbreaking of Arbor Green Apartments, in Carson, Calif. The three-story affordable family community will include 40 apartment homes with one-, two- and three-bedroom units. Community amenities will include covered parking, a community room, a computer lab, a laundry room, a tot lot and a barbecue area. The units will be available for households earning between 30 percent and 60 percent of Los Angeles County’s average median income. The development will be designed to achieve LEED Gold certification.

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U.S. Bank is providing more than $48 million in financing to aid BRIDGE Housing Corporation, a nonprofit developer of affordable housing for working families and seniors, in developing apartments in the East Village Quarter District of downtown San Diego. U.S. Bank will cover construction debt and provide more than $37 million of LIHTC equity through its tax credit investment subsidiary, U.S. Bancorp Community Development Corporation. The 17-story Celadon, located at Ninth and Broadway, will have a mix of 250 living units, studios and one-bedroom apartments available to individuals and small families earning 30 to 60 percent of area median income. The project is under construction and will be completed by spring 2015.

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Boston Capital announced in February that it will invest in a two-phase affordable multifamily development in Danvers, Mass. Boston Capital, a real estate investment and advisory firm, will add 90 units of affordable housing to the area. The project will consist of two phases at Conifer Hill Commons. The first phase includes a 48-unit development, and the second phase consists of a 42-unit development. Phase I will comprise 12 one-bedroom, 30 two-bedroom and six three-bedroom units located in three, three-story buildings. Phase II will include nine one-bedroom, 27 two-bedroom and six three-bedroom units in three, three-story buildings.

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PEOPLE IN THE INDUSTRY

Anil Advani rejoined WNC in the new role of overseeing the private label fund business. WNC, a national investor in real estate and community development initiatives, announced that 17-year tax credit veteran Anil Advani will continue on at the company as senior vice president - private label funds. Advani will be responsible for developing and maintaining relationships with private label investors, as well as managing the closing process of WNC’s private label funds. Advani previously oversaw WNC’s underwriting. Advani brings a unique set of skills in the affordable housing industry. Prior to joining WNC, he served as managing director with Red Capital Group, working in the company’s tax syndication group. He was responsible for originating and underwriting tax credit investments for placement into corporate tax credit funds. Advani also served as manager of tax credit investment Advisory Services of Ernst & Young, performing due diligence on tax credit funds.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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