Low-Income Housing Tax Credits News Briefs - April 2016

Friday, April 1, 2016

AFFORDABLE HOUSING INDUSTRY BRIEFS

The Internal Revenue Service (IRS) March 4 released Notice 2016-23. The IRS is requesting comments on the new partnership audit regime enacted in the Bipartisan Budget Act of 2015.The new regime for auditing all partnerships will be effective for tax years beginning after Dec. 31, 2017. Some partnerships may elect into the regime before that date. The provisions are intended to make the IRS partnership audit process more efficient by eliminating multitier audits and determinations at the partner level. Comments on the new rules are due April 15. The notice is available at www.taxcredithousing.com.

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The U.S. Department of Housing and Urban Development (HUD) posted for advance review March 1 a final rule to ease regulatory requirements for a number of programs. The rule is intended to streamline requirements and provide flexibility for agencies that administer HUD’s rental assistance programs. The requirements listed include such things as tenant rental payments, rent determination processes, verification of Social Security numbers for children of applicants, frequency of utility reimbursement payments and more. The rule, which was proposed in January 2015 and issued as an interim rule in September 2015, will become effective 30 days after being published in the Federal Register.

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On March 7, the Affordable Housing Investors Council (AHIC) submitted a comment letter to Alfred M. Pollard, the general counsel of the Federal Housing Finance Agency (FHFA) on the proposed rule regarding Enterprise Duty to Underserved Markets, which was released in the Federal Register Dec. 18, 2015. Specifically, AHIC commented on the potential impact of the resumption of LIHTC investing by the Enterprises. AHIC states the organization does not support this proposal, but it does provide support for the role the Enterprises play in multifamily affordable housing lending. AHIC comments on questions Nos. 41 to 45. Both the original proposed rule and the comment letter are available at www.hudresourcecenter.com.

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The ACTION Campaign collected the final signatures March 11 for a sign-on letter to Congress that advocated for a LIHTC allocation authority cap increase of at least 50 percent. ACTION’s projections indicated such an expansion would support the preservation and construction of 350,000 to 400,000 additional affordable apartments over a 10-year period. The document is available at www.rentalhousingaction.org.

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The National Low-Income Housing Coalition (NLIHC) held its Housing Policy Forum April 3-5 in Washington, D.C. Julián Castro, HUD secretary, spoke about HUD priorities for 2016 and beyond. Additional featured sessions included affordable housing past, present and future with NLIHC president and chief executive officer (CEO), Sheila Crowley, and incoming NLIHC president and CEO Diane Yentel, as well as housing in the 2016 elections, affirmatively furthering fair housing and National Housing Trust Fund implementation.

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The Affordable Housing Tax Credit Coalition (AHTCC) submitted comments to the House Ways and Means Subcommittee on Human Resources March 1 related to the hearing, “Getting Incentives Right: Connecting Low-Income Individuals With Jobs.” The AHTCC’s comments focused on the LIHTC’s ability to provide affordable rental housing for low-income individuals in communities with job opportunities and that an expansion of the LIHTC is necessary to connect more low-income families to opportunity. AHTCC began by arguing that the one critical factor in connecting low-income people with jobs is making sure that there is an adequate supply of affordable rental housing in areas where employers are trying to hire lower-income people. AHTCC urged Congress to address the nation’s severe shortage of affordable rental housing by expanding the amount of LIHTCs for each state by at least 50 percent. The letter stated that with the current cap on LIHTC authority, state allocating agencies have to make tradeoffs between competing priorities. AHTCC closed the letter by asking Congress to increase LIHTC authority as Congress considers a pro-growth agenda.

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HUD announced March 9 a 30-day notice of proposed information collection on statutorily mandated collection of information for tenants in low-income housing tax credit (LIHTC) properties. The comment period ends April 8. The notice is available at www.hudresourcecenter.com.

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The Office of the Comptroller of the Currency (OCC) released an updated edition of its 2006 Community Developments Insights report titled, “Commercial Lending in Indian Country: Potential Opportunities in a Growing Market.” The report explores the commercial lending environment in Indian Country, including the relationship between the commercial lending business and Native American governmental, legal and institutional structures. OCC reviews the factors that make lending in Indian Country attractive for banks, examines the unique challenges for banks interested in commercial lending on Indian reservations, and discusses successful marketing and risk mitigation strategies that banks can adopt. The report is available at www.newmarketscredits.com.

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STATE BRIEFS

Indiana Lt. Gov. Sue Ellspermann announced in early March the combined allocations of more than $14.3 million in low-income housing tax credits (LIHTCs) to 18 multifamily housing developments. The developments, located throughout the state, will provide 800 affordable housing apartments. The Indiana Housing and Community Development Authority (IHCDA) received 50 applications requesting approximately $42 million in federal LIHTCs and $16.1 million in supplemental IHCDA funding. The full list of applicants and awards is available at www.taxcredithousing.com.

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New Hampshire Housing (NHH) held a public hearing March 18 to discuss the draft 2017 qualified allocation plan (QAP). The hearing was held in the boardroom at the New Hampshire Housing Finance Authority. The draft QAP is available at www.nhhfa.org.

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Comments on the proposed changes to the QAP and Multifamily Rental Financing Program Guide were due March 15 to the Maryland Department of Housing and Community Development. The most significant proposed change is the adjustment of a several scoring categories to create stronger incentives for multifamily rental housing developments that provide housing for families in communities of opportunity. In order to be a community of opportunity, the community must have a composite opportunity index that it is above the statewide average.

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The North Dakota Housing Finance Agency (NDHFA) announced Feb. 24 that applications were being accepted for the state’s Housing Incentive Fund (HIF). HIF supports the development of multifamily housing for essential service workers and low- and moderate-income households. NDHFA has approximately $9 million available, with $5 million set aside for communities with populations of less than 12,500 residents. Rural community populations will be determined using 2010 U.S. Census data.

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Kenneth C. Holt, Maryland Secretary of Housing, spoke at the 2016 Maryland Housing Day event Feb. 18, stating that creating affordable rental housing opportunities across the state creates jobs and stimulates the economy while providing quality, energy-efficient homes for families, senior citizens and individuals with special needs. The secretary said programs such as Rental Housing Works provide invaluable financial resources for increasing the supply of affordable rental housing Maryland. Maryland Housing Day is an annual event sponsored by the Maryland Affordable Housing Coalition, designed to remind lawmakers of the importance of affordable housing to the state’s economy.

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On Feb. 18, the NDHFA recognized the Champions of Affordable Housing during its 25th Statewide Housing Conference. The Champion awards recognize and celebrate the work of individuals, nonprofit organizations, public agencies and private sector businesses that make exceptional affordable housing contributions in North Dakota. Awards were presented to five financial institutions that originated loans on NDHFA’s behalf in 2015. Recognized were Capital Credit Union and Scott Bullinger of Bismarck, First Community Credit Union and Clayton Lilleby of Fargo, First International Bank & Trust and Patti Helm of Fargo, Gate City Bank and Tammy Skogen of Bismarck and Town and Country Credit Union and Reneé Freeman of Fargo. NDHFA also recognized three real estate agents, April Bernabucci of Keller Williams Realty in Fargo, Kirstin Wilhelm of Keller Williams Realty in Bismarck and Shirley Thomas of Bianco Realty in Bismarck, for the assistance they provided to the agency’s borrowers. Amaya Quijano of NLR Property Management in Williston received NDHFA’s property management award for her management of three agency-funded multifamily properties. Legacy at Central Place in Williston received NDHFA’s housing production award for the Lutheran Social Services housing development. The property is the adaptive reuse of a former school building into 44 affordable housing units for households aged 55 years and older. Terry Hanson, executive director of Grand Forks Housing Authority, was recognized with NDHFA’s leadership award.

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DEALMAKERS

Dominium, a Minneapolis-based apartment development and management company, announced Feb. 22 that it acquired Lonnie Adkins Court Apartments in St. Paul, Minn. Planned interior renovations include reopening a laundry room, new mechanical systems and new tenant storage area. Many individual units also will undergo renovations with new efficient lighting and plumbing fixtures and other upgrades, as needed. Exterior improvements include a new playground and new security system. There will also be an additional two units constructed, bringing the total of apartments to 79.

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UnitedHealthcare announced Feb. 11 a strategic partnership with Chicanos Por La Causa Inc. (CPLC), a nonprofit community development organization in Arizona. Through the partnership, UnitedHealthcare committed to provide access to up to $20 million of capital to CPLC to acquire, develop and operate multifamily housing units in the Phoenix area, as well as offering and administering a variety of need-based services to residents. The property is a part of UnitedHealthcare’s myConnections pilot program, which is designed to helping low-income individuals and families access social services such as quality housing, transportation, job training and education.

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St. Francis Center announced plans Jan. 26 for the Saint Francis Apartments at Cathedral Square in Denver. There will be 50 one-bedroom units available at 30 percent of the area median income (AMI). The Colorado Housing and Finance Authority (CHFA) provided $9.1 million of LIHTCs over a 10-year period. Additional funding includes a loan from the city and a grant from the Colorado’s Housing Development Grant Fund. Development will consist of a one six-story building with podium parking and a lobby/reception area on the ground floor. The building’s second story will contain approximately 2,669 square feet of common and service space that will include a large common/dining room, a meeting room, a library/computer lab, a central laundry facility and six apartments. The remaining floors will provide the rental homes. Construction on the $10.5 million complex will begin in May and is expected to be complete after 15 months.

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The groundbreaking for a Karuk Tribal Housing Authority (KTHA) home, Karuk Homes I, was held Jan. 29. The ground breaking was held at the Karuk Tribal Housing Authority offices in Apsuun, Yreka, Calif. This development will include 30 single-family homes, one of which will be reserved for an on-site manager. There will be 15 three-bedroom rental homes, 13 four-bedroom homes and two five-bedroom homes. Also included in development plans will be two community playground facilities and two community garden areas. Funding included KTHA Indian Housing Block Grant funds, while the California Tax Credit Allocation Committee provided $8.8 million in federal LIHTCs and nearly $3.4 million in state LIHTCs. Construction costs are expected to total $11.4 million.

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The grand opening of Harbour View Apartments in Richmond, Calif., was held in late January. The four-story property features 61 apartments, with 50 one-bedroom and 12 two-bedroom apartments. Amenities include a community room with kitchen, a craft room, a reading lounge and an exercise room. The California Tax Credit Allocation Committee (CTCAC) provided $6.3 million in federal LIHTCs and $13 million in tax-exempt bonds. The bonds were issued in two series with Mechanics Bank directly purchasing $9 million of the senior series and a private investor purchasing $4 million of the junior series. Construction costs totaled $17 million.

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WNC, a national investor in real estate and community development initiatives, announced Jan. 28 the closing of WNC Institutional Tax Credit Fund 41 LP (WNC Corp. 41). The $114.7 million institutional LIHTC fund included 1,674 affordable apartments. WNC Corp. 41’s portfolio consists of 24 family and senior housing communities, scheduled for new construction and rehabilitation, and the properties are/will be located in 11 states: Arkansas, California, Louisiana, Minnesota, Missouri, Montana, New Mexico, Tennessee, Texas, Washington and Wisconsin.

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The Michigan State Housing Development Authority announced Jan. 25 the award of more than $11.7 million in federal LIHTCs to six developments in the Metro Detroit area. A total of 1,077 units of affordable rental housing will be constructed or rehabilitated for low- to moderate-income individuals and families. American Community Developers Inc. received $1.3 million in LIHTCs for Central Towers Apartments, Detroit. 28 Grand River Developer LLC received $1.4 million in LIHTCs for 28 West Grand River Detroit. Community Housing Network Inc. received 1.5 million in LIHTCs for Jefferson Oaks, Oak Park. Southwest Housing Solutions Corp received $717,043 in LIHTCs for Mack Ashland II, Detroit. Community Outreach Services Corporation received $772,784 in LIHTCs for Restoration Towers, Detroit. Community Housing Network Inc. received $280,592 in LIHTCs for Unity Park Rentals II, Pontiac.

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On Jan. 28, KeyBank announced a $28.7 million investment in the Cambray Court Apartments in Gouverneur, N.Y. KeyBank provided $8.9 million in LIHTC equity, $1.4 million in state LIHTC equity, a $9.9 million bridge loan and a $8.5 million construction loan. The 71-apartment affordable housing property will be redeveloped in partnership with Omni Housing Development LLC. The redevelopment will replace 72 flood-threatened garden-style apartments. Cambray Court Apartments will provide services for tenants in need of in-home care, with a preference given to the frail elderly and veterans. Of the 71 units, 52 will be set aside for those earning 30 to 50 percent or less of the AMI, 13 apartments will be set aside for those earning at or below 60 percent of the AMI, five apartments will be set aside for those earning 80 percent of the AMI, and one apartment will be set aside for those earning 90 percent of the AMI. Amenities will include a community room with a kitchen, laundry facilities on each floor, walking trails, a patio and a garden.

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Boston Capital announced Feb. 3 the investment in the construction of two affordable apartment communities for families. The two properties are Layton Square Apartments in Cudahy, Wis., and Willis Avenue Apartments in Perry, Iowa. Layton Square Apartments is a 57-unit mixed development that will feature 21 one-bedroom and 27 two-bedroom garden-style apartments, as well as nine three-bedroom, townhouse-style apartments in a four-story building. Of these, 14 will be set aside for residents at 30 percent of the AMI and will be made available to veterans and individuals or families who have permanent developmental, physical, sensory, medical or mental health disabilities, or a combination of impairments that make them eligible for long-term care services. The remaining seven apartments will be reserved as market-rate. Amenities will include a 1,500-square-foot community room with kitchen and a fitness center. Willis Avenue Apartments is a 38-unit apartment community that features 17 one-bedroom and 17 two-bedroom garden-style apartments, as well as four four-bedroom townhouse apartments in a three-story building. Of these apartments, six will be available to families with incomes at or below 40 percent of the AMI, and four apartments will be available to families with incomes at or below 30 percent of the AMI. The remaining four units will be available to residents at market rates. Amenities will include a community room and a computer center. Apartments at both developments will be available to families earning 60 percent or less of the AMI. The construction of Layton Square Apartments and Willis Avenue Apartments is expected to produce $10.2 million in local salaries and create nearly 110 jobs.

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Alden Torch Financial held the groundbreaking Feb. 1 of Tays South Community. The redevelopment of the El Paso, Texas, property includes 198 newly constructed garden-style apartments for low-income families. Amenities will include a clubhouse and children’s play area. The redevelopment of the 1941 building is part of the Chamizal Neighborhood Revitalization Strategy adopted by El Paso City Council, which includes the demolition of 81 existing public housing units. The Texas Department of Housing and Community Affairs (TDHCA) awarded $13.6 million in federal LIHTCs for the $30 million development, which is scheduled for completion by the end of 2016.

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Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc. (Enterprise), announced the closing of $5.3 million and $3.1 million Loans for Creekwood Village Apartments and Wood Valley Apartments, respectively. Creekwood Village Apartments is a 121,200-square-foot residential development in Tuscaloosa, Ala. The property includes 19 residential buildings with 124 apartments, 122 of which receive rental assistance under a Section 8 Housing Assistance Payment Contract and two of which are used for the Boys and Girls Club and a daycare center. Wood Valley Apartments is residential development located in Thomasville, Ga., an area in Thomas County driven largely by manufacturing and small businesses with more than 120 industrial firms operating in the county. The property consists of 88 apartments, all of which receive rental assistance with a Section 8 Housing Assistant Payments contract. Financing for the properties, both multifamily affordable housing developments, was arranged through Freddie Mac for LEDIC Realty Company LLC.

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The Montana Board of Housing provided the Housing Authority of Billings with $3.4 million in LIHTC allocation Jan. 19 for the development of Red Fox Apartments. Red Fox will provide 15 one-bedroom and 15 two-bedroom apartments for low-income families. Construction will start this spring and is expected to be completed by summer 2017. In addition, Cascade Ridge II in Great Falls received nearly $320,000, North Star in Wolf Point received nearly $5.6 million, Big Sky Villas in Belgrade received nearly $2.7 million, Little Jon in Bigfork received nearly $2.6 million, Freedom Path in Fort Harrison received nearly $6.7 million and Valley Villas I and II in Hamilton received nearly $5.6 million. The Montana Board of Housing received 19 applications requesting $26.9 million in LIHTCs.

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Cinnaire held the ribbon-cutting ceremony Feb. 26 for Montclare Senior in Chicago. The 120-apartment mixed-income property comprises with 108 affordable housing units and 12 market-rate apartments. The six-story building will provide studio style and two-bedroom apartments, as well as a common dining area, a library and computer center, a wellness center and a physical therapy room. Montclare Senior will occupy approximately 4 acres of land and will be located on a site approved under the Illinois Supportive Living program, which provides elderly or people with physical disabilities with housing and accompanying services such as laundry, housekeeping, transportation, health monitoring and a wellness programs. Cinnaire provided more than $10 million in LIHTC equity for the construction of Montclare Senior. Additional sources of financing included a $12.3 million permanent loan from LOVE Funding, Great Lakes Capital Fund (GLCF) Fund 28 provided an equity bridge loan of $10.5 million, Midland States Bank provided a $1.2 million bridge loan, and the city of Chicago is providing HOME funds in the amount of $3 million.

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PEOPLE IN THE INDUSTRY

On Feb. 16 the National Low Income Housing Coalition (NLIHC) announced the appointment of Diane Yentel as president and chief executive officer of the organization. Yentel was the vice president of public policy and government affairs of Enterprise Community Partners. Before that, she worked at the U.S Department of Housing and Urban Development (HUD) in the Office of Public and Indian Housing, and as a senior domestic policy advisor for Oxfam America. She started her career with NLIHC as a policy analyst in 2005. Yentel will replace Sheila Crowley, who is retiring. The transition will take place this month.

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City Real Estate Advisors, Inc. (CREA) announced Feb. 9 the appointment of Jason Racine as vice president of acquisitions for the Midwest region. Racine will be responsible for identifying, structuring and closing affordable housing equity opportunities throughout the Midwest. He will be based in CREA’s Indianapolis office. Racine has worked in affordable housing finance since 2007 and he is a licensed attorney and CPA in Illinois.

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Cinnaire announced the promotion of Susan Frank to senior vice president Feb. 19. Frank joined Cinnaire in March 2014 as vice president, business development, and was recently promoted to senior vice president, business development. As senior vice president of Cinnaire, Frank is responsible for directing and implementing the company’s growth strategy in the mid-Atlantic region. In addition, she is involved in initiatives to expand the availability of lending products. Before joining Cinnaire, Frank was director in Fannie Mae’s Multifamily and Community Lending divisions, was executive director of the Delaware State Housing Authority and was a legislative advisor to then-Rep. Tom Carper on housing and banking issues.

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Enterprise Community Partners Inc. (Enterprise) announced Feb. 10 the promotion of Jacqueline Waggoner to vice president and Southern California market leader. In her new role, Waggoner leads local efforts to create and preserve affordable housing. Waggoner recently served as deputy director of the Southern California office. She has also worked with the city of Los Angeles, banks and nonprofit developer partners to create local funds for affordable housing, advocate for low-income families and support Enterprise’s vision of providing communities of opportunity. Waggoner serves on the board of directors for the Southern California Association of Non-Profit Housing and the board of trustees for Kids Progress Inc. (KPI), an organization created by the Housing Authority of the City of Los Angeles to provide social, health, educational and work opportunities to children and youth living in public housing communities.

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Conifer Realty LLC announced Feb. 8 the promotions of John Giannuzzi to senior vice president and Sam Leone to regional vice president. Giannuzzi joined Conifer in 2009. Leone joined Conifer in 2007 after working as a finance officer for the New Jersey Economic Development Authority (NJEDA). In addition, Patricia Denny was promoted to director of asset management on Feb. 11. Denny joined Conifer in 2012.

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BONDS

The Kentucky Housing Corporation (KHC) announced that the 2016 tax-exempt bond open window application is available. KHC announced in a press release that it is now accepting applications for multifamily projects using tax-exempt bonds in an effort to increase the use of tax-exempt bonds and private investment in affordable multifamily housing, as well as to stimulate the construction or rehabilitation of quality affordable rental housing. Applications must be submitted through the Universal Funding Application System, and will be accepted on an open window basis through Dec. 29.