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Low-Income Housing Tax Credits News Briefs – April 2019

Ben Carson, secretary of the U.S. Department of Housing and Urban Development (HUD), announced Feb. 21 his pledge to work with homebuilders to tackle the nation’s affordability crisis. During his address to the National Association of Home Builders board of directors during its annual meeting in Las Vegas Feb. 19-21, Carson announced that HUD’s Office of Multifamily Housing programs is expanding the Low Income Housing Tax Credit pilot program into the agency’s New Construction and Substantial Rehabilitation loan products. This is expected to make it easier for builders to use FHA-insured loans to finance low-income housing tax credit developments. As chairman of the White House Opportunity and Revitalization Council, Carson spoke about opportunities for builders and other private sector participants to invest in opportunity zones (OZs). Developers may use a qualified opportunity fund to help finance developments that could help increase residential housing within OZs.

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The Office of the Comptroller of the Currency (OCC) released Feb. 27 the schedule of Community Reinvestment Act evaluations for national banks and federal savings associations for the second and third quarters of 2019. The OCC encourages public comments on the institutions and suggests that the comments be submitted to the institutions themselves or to the appropriate OCC supervisory office before or as early as possible during the scheduled month. The schedule is available at www.novoco.com/cra.

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The OCC released March 6 a list of 13 national banks, federal savings associations and insured branches of foreign banks that received Community Reinvestment Act evaluations in February. Ten were rated satisfactory, two were rated outstanding and one was rated as needs to improve. This list, and other evaluations, are available at www.novoco.com/cra.

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BRIDGE Housing announced Feb. 14 a $6.2 million award from the Capital Magnet Fund. BRIDGE Housing will use the award as a revolving source of predevelopment, acquisition and bridge financing for its affordable housing and community development work in areas of economic distress. BRIDGE is one of 38 organizations nationwide to receive funding under the Capital Magnet Fund program. 

LIHTC State

Legislation introduced in the Ohio Legislature Feb. 12 would require subsidized residential rental property to be valued by county auditors according to the market-rent value, not the contract-rent value. S.B. 36 specifically includes low-income housing tax credit (LIHTC)-financed property, which would increase the property tax for LIHTC property. The bill was assigned Feb. 20 to the Senate Ways and Means Committee. A copy of the bill is available at www.taxcredithousing.com.

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The Kentucky Housing Corporation (KHC) awarded the 2019 round of LITHC awards Jan. 31. KHC received 30 applications requesting more than $21 million in LIHTCs. Nineteen developments were funded with $13.7 million in LIHTCs, as well as $2.1 million in HOME Investment Partnerships program funds and $1.5 million of Affordable Housing Trust Fund resources. Awards ranged from $259,191 to $1.2 million.

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The California Tax Credit Allocation Committee released final proposed regulation changes in late February concerning LIHTC properties affected by the partial shutdown of the federal government. The revisions include an adjustment from 45 additional days to 60 additional days for developments that committed to complete financing within a designated period for maximum scoring in 2018 second-round tax credit awards–if their funding was impacted by the shutdown. The revisions also includes a clarification that the timetable and explanation of how the development was affected must be in written format.

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The Colorado Housing and Finance Authority (CHFA) announced $6 million in Capital Magnet Fund (CMF) grants March 4 to support the development and preservation of affordable rental housing throughout Colorado. CHFA was one of three housing finance agencies to receive an award among 38 recipients nationwide. CHFA will use the award to enhance its existing statewide housing fund created with a $7.1 million 2018 CMF grant. With this grant, a minimum of 75 percent will be invested in areas of economic distress, while at least 66 percent of all affordable rental homes supported will serve households at or below 50 percent of the area median income.

LIHTC Dealmaker

Boston Capital announced Feb. 20 its investment in the renovation of San Pablo Hotel in Oakland, Calif. San Pablo Hotel provides 144 apartments to seniors 55 or older. Built in 1907, the hotel was converted to affordable senior rental housing in 1994 through the Low-Income Housing Tax Credit (LIHTC) program. There are 110 single-room occupancy apartments and 30 studio apartments for seniors earning at or below 30 percent of the area median income (AMI). Additionally, there are two studio apartments for residents earning at or below 40 percent of AMI, as well as two manager-occupied apartments. The renovation will include the expansion of the property’s community space, which includes a leasing office, supportive service coordinator, community room with kitchen, computer room and laundry rooms. Additional community amenities include an outside patio and community garden. 

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The Massachusetts Housing Finance Agency (MassHousing) announced $38.7 million in financing Feb. 25 to Inquilinos Boricuas En Accion Inc. (IBA) for the redevelopment and preservation of West Newton Apartments in Boston. IBA will modernize the West Newton Apartments under the U.S. Department of Housing and Urban Development’s (HUD’s) Rental Assistance Demonstration (RAD) program. The $29.5 million renovation will include extensive exterior masonry and carpentry work, roofing repairs and apartment upgrades. The West Newton Apartments feature 146 apartments, with 44 studio apartments, 58 one-, 20 two-, 11 three-, 12 four- and one five-bedroom apartment(s) in 28 wood-framed, townhouse-style buildings. Of the 146 apartments, 110 will be supported through HUD’s RAD program and the remaining 36 apartments will be supported by a project-based Section 8 Housing Assistance Payment contract. MassHousing provided IBA with a $7.7 million construction and permanent loan, as well as a $30.9 million tax-exempt bridge loan. The MassHousing financing also generated $22.9 million in LIHTC equity. Additional financing includes approximately $11.8 million in federal and state historic tax credit equity, a $24 million seller note, a $3.9 million sponsor contribution and a $977,000 deferred developer fee.

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Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise) announced Feb. 11 a $19 million loan to finance The Curve Apartments in Moore, Okla. The new development will be on the 14-acre site of the former Royal Park mobile home community, which lost approximately 200 homes after a 2013 tornado disaster. There will be three buildings with 244 apartments, of which 219 will be affordable and 25 will be available at market rate. There will also be 4,650 square feet of commercial/retail space. Amenities will include green space, a business center, fitness center, swimming pool and communal barbecue area. Development costs are expected to be more than $49.9 million. Additional financing includes a $16 million subsidy provided by the Community Development Block Grant-Disaster Recovery fund. 

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The Michaels Organization announced Feb. 14 the closing on $61 million for Mission Trail at El Camino Real in San Marcos, Texas. The new mixed-income workforce housing property will be located on 30 acres and will comprise 15 garden-style buildings with 352 rental apartment homes. There will be one- to four-bedroom apartments, with community amenities to include a clubhouse with pool, fitness center and business center. The majority of apartments will be reserved for households earning 60 percent or less of the AMI. Ten percent of the apartments will be reserved for individuals and families earning less than 140 percent of the AMI. The community will also offer 35 apartments without any income restrictions. Financing for the development includes $43 million in tax-exempt bond financing issued by Capital Area Housing Finance Corporation, as well as $15.5 million in LIHTC equity from U.S. Bank, who also provided the construction loan. A groundbreaking ceremony is planned for spring, with pre-leasing scheduled for this coming fall.

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CHN Housing Partners, together with Lakewood Senior Citizens Inc., held a ribbon-cutting ceremony Feb. 26 for Westerly Apartments in Lakewood, Ohio. There are 492 apartments in three buildings, available to seniors. The Ohio Housing Finance Agency provided $10 million in 2016 LIHTCs, and additional financing was provided by the Ohio Capital Corporation for Housing, Ohio Capital Finance Corporation, Ohio Capital Impact Corporation, KeyBank, Federal Home Loan Bank of Cincinnati, Forest City Capital Corporation, HUD, National Park Service and Cuyahoga County. 

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Red Stone Equity Partners LLC (Red Stone Equity), announced Feb. 25 the second and final closing of Red Stone Equity–2018 CA Regional Fund LP (CA Fund). The $74-million multi-investor LIHTC investment fund included investments from eight institutional investors. The CA Fund’s proceeds will be used to finance the construction and/or rehabilitation of seven affordable housing properties in suburban, urban and rural areas of California. The properties will be located within the cities of Antioch, Goshen, Oakland, Redding, San Diego, San Luis Obispo and Stockton. There will be 517 high quality affordable homes to low-income households throughout California.

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Regions Affordable Housing announced Feb. 8 the partnership with developers Dharma Development, LKC Development and Hill Tide Development, on the construction of Legacy Trails of Lindale in Lindale, Texas. The mixed-income affordable apartment complex will be available to seniors. Legacy Trails of Lindale will be built on a 5-acre parcel and will comprise nine residential buildings with 76 apartments. Amenities will include a clubhouse with fitness center, furnished community room and a gazebo. Regions Affordable Housing provided $7 million in LIHTC equity, as well as the construction and equity bridge loans and secured Fannie Mae permanent financing. Construction is expected to be complete this fall. 

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The groundbreaking for 4400 Grove in Chicago was Feb. 20. Plans for the mixed-income property include two four-story buildings with 84 apartments. There will also be street-level retail space, a public plaza and landscaped park space. Common-area amenities will include a large community room with kitchen, a fitness and yoga room, a shared work center with computers, and indoor bicycle parking. Financing includes $17.8 million in LIHTC equity and $7.2 million in tax increment financing. The development is a result of a public-private partnership between the Chicago Housing Authority, co-developers Brinshore Development and Michaels, U.S. Bancorp and other lenders. Occupancy is expected in spring 2020. 

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Fifth Avenue Committee Inc. and Brooklyn Public Library announced Feb. 6 the groundbreaking of an expanded library and affordable housing in Brooklyn. Developed in partnership with the New York State Homes and Community Renewal, the property will provide a state-of-the-art public library and 49 affordable apartments. The new library will occupy more than 20,000 square feet of the new building. The apartments above the library will include a mix of studios, one-, two-, and three-bedroom apartments and will be affordable to tenants earning 30 to 80 percent of the AMI. Financing includes $11 million in LIHTC equity and $60,000 in solar investment tax credits. Construction is expected to be complete December 2020.

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The ribbon-cutting ceremony for the opening of Boston Way was March 1. The affordable housing property in Asbury Park, N.J., will provide 104 apartments in a townhouse-style complex. Construction cost were $28 million, helped by $15 million in LIHTCs as well as $12.3 million from HUD and a $700,000 loan to the Asbury Park Housing Authority.

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Henderson, Ky., officials announced Feb. 8 the planned transformation of historic Audubon School into affordable senior housing. Equal Development LLC and the Olynger Corporation will reuse a portion of the existing façade for the construction a new three-story elevator building. There will be 49 apartments, with 30 one- and 19 two-bedroom apartments. The 1906 building will also have approximately 1,500 square feet of common area. Development financing includes $7 million in LIHTC equity, with construction cost of $8.3 million.

LIHTC People

BRIDGE Housing announced Feb. 21 that Adrienne E. Quinn was elected to the BRIDGE Housing board of directors. Quinn is a distinguished practitioner at the University of Washington Evans School of Public Policy and Governance, where she teaches executive leadership, managing people in nonprofit and public agencies, and homelessness and social justice. Previously, she was director of King County Department of Community and Human Services. Before that, she worked as the executive director of the Medina Foundation, was vice president of public policy and government relations for Enterprise Community Partners, was director of Seattle’s Office of Housing and was a law partner at Buck & Gordon LLP.

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RBC Capital Markets announced Jan. 30 three new appointments to its tax credit equity group. Dan Kierce was appointed as managing director. He is responsible for originating, structuring and negotiating low-income housing tax credit investments in the central region, with a particular focus on Texas. Kierce joined RBC in 2003. Eric Moody was promoted to managing director–underwriting. He joined RBC in 2006 and currently has oversight of all aspects of lower-tier closings, management of underwriting staff and relationship coverage of select investor clients. Before RBC, he was an underwriter within Wachovia’s Tax Credit Investment Group. Tammy Thiessen was appointed to managing director-equity sales. In this role, she manages the equity sales team, originates and manages both multi-investor fund and proprietary investor client relationships and oversees all aspects of the fund closing process. She joined RBC in 2004.

Journal Category:

Low-Income Housing Tax Credits

Authors:

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