Low-Income Housing Tax Credits News Briefs - August 2015

Saturday, August 1, 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

The Joint Center for Housing Studies of Harvard University (JCHS) released the report, “The State of the Nation’s Housing 2015” June 24. JCHS provides an assessment of the state of the rental and homeownership markets in its annual report. Also provided are economic and demographic trends influencing housing demand, as well as the state of mortgage finance and ongoing housing affordability changes. According to the report, the lack of affordable housing in the United States continues to leave nearly 600,000 people homeless. JCHS also noted that since the private sector cannot profitably supply very low-cost units, the government must play a critical role in ensuring that the nation’s most disadvantaged families and individuals have good quality, affordable housing. In addition, JCHS stated that on average, severely cost-burdened households in the bottom expenditure quartile (a proxy for “low income”) spent almost three times as much on housing in 2013 as those living in affordable housing. The report is available at www.jchs.harvard.edu.

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The Federal Housing Finance Agency (FHFA) released its annual report, “2014 Report to Congress,” June 15. The report reviews the FHFA’s examination of Fannie Mae, Freddie Mac, the 12 Federal Home Loan Banks and the FHLBanks’ Office of Finance. The report also provides details about the agency’s regulatory guidance, research and publications. The report is available at www.taxcredithousing.com.

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The Office of the Comptroller of the Currency (OCC) released Community Reinvestment Act (CRA) performance evaluations July 7. Evaluations were performed on national banks, federal savings associations and insured federal branches of foreign banks. A total of 21 evaluations were released, and of these evaluations, eight rated outstanding, 12 rated satisfactory, one rated as needs to improve and none rated substantial noncompliance. The evaluations were for the period of June 1 to June 30.

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On July 1, Bellwether Enterprise Real Estate Capital LLC announced the successful acquisition of Capital Advisors Inc., a privately held, full-service mortgage banking firm. The acquisition adds more than $1 billion in annual loan volume and $1.75 billion in servicing to Bellwether Enterprise. The acquisition also brings the firm’s total annual loan volume to more than $4.5 billion and its servicing portfolio to $10.2 billion. Capital Advisors’ 31 employees have been retained, as have the organization’s business practices.

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The Internal Revenue Service (IRS) released IR-2015-88 June 15, announcing that all empowerment zone designations remained in effect through the end of 2014. The announcement primarily affects businesses that would benefit from claiming the tax incentives for empowerment zones on their 2014 returns, either original or amended. The IRS issued Notice 2015-26 in March, providing that any nomination for an empowerment zone in effect Dec. 31, 2013, will have a new termination date of Dec. 31, 2014, unless the governing state or municipality declined the extension in a notification to the IRS. No state or municipality contacted the IRS to decline the extension. The notice is available at www.taxcredithousing.com.

STATE BRIEFS

The California Supreme Court decided unanimously June 15 that cities and counties can require developers to provide below-market-rate housing as a condition of a building permit. In California Building Industry Association v. City of San Jose, the state’s Supreme Court cited an affordable housing crisis of epic proportions as the reason for the ruling. The decision was based on a 2010 case involving a San Jose housing policy that required that some new residential developments set aside 15 percent of their units for sale at below-market rent. The court ruled that local ordinances requiring units to be set aside at below-market rates were constitutional. The ruling applies to housing for sale, not for rent. The ruling is available at www.taxcredithousing.com.

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North Dakota H.B. 1014 was signed into law June 16. The bill increases the aggregate amount of credits allowed to eligible North Dakota Housing Finance Agency’s Housing Incentive Fund (HIF) contributors and sets the origination fee for HIF project awards. The bill provides that the maximum amount of corporate and personal income tax credits available to all eligible HIF contributors is $30 million for the first two taxable years beginning after Dec. 31, 2014. The limit was previously $20 million and this amount was only available only through tax year 2014. In addition, the bill provides that the origination fee assessed to grant recipients may not exceed 5 percent of the development award. North Dakota H.B. 1014 is available at www.taxcredithousing.com.

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The Tennessee Housing and Development Agency (THDA) released the report, “Tennessee’s Low Income Housing Tax Credit Program” June 15. The report describes the characteristics of properties developed through the LIHTC program over time. Also discussed is the relationship to state and federal policy priorities, as well as the relationship to market and investment conditions. The report discussed type and size of developments, unit mix within developments, location and spatial characteristics of developments. Comparisons of how the program has evolved are also included. This is provided by separating the program into three time periods: 1987-1992 (pre-permanent authorization period), 1993-2002 (early years) and 2003-2013 (later years). THDA anticipates the release of a second report evaluating the tenant characteristics of the LIHTC program in Tennessee. The report is available at www.taxcredithousing.com.

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The Ohio Housing Finance Agency (OHFA) announced its 2015 LIHTC awards June 18. More than $30 million in LIHTCs were allocated to 40 developments. OHFA had more than 100 applicants seeking nearly $77 million in LIHTCs. The awards will provide more than 2,500 units of affordable housing across the state. The award listing is available at www.taxcredithousing.com.

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The California Franchise Tax Board (FTB) released its updated frequently asked questions (FAQ) for the California Competes Tax Credit (CCTC) June 15. The FAQ provides information on general credit information, credit use, CCTC reviews and reaches and recapture. The FAQ also now includes contact information. More information is available at www.ftb.ca.gov.

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DEALMAKERS

WNC announced June 17 the completed renovation of two affordable housing communities near Tupelo, Miss.–Regal Ridge Apartments and Wisteria Apartments. The national real estate and community development investor provided $3.3 million in low-income housing tax credit (LIHTC) equity to fund renovations. Regal Ridge Apartments provides 24 two-bedroom units of affordable housing in six buildings. Amenities include on-site property management, laundry facilities, a computer center, a gazebo and a playground. Wisteria Apartments provides 30 units of affordable housing for low-income families. The property includes 10 one-bedroom units and 20 two-bedroom units in five one- and two-story residential buildings.

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Christian Church Homes (CCH) announced June 24 the closing of the $14.4 million financing transaction for Hatler May Village, a senior housing community in Colorado Springs, Colo. The Colorado Housing Finance Agency provided an award of $1.22 million in annual LIHTCs; the National Equity Fund provided $11.9 million in LIHTC equity; Colorado Springs provided $500,000 and $300,000 was provided by the state. Construction is slated for completion by summer 2016.

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On June 16, Boston Capital announced its investment in the development of Post Oak Apartments in McKinney, Texas. The 182-unit apartment community for individuals and families will be constructed with LIHTC equity. Of the 182 units, 130 homes will be available to families and individuals earning 60 percent or less of the area median income (AMI). The remaining 52 units will be offered at competitive market rents. There will be six, four-story buildings with 56 one-bedroom, 94 two-bedroom and 32 three-bedroom units. Amenities will include a barbecue area and a clubhouse building with a fitness center, a business center, a common laundry facility and community rooms with a kitchen. The development of Post Oak Apartments is expected to yield $19.7 million in local salaries and create more than 200 new jobs.

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MassHousing announced June 30 a $3.7 million permanent loan and $1 million from the Affordable Housing Trust Fund (AHTF) for the construction of Island Creek Village North in Duxbury, Mass. This development is the third phase of the Island Creek Development and will be built next to Island Creek Village East and West. The affordable housing community will provide 90 one-bedroom apartments and four two-bedroom apartments in a four-story building. Of the 94 units, 19 will be reserved for residents with incomes at or below 50 percent of the AMI. The remainder will be available to residents age 55 and older earning at or below 60 percent of the AMI. Construction is expected to be complete in 2016. Beacon Communities is also planning an additional phase of development, which will provide 120 units of mixed-income housing.

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Enterprise Homes announced June 25 the reopening of Westminster Overlook, an affordable apartment community in Westminster, Md. Previously named Locust House Apartments, Enterprise Homes acquired the seven-story building and performed a complete renovation. Financing for the renovation included $3.3 million in LIHTCs, with funding from the state of Maryland Rental Housing Works and Partnership Rental Housing funds, a Maryland tax-exempt bond and a Federal Housing Administration (FHA)-insured permanent loan from Wells Fargo Bank. Renovation costs were $14.8 million. Westminster Outlook consists of 98 one-bedroom units available to seniors and adults with disabilities. Renovations included full upgrades to the building’s systems and modernization of its kitchens, bathrooms and common areas. Enterprise Homes also added green features to the property.

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Mill Street Partners held the groundbreaking for the redevelopment of Mill at Middletown June 24. The three-story former factory building in Middletown, N.Y., will be converted into a 42 units of workforce housing thanks to $8.7 million in LIHTCs from the New York State Homes and Community Renewal. Additional financing includes a $7.4 million construction loan from the Community Preservation Corporation, a $1.7 million loan through the Housing Trust Fund, a $600,000 grant from the Orange County’s HOME Program, $820,000 from the Federal Home Loan Bank and $91,000 from the Urban Initiative. Built in the late 19th century as a silk hat factory, the main building will now include 17 one-bedroom units, 22 two-bedroom units and three three-bedroom units. The front portion of the main building will house a café and a job training program run by local nonprofit Regional Economic Community Action Program (RECAP). In addition, one of the original factory’s secondary buildings will also be converted into a community hall for residents. All units will be available to families earning between 30 and 50 percent of the AMI.

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On June 25, the Union Labor Retirement Association (ULRA) announced $44 million for the preservation of Union Manor in Westmoreland, Ore. Funding comes in the form federal and private sources, including the U.S. Department of Housing and Urban Development (HUD), J.P. Morgan Chase and PNC Financial Services Group (PNC). Oregon Housing and Community Services (OHCS) provided $1,422,016 in annual LIHTC allocation and a $29.4 million bond. Renovations for the seven-story Union Manor will total $30.2 million. Renovations will include replacing and improving the building’s energy efficiency, fire safety, accessibility and seismic resistance. Union Manor is on 6.6 acres and provides 284 affordable housing units to seniors. The renovation was one of 12 to be awarded federal rent subsidies through the initial round of HUD’s Senior Preservation Rental Assistance Contract program, which is designed to prevent displacement of elderly residents.

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The New Mexico Mortgage Finance Authority announced $1.15 million for the development of Casa Feliz, the second phase of Plaza Feliz Apartments in Southeast Heights Albuquerque, N.M. The second phase will provide 12 buildings in nine locations. A total of 85 units will be built. Amenities will include a playground, a day care center, a barbecue area and a basketball court.

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On June 19, the Illinois Housing Development Authority announced the award of $12 million in LIHTCs to Bridge Rockford Alliance for the development of 65 affordable housing units in Rockford, Ill. The credit will be awarded in $1.2 million increments for 10 years. The property will be developed on six acres and will replace Fairgrounds Valley.

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On July 6, Hunt Mortgage Group announced a $2.34 million Freddie Mac loan to refinance 19-25 Market Street, a multifamily property in Cambridge, Mass. The property consists of 16 three-bedroom units in a four-story walk-up. Units are available to individuals or families earning 60 percent or less of the AMI.

PEOPLE IN THE INDUSTRY

On June 15, BRIDGE Housing appointed Chris Nicholson vice president of resource development. Nicholson’s responsibilities include leading the organization’s strategy to raise funds to expand the programs serving residents in BRIDGE communities. Before Joining BRIDGE, Nicholson was the director of capital campaign for the University of San Francisco. Before that, he was associate vice president of development and then director of planned giving at the University of San Francisco. He was also the vice president of development at the East Bay Community Foundation. Nicholson’s appointment was effective June 8.

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The Connecticut Housing Finance Authority (CHFA) board of directors announced June 30 the unanimous appointment of Karl F. Kilduff as the new executive director. Previously, Kilduff was town administrator for Darien, Conn. Before that, he was the town manager for North Branford, Conn., and then he was city manager for Johnstown, Pa. Kilduff will assume the role of CHFA executive director in August.

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Pennrose, a national real estate development and multifamily property management company, announced in June the appointment of Kathu Garrone as vice president of compliance. She will be responsible for working with investors, the U.S. Department of Housing and Urban Development (HUD), public housing agencies and other regulatory agencies. Before joining Pennrose, Garrone was director of compliance with NDC Real Estate Management.

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Hunt Mortgage Group announced June 9 the addition of Dana Blair as vice president in the small loan group. Blair will source and originate Freddie Mac and Fannie Mae small loans for clients in the central region of the United States. She will be based in Dallas. Before working with Hunt, she was vice president of apartment lending at Bank Financial. Before that, Blair was assistant vice president, mortgage banker at Gulfshore Bank; senior loan consultant at Washington Mutual; and underwriter-agency, assistant vice president at Key Bank Real Estate Capital.