Low-Income Housing Tax Credits News Briefs - August 2016

Friday, August 5, 2016

Industry Briefs

The Internal Revenue Service (IRS) released a notice June 21 announcing that all empowerment zone designations will remain in effect through Dec. 31. This new end date applies to all empowerment zone designations that were in effect Dec. 31, 2014. The announcement primarily affects businesses that would benefit from claiming the tax incentives for empowerment zones on their 2015 returns, either original or amended, and 2016 returns. Empowerment zones are certain urban and rural areas where employers and other taxpayers qualify for special tax incentives. The notice is available at www.taxcredithousing.com.

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On June 17, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) jointly released the 2016 list of distressed or underserved nonmetropolitan middle-income geographies where revitalization or stabilization activities will receive Community Reinvestment Act (CRA) consideration as community development. The agencies apply a one-year lag period for geographies that were listed in 2015 but are no longer designated as distressed or underserved in the current release. The 2016 list can be found on the Federal Financial Institutions Examination Council (FFIEC) website.

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The Federal Housing Finance Agency (FHFA) released its 2015 Report to Congress June 15. The report describes the actions taken by FHFA to carry out its statutory responsibilities. Results indicated that Fannie Mae and Freddie Mac both exceeded their goals. For low-income multifamily units, the lending benchmark for Fannie and Freddie was 300,000 units. Fannie served nearly 310,000 units and Freddie served nearly 380,000 units. For very-low-income multifamily units, the benchmark for both enterprises was 60,000 units. Fannie served nearly 70,000 units and Freddie served nearly 80,000 units. The 2015 results are based on the information Fannie and Freddie reported in March. The figures will be updated later this year when Home Mortgage Disclosure Act (HMDA) market data becomes available. The FHFA report also included a section on the Affordable Housing Program, or AHP. AHP was designed to build and preserve affordable housing for very-low and low- or moderate-income households. In 2015, Federal Home Loan Banks made nearly $270 million in AHP subsidies nationwide. Approximately 70 percent of those properties received additional funding from other federal programs, most frequently, the low-income housing tax credit (LIHTC). The report is available at www.taxcredithousing.com.

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The National Low Income Housing Coalition (NLIHC) released the report May 25, “Out of Reach 2016: No Refuge for Low Income Renters.” The report found that millions of American struggle to find affordable rents. In no state, metropolitan area nor county in the United States can a full-time worker earning the prevailing minimum wage afford a modest two-bedroom apartment, according to the NLIHC. The report also indicated that a worker earning the federal minimum wage of $7.25 per hour would need to work 2.8 full-time jobs, or approximately 112 hours per week for all 52 weeks of the year, to afford a two-bedroom apartment at U.S. Department of Housing (HUD) Fair Market Rent (FMR). NLIHC proposed modest reforms to the mortgage interest deduction, including investing savings into the national Housing Trust Fund (HTF). At least 90 percent of HTF funds must be used to build, preserve or rehabilitate affordable rental housing for this population. NLIHC stated this change could save the federal government more than $20 billion each year. The report is available at www.nlihc.org.

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BRIDGE Housing announced May 18 that it has been selected as a recipient of the Community Progress Makers Fund. The fund is a $20 million grant initiative to support 40 nonprofit organizations in their efforts to establish new approaches to longstanding urban economic challenges in the United States. This includes economic development, affordable housing, environment sustainability and urban infrastructure. Under the program, the nonprofit developer, owner and manager of affordable housing receive a core operating support grant of $500,000 over two years to continue their efforts. BRIDGE Housing plans to use the funds for the development of Potrero in San Francisco and Jordan Downs in Los Angeles. These two public housing developments will be transformed into mixed-income, mixed-use communities with new homes, retail, parks and open space and a network of support services.

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The 22nd Annual Charles L. Edson Tax Credit Excellence Awards were held at the Rayburn House congressional office building June 8 in Washington, D.C. Hosted by the Affordable Housing Tax Credit Coalition, the awards recognize national leaders in affordable housing, celebrating LIHTC developments at the forefront of creating stronger, healthier communities in urban, suburban and rural areas nationwide. The seven categories are metro/urban housing, rural housing, special needs housing, senior housing, green housing, public housing and HUD preservation.

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Bellwether Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced June 23 the closing of $36.6 million for affordable housing in the Chicago metropolitan area this spring. A $9.1 million loan was provided for the refinancing of Thornwood Apartments, a mixed-income, multifamily property in Chicago Heights, Ill. Two acquisition loans, for $16.6 million and $5.3 million, were provided to the Mark Twain Apartments in Chicago. The mixed-use property is a five-story building with 152 single-room-occupancy (SRO) apartments above one floor of retail space. Senior Suites Chicago Corporation also received refinance loans of $5.7 million for five Chicago properties: Senior Suites of Austin, Senior Suites of Belmont Cragin, Senior Suites of Central Station, Senior Suites of Ravenswood and Senior Suites of Garfield Ridge.

State

The Ohio Housing Finance Agency (OHFA) announced the recipients of its 2016 federal LIHTC awards June 15. More than $30 million in federal LIHTCs were awarded to 40 developments that will serve families, seniors and individuals with disabilities in rural, suburban and urban areas. OHFA received 93 applications for more than $71 million in LIHTCs for the 2016 round.

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In late May, five affordable housing developments were awarded LIHTCs through the New Mexico Mortgage Finance Authority (MFA). MFA awarded more than $47 million to the developers. The Rio Vista Apartments in Albuquerque received $9.8 million for the rehabilitation of the 75-apartment complex for seniors and special-needs residents. Tierra Montosa in Taos received $9.8 million for the rehabilitation of 44 apartments and the construction of 26 new apartments. Colonial Hillcrest Apartments in Carlsbad received $8.5 million for the rehabilitation of 76 apartments. Villa Hermosa in Santa Fe received $11.5 million for the rehabilitation of 116 apartments in the affordable senior housing complex. The Pueblo of Acoma received $7.7 million for the new construction of 30 affordable two- and three-bedroom apartments. MFA received applications from 17 developers.

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The California Tax Credit Allocation Committee (CTCAC) approved $466 million June 8 for the construction or rehabilitation of 37 affordable housing developments with 2,162 apartments. In addition, CTCAC awarded 4 percent LIHTCs to finance an additional 850 new or rehabilitated rental homes statewide. Among the winners of the latest round of tax credits awards are Morgan Hill Family in Morgan Hill, with a total of 40 apartments reserved for large families. Courson Arts Colony East in Palmdale, Los Angeles County, with 80 apartments serving large families and artists’ live-work space, Roland Curtis East, Los Angeles, with 69 apartments serving large families and Fullerton Heights, Fullerton, Orange County, with 36 apartments, including housing for the homeless.

Dealmaker

Love Funding announced the closing June 20 of a $19.7 million loan for the construction of The Paddock at Grandview in Nashville, Tenn. The affordable apartment community will provide 240 homes thanks to a loan through the U.S. Department of Housing and Urban Development’s (HUD) 221(d)(4) loan insurance program. Financing for The Paddock of Grandview also includes $1.7 million in HUD’s HOME Investment Partnerships Program funds, $12 million in low-income tax credits (LIHTCs) financed by R4 Capital and $2 million in developer equity. The property will include 10 three-story residential buildings and a one-story clubhouse. Homes will be reserved for families earning 60 percent or less of the area median income (AMI). Development is expected to cost $34 million and be complete in June 2017.

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Holliday Fenoglio Fowler LP (HFF) announced the completed transactions June 15 for a 31-property affordable housing Florida portfolio. HFF closed on a $563.5 million sale with Starwood Property Trust for the portfolio and secured financing totaling $255.9 million through Freddie Mac’s Capital Markets Execution program for 19 properties. The securitized loans will be serviced by HFF through its Freddie Mac Program Plus Seller/Servicer program. The portfolio, which is concentrated in Orlando and Tampa, was developed between 1995 and 2004, and will provide 8,498 affordable homes.

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The Woda Group Inc. announced June 9 the successful lease-up of Butler Crossing in Kingstree, S.C. The 40-home townhouse community was leased by the Woda Management & Real Estate LLC in 23 days. The South Carolina State Housing Finance and Development Authority allocated LIHTCs and provided a $700,000 HOME loan. City Real Estate Advisors Inc. raised $6 million in LIHTC equity.

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Wells Fargo and Company announced a $22.7 million investment May 18 for the redevelopment of Waterman Gardens in San Bernardino, Calif. Wells Fargo provided $8.8 million in construction-to-permanent financing through HUD’s Section 221(d)(4) program, and provided $13.9 million in LIHTC equity. Waterman Gardens is undergoing a multiphase transformation. This latest phase included the construction of 62 affordable, garden-style apartments by National Community Renaissance. This will replace 19 one- and two-story townhomes and a maintenance building. The development is part of HUD’s Rental Assistance Demonstration (RAD) program. Financing also included HOME funds from the city of San Bernardino and a development loan and ground lease from the Housing Authority of San Bernardino.

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On June 17, Conifer Realty announced the grand opening of The Meadows in Atlantic City, N.J. The 90-home affordable rental apartment community is available to workforce families in Atlantic County. The New Jersey Housing and Mortgage Finance Agency (HMFA) provided 4 percent LIHTCs for the development, which are expected to produce more than $9.9 million in private equity and $14.6 million in construction and permanent financing. Additionally, more than $5.7 million in federal Community Development Block Grant (CDBG) Disaster Recovery funding was provided through the Fund for Restoration of Multifamily Housing (FRM) program. The Meadows provides one-, two- and three-bedroom townhomes on an 80,000-square-foot lot. Amenities include a community garden, a fitness room and a computer lab. Constructions costs were nearly $28 million and HMFA estimates that The Meadows has generated more than $44 million in one-time economic output. Development supported approximately 265 direct and indirect/induced full-time equivalent jobs, and created more than $1.6 million in state and local taxes.

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Rehabilitation plans for the former Imperial Knife Factory in Olneyville, R.I., moved forward May 19. The Rhode Island Housing Board of Commissioners approved a preliminary financing package for developers who plan to transform the 1923 mill into 60 apartments at the brownfields site. The board approved a plan to reserve $900,000 in 2016 LIHTCs, which will be distributed over a 10-year period, and gave preliminary approval to a 24-month construction loan of $15 million, a HOME loan of $500,000, a Housing Preservation & Production Loan of $500,000 and a permanent loan of $170,000. The developers plan to build 54 affordable and six market-rate apartments, including a mix of studio, one-bedroom, two-bedroom and three-bedroom rental homes. The Imperial Knife Factory is part of an ongoing revitalization effort, the Build Olneyville Plan, which aims to improve the Manton Heights Public Housing development and the surrounding neighborhood. The projected cost is $17.3 million.

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On May 16, Gardner Capital Development received $1.14 million in 4 percent LIHTCs over 10 years for the development of Alameda View Apartments in Aurora, Colo. Developer Gardner Capital Development also received $771,750 in state LIHTCs over a 10-year period from the Colorado Housing and Finance Authority (CHFA) for the 116-home property. Aurora HOME funds will provide additional financing. The property will provide one- two- and three-bedroom apartments for families. All apartments will be available to residents earning a mix of 30, 50 and 60 percent of the AMI. When completed, the 3.7-acre development will offer residents amenities such as a resource center where DeLaney Farm educators can offer community presentations, agricultural demonstrations, cooking classes and education programs on urban gardening. Development is expected to cost $30 million for the affordable workforce housing property. Construction is expected to begin in the first quarter of 2017, with completion slated for 12 months after construction begins.

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Heritage Bank, a subsidiary of Heritage Financial Corporation, announced May 25 a $9.9 million LIHTC equity investment in the construction of Billy Frank Place in Olympia, Wash. Low Income Housing Institute’s (LIHI) development will provide 43 affordable homes located in a four-story building. The homes will serve formerly homeless veterans and young adults, as well as disabled people. Heritage Bank also provided a $6.5 million community lending construction loan. Billy Frank Place is scheduled to open in spring 2017.

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Jonathan Rose Cos. and Malkin Holdings broke ground May 26 on the third and final phase of Metro Green III. The mixed-income affordable housing property in Stamford, Conn., is part of the larger development, Metro Rose Residential, which will provide 231-unit mixed-income apartments. This third phase will be an 11-story high-rise building that will provide 131 affordable apartments. There will be studio, one- and two-bedroom homes with 58 market-rate apartments and 73 apartments reserved for those earning between 50 and 60 percent of the AMI. The overall Metro Green Residential development includes a 1-acre landscaped courtyard, while amenities of Metro Green III include a fitness center, a Wi-Fi lounge, a rooftop terrace and an entertaining kitchen. Financing for the third phase is $52 million, with funding sources including $14.4 million in 9 percent LIHTC equity, as well as Housing Trust Funds from the state of Connecticut Department of Housing; HOME funds; tax-exempt financing issued through a collaboration with Charter Oak Communities; and 4 percent LIHTCs allocated by the Connecticut Housing Finance Authority (CHFA). Metro Green III is expected to be complete in June 2017.

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The grand opening of St. Michael the Archangel Haven was May 29. The $11 million affordable housing property in Walla Walla, Wash., was developed by Catholic Charities with funding from Veterans Affairs and $820,400 in LIHTCs. The complex will provide 40 homes to homeless veterans and their families. Of those homes, 24 will be rehabilitated and 16 will be newly constructed. St. Michael’s will provide one, two- and three-bedroom homes.

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In mid-May, Four Corners Development LLC announced the planned construction of Peakview Trails, a new affordable housing community in Greeley, Colo. The development company was awarded $987,140 in disaster recovery state LIHTCs, and $635,718 in 4 percent federal LIHTCs from the Colorado Housing Finance Authority (CHFA), to be awarded over a 10-year period. In addition, the Colorado Division of Housing provided $3.5 million in CDBG Disaster Recovery funds due to the flood-impacted areas in the Boulder, Larimer and Weld counties. The Peakview Trails affordable housing community will offer 96 one- and two-bedroom apartments, with amenities to include a clubhouse/community room, a library, a computer lab, a business center and a picnic and barbecue area. Apartments will be available to residents earning between 30 and 60 percent of the AMI. Four Corners is expected to receive site approval by July, with the groundbreaking in November.

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A joint announcement for the financing of Phase III of Fordham Bedford’s Serviam development was provided June 6. The New York City Department of Housing Preservation (HPD), New York City Housing Development Corporation (HDC), Fordham Bedford Housing Corporation and Enterprise Community Partners Inc. announced the $98.8 million investment for the development of Serviam Heights in the Bronx, N.Y. Financing allows for the creation of 197 affordable homes for low-income and formerly homeless seniors. To construct Serviam Heights, a four-story 1892 convent building will be rehabilitated and converted into 57 apartments, and a new nine-story building will be built to include 140 apartments. In addition, a two-story chapel will be converted into a senior community life center and office space. Once complete, Serviam Heights will provide 24 studios, 171 one-bedrooms and two two-bedroom apartments for superintendents. Of these, 30 will be set aside for homeless or formerly homeless seniors. All apartments will receive project-based Section 8 vouchers from the New York City Housing Authority (NYHCA). Financing includes $47 million in fixed-rate, tax-exempt bonds from HDC and $11.9 million from the HDC Corporate Reserves; $14.6 million in City Capital Funds from HPD through its Senior Housing Affordable Rental Apartments Program (SARA) and $153,000 from HPD in federal HOME funds; $500,000 in Reso A from New York City Councilman  Ritchie Torres; and $39.8 million syndicated in LIHTC from Enterprise. Serviam Heights is the third property for the Fordham Bedford Housing Corporation development. Phase I is Serviam Gardens, an 83-apartment mixed-construction property, and Phase II is Serviam Towers, which provides 160 affordable homes.

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Residents started moving in to Rethke Terrace Apartments in early June. The permanent supportive affordable housing property in Madison, Wis., provides 60 apartments in a four-story building developed by Heartland Housing Inc., 25 of which are reserved for veterans. There are studio apartments for formerly homeless single adults and supportive services for them, including medical, mental health and substance abuse assistance. Amenities include a community room, a fitness center, a library and a computer lab. Heartland received $5.4 million in LIHTCs, and the city contributed total $1.5 million while Dane County provided $950,000 to the development. Costs were nearly $9 million.

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The Sydelle supportive housing residence in the Bronx, N.Y., opened June 6. The $40 million development provides 107 homes for low-income and special-needs individuals and families. The Center for Urban Community Services (CUCS) will provide on-site support services to homeless and low-income people and families, including people with complex psychiatric and medical needs. Enterprise Community Investment, Inc. served as the property’s LIHTC syndicator, providing $14.8 million in LIHTC equity through JP Morgan Community Capital. Additional funding for the development was provided by the New York State Office of Temporary and Disability Assistance’s Homeless Housing and Assistance Program, the New York City Department of Housing Preservation and Development’s Supportive Housing Loan Program and the New York City Housing Development Corporation.

People

Lynn Jacobs, director of California Department of Housing and Community Development (HCD), died July 4. Jacobs was director since 2006 and was a valuable member of the affordable housing community. She was responsible for administering the state’s housing finance, rehabilitation and community development programs, as well as oversight of the state’s housing policy, planning and code-setting processes and regulating manufactured housing and mobile home parks. Before accepting the role of director, Jacobs was the founder and president of Ventura Affordable Homes. She developed homes for more than 20 years, building more than 400 homes in Ventura and Santa Barbara counties alone. Before that, Jacobs founded and served as president of Affordable Communities in Ventura County. She will be greatly missed by her colleagues and everyone connected to affordable housing.

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The Wisconsin Housing and Economic Development Authority (WHEDA) announced May 23 the promotion of Dave Ginger to commercial lending product manager. In his new role Ginger administer the day-to-day functions of the LIHTC program and establish the qualified allocation plan (QAP). He will also be responsible for instituting new commercial lending products and programs that meet WHEDA’s strategic plan. Ginger was previously a commercial lending officer. He has been a WHEDA staff member for 22 years.

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RED Capital Group announced May 16 the election of Tracy Peters, senior managing director of affordable housing for RED, as the 2016-17 president of the Ohio Housing Council. Peters served as vice president on the board for the past two years, as well as chairman of the Ohio Housing Council program committee for the past four years. Peters is also involved and has been a speaker for national affordable housing associations such as the Institute for Responsible Housing Preservation and the National Housing and Rehabilitation Association.

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Local Initiatives Support Corporation (LISC) announced June 16 the appointment of Maurice Jones as the president and chief executive officer (CEO) of the nonprofit national investor. The LISC board unanimously elected Jones, who serves as Virginia’s secretary of commerce and trade. Jones manages 13 state agencies focused on the economic needs of Virginia. Before this role, he served as deputy secretary for the U.S. Department of Housing and Urban Development (HUD). Before that he was commissioner of Virginia’s Department of Social Services and deputy chief of staff to former Virginia Gov. Mark Warner. Jones also worked at the Treasury Department, where he helped manage a then-new initiative, Community Development Financial Institutions (CDFI) fund. Jones replaces Michael Rubinger, who will step down on Sept. 6.

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On June 8, Will Cooper Sr., founder and chairman of WNC, a national investor in real estate and community development initiatives, was awarded with the David Reznick Lifetime Achievement Award by The Affordable Housing Tax Credit Coalition. The award was presented by Sen. Mike Crapo, R-Iowa, at the 22nd annual Charles L. Edson Tax Credit Excellence Awards at the U.S. Capitol Visitors Center in Washington, D.C. The award event recognizes LIHTC developments that are considered to be at the forefront of creating stronger, healthier communities in urban, suburban and rural areas nationwide. The David Reznick Lifetime Achievement Award recognizes Cooper’s longtime commitment to supporting the work of the affordable housing and community development industry on the federal, state and local levels. Cooper founded WNC in 1971.

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Greystone announced June 29 Tanya Eastwood’s election as the president of the Council for Affordable and Rural Housing (CARH) for the real estate lending, investment and advisory company. Eastwood is head of Greystone’s affordable housing development group and will serve for the 2016-18 term. She previously served as secretary of the executive committee, as well as a member of the board of directors for CARH.

Bond

The Connecticut Housing Finance Authority (CHFA) announced the sale June 28 of $63 million in fixed rate tax-exempt bonds to finance the rehabilitation of four affordable housing developments. This sale is the first of two totaling $86 million. The second sale was set for July 13 and will provide $23 million in variable rate bonds. The four properties to be rehabilitated are Kensington Square I in New Haven, Pine Tree Apartments in Fairfield, The Lofts at Ponemah Mills in Norwich and Zbikowski Park in Bristol. These properties provide 376 apartments, with 325 available for renters earning 60 percent of the AMI or below. The bonds are rated AAA/Aaa by S&P and Moody’s, respectively.