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Low-Income Housing Tax Credits News Briefs - August 2018

The Office of the Comptroller of the Currency (OCC) released June 6 its schedule of Community Reinvestment Act (CRA) evaluations that will be conducted in the third and fourth quarters of 2018. Public comments on the institutions scheduled for evaluation can be submitted to the institutions themselves. The OCC said it would consider all comments received before the close of the CRA evaluation. The CRA evaluation schedule is available at www.novoco.com/cra.

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The Massachusetts Supreme Judicial Court affirmed a lower court’s summary judgment supporting a nonprofit’s right of first refusal to purchase a low-income housing tax credit (LIHTC) property once a third party makes an enforceable offer to purchase the property. The court in Homeowner’s Rehab Inc. v. Related Corporate V SLP LP ruled that the right of first refusal doesn’t require a bona fide offer to be made and accepted with the consent of the special limited partner. The ruling states that the partnership only needs an enforceable offer from a third party, that the partnership must make a decision to accept the offer (although that doesn’t need to be communicated to the third party) and that the general partner has the power to accept the offer. The ruling specifies that the power of the general partner to decide to accept the offer depends on the partnership language. The ruling is available at www.taxcredithousing.com. 

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The Federal Housing Finance Agency (FHFA) hosted a May 16 a workshop to further engage the local housing finance agency (HFA) lending community. Attendees included lenders, state and local HFA representatives, trade associations and Fannie Mae and Freddie Mac. During the first quarter of 2018, FHFA and the Enterprises (Fannie Mae and Freddie Mac) independently reached out to stakeholders as part of the HFA Access 2018 Scorecard project in order to research and assess opportunities to develop further partnerships with HFAs across market segments, and help increase access to credit. The outreach generated common themes around HFA products and programs, pricing, interactions with third parties, and technology. As a next step, FHFA and the Enterprises will work together to review ideas generated during the workshop and identify potential approaches for streamlining, aligning and improving that relationship.

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The Affordable Housing Tax Credit Coalition announced June 13 the winners of the 24th Annual Charles L. Edson Tax Credit Excellence Awards. The Edson Awards honor developments that use the LIHTC to strengthen America’s communities and provide homes that transform the lives of low-income families, veterans, seniors and people with special needs. Valencia Vista in San Bernardino, Calif., won for best metro housing. PAHA LIHTC Homes #1 in Pueblo of Acoma, N.M., won best rural housing. 66 West in Edina, Minn., won for special needs housing. Patriot Place Apartments in Las Vegas won for veterans housing. Hillcrest Residences in Pittsburgh won senior housing. Columbia Brookside Redevelopment in Athens, Ga., won public housing. Billings Forge Apartments in Hartford, Conn., won HUD preservation. 

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The Comptroller of the Currency told the House Financial Services Committee June 13 that his agency will modernize its regulatory approach to the CRA and reduce “unnecessary regulatory burden” on national banks and federal savings associations. Joseph M. Otting also said he would like to expand the types of activities eligible for CRA consideration and will soon solicit comments on how to best modernize the CRA regulatory framework. The testimony is available at www.novoco.com/cra.

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The National Council of State Housing Agencies sent a letter June 13 to the Internal Revenue Service and the Department of the Treasury concerning the implementation of income averaging in low-income housing tax credit properties. The letter seeks state flexibility in establishing income-averaging guidelines and determining how to approach compliance monitoring. The letter asks the IRS to establish a procedure for HUD to calculate area-specific income limits at various designations, to update Form 8823 and to establish rules for determining the next-available-unit designation when more than one tenant in units of different income levels go over-income at the same time. The letter is available at www.taxcredithousing.com.

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The OCC issued a bulletin June 16 including clarifications to supervisory policies and processes in the evaluation of community bank performance under the CRA. The bulletin informs national banks, federal savings associations and federal branches and agencies about how the OCC has clarified and simplified policies. In the bulletin, the OCC says it recently issued an advance notice of proposed rulemaking for comments and feedback related to the modernization of the CRA regulatory framework. The bulletin is available at www.novoco.com/cra.

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The Local Initiatives Support Corporation (LISC) announced July 2 a $10 million investment, in partnership with the Citi Foundation, to the Bridges to Career Opportunities initiative. The initiative helps connect unemployed and underemployed Americans with jobs in growth industries that need trained workers, including health care, transportation, technology, construction and other industries facing shortages of skilled workers. With this new funding, LISC will expand the Bridges model to 40 communities throughout the United States, and aims to serve 10,000 job seekers over the next three years. Many of the new sites will be in areas that have been designated opportunity zones. 


LIHTC State

The California Tax Credit Allocation Committee (CTCAC) published guidance June 21 for those using a hybrid of 9 percent and 4 percent low-income housing tax credits (LIHTCs) to develop affordable housing. The guidance covers items such as calculating developer fees, how developments will be scored, how set-asides will be determined, common-area components and more. CTCAC suggested contacting the developer’s regional analyst with questions.

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The LIHTC has created $75 billion in property value, $923 million in tax revenue and 137,000 jobs in North Carolina over the history of the program, according to a report by the North Carolina Housing Finance Agency (NCHFA). The report details that the LIHTC has financed 83,000 apartments in the state, including 35,600 in rural areas. The NCHFA report also says that every dollar in LIHTC equity saves as much as $3 in taxpayer health care dollars. The report is available at www.taxcredithousing.com.

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The Virginia Housing Development Authority released June 14 the awards list for the 2018 LIHTC round. The complete list of awards is available at www.taxcredithousing.com.

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The Oklahoma Housing Finance Agency released May 30 the awards for the 2018 LIHTC round. Ten properties received 9 percent credits, while two properties received 4 percent credits. Commons on Willow LP of Oklahoma received $4.3 million in both state and federal credits for the construction of 60 apartments to be known as The Commons on Willow in Enid. Eagle Flats LLC received $2.8 million in both state and federal credits for the construction of 35 apartments to be known as Eagle Flats in Elk City. Magnolia Ridge LLC received $2.6 million in both federal and state credits for the 23-apartment property called Magnolia Ridge in Stillwater. Park Avenue Estates LP received $5.8 million in state and federal credits for the construction of 92 single-family homes for rent known as Park Avenue Estates in Yukon. Tennyson Manor Apartments LP received $4.5 million in state and federal credits for the construction of the 54-apartment Tennyson Manor in Enid. West Park Phase II, Limited Partnership received $7.5 million in federal credits for the new construction of 77 apartments in Tulsa called West Park Phase II. Village on Green LP received $5.2 million in federal credits for the construction of The Village on the Green, a 48-apartment property in Purcell. Ashton on the Green LP received $6.5 million in federal credits for the acquisition and rehabilitation of the 100-apartment development in El Reno called Ashton on the Green. Eagle’s Landing OK TC LP received $6.5 million in federal credits to acquire and rehabilitate Eagle’s Landing, an 88-apartment development formerly known as Elm Terrace in Duncan. Rural Housing of Checotah LP received $3.7 million in federal credits to acquire and rehabilitate the 47-apartment Garden Walk of Checotah.

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Washington, D.C., Mayor Muriel Bowser announced June 13 the selection of nine developments to receive $103 million in funding that will produce or preserve affordable housing for more than 1,700 residents. The DC Department of Housing and Community Development provided $78 million from the Housing Production Trust Fund, 9 percent LIHTCs that created $25 million in equity and 106 local rent supplement program vouchers. The nine selected developments will provide affordable housing across five wards to households earning no more than 80 percent of the AMI.

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U.S. House of Representatives Minority Leader Nancy Pelosi, Rep. Barbara Lee and the Federal Home Loan Bank of San Francisco announced $13.2 million in Affordable Housing program (AHP) grants June 26 for San Francisco Bay Area affordable housing developments. The grants were awarded to 14 developments that will produce more than 1,200 affordable apartment homes in the Bay Area. The grants are part of $65.9 million in AHP grants awarded to 70 housing developments that will produce more than 6,000 affordable apartments in Arizona, California, Nevada and other states. 

LIHTC Dealmaker

Hunt Capital Partners announced $13.8 million in low-income housing tax credit (LIHTC) equity June 14 for the construction of Bethlehem’s Pioneer Place in Mansfield, Texas. There will be 135 affordable one- and two-bedroom apartment homes for seniors 55 and older earning up to 30, 50 and 60 percent of the area median income (AMI). Community amenities will include an exercise facility, library, salon, community courtyard and central laundry facilities. Hunt Capital Partners facilitated the investment of federal LIHTC equity through its proprietary fund, Hunt Capital Partners Tax Credit Fund 26. Total development cost for Pioneer Place is $19.9 million. Pioneer Place is under construction and scheduled for completion by summer 2019. 

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Woda Cooper Companies Inc. hosted a grand reopening and ribbon-cutting ceremony June 11 for Bell Diamond Manor in Norfolk, Va. The affordable townhouse and garden apartment community available provides 128 apartments to seniors, workforce singles and families earning up to 60 percent of the AMI. The $14 million renovation included replacement of all roofs, windows, siding and doors. The two- and three-bedroom apartments have new cabinetry, painting, wood trim, flooring, low-energy HVAC systems, updated bathrooms and Energy Star appliances. Sixteen apartments were redesigned for full handicap accessibility. Woda Cooper Companies Inc. also added new community space, two new playgrounds and expanded the on-site management office. The renovations at Bell Diamond Manor were made possible through LIHTC financing allocated by the Virginia Housing Development Authority.

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Enterprise Community Investment Inc. (Enterprise) announced June 14 the closing of $110 million in LIHTC equity. The third conventional real estate equity fund (Fund III) is expected to preserve more than 5,000 affordable and workforce homes. Fund III is the latest in a series of similar funds sponsored by Enterprise, and a fourth is expected later this year. 

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Miami Valley Housing Opportunity received $6 million in LIHTCs and Capital Funding to End Homelessness funds in mid-June from the Ohio Housing Finance Agency. The Kettering, Ohio, property will provide 40 apartments for low-income and homeless persons. Funding also came from the Federal Home Loan Bank of Cincinnati, the Ohio Department of Mental Health and Addiction Services and Montgomery County Housing Trust Funds and County Corporation. The three-story, 39,852-square-foot building will provide permanent, supportive housing for men and women who have been homeless and are staying in Montgomery County shelters. 

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WNC announced June 21 the completed renovation of Fort Des Moines Living in Des Moines, Iowa. WNC provided $17.1 million in LIHTC equity for the transformation of six historic barrack buildings on 13 acres into 142 affordable apartments. There are two- and three-story buildings with 80 one- and 62 two-bedroom garden apartments. The apartments are available to families earning 60 percent of the AMI. Renovation of the 1800s property took approximately 10 months. 

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Hunt Capital Partners, in collaboration with Alliance Property Group, announced June 21 the closing of $4.7 million in LIHTC equity investment for the acquisition and rehabilitation of Owens Senior in Las Vegas. Hunt Capital Partners facilitated the investment of 9 percent federal LIHTCs through its multi-investor fund, Hunt Capital Partners Tax Credit Fund 27. Owens Senior is a garden-style residential development providing 72 apartments to seniors 55 and older. The rehabilitation of Owens Senior, which is expected to total $6.3 million, is scheduled for completion by February 2019

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WNC announced June 27 the opening of Bright Sky Apartments in Moorhead, Minn. The construction of the affordable housing community was financed with $2.5 million in LIHTC equity from WNC. Bright Sky Apartments is a three-story building consisting of 43 apartments, with 18 studio apartments, four one-, nine two-, nine three- and three four-bedroom apartments.  

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U.S. Bank announced June 28 the closing of two LIHTC financing packages for Dominium. The combined $45 million will finance the construction of affordable housing on the former Weyerhaeuser Lumber site in St. Paul, Minn. Dominium will develop 241 affordable apartments for seniors and 121 affordable apartments for families. Dougherty Mortgage provided $51 million in permanent loans. The city of St. Paul provided a $600,000 permanent loan and allocated tax-exempt bonds. Construction of the $96 million development is expected to be complete in 2020.

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Hunt Capital Partners announced June 21 the closing of $9.7 million in LIHTC equity for the construction of Monarch Estates in Uvalde, Texas.  Monarch Estates will provide 80 apartments for seniors 55 and older earning up to 30, 50 and 60 percent of the AMI. The apartment homes will be located throughout 10 garden-style residential buildings. Amenities will include a community clubhouse with a library/meeting room, business center and fitness center. Construction for the $12.7 million property is scheduled for completion July 2019. 

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The grand opening for Roaring Fork Apartments in Basalt, Colo., was June 25. Developer Real America received $11 million in LIHTCs to construct the 56-apartment property. Apartments will be available for residents earning between 30 and 60 percent of the AMI. Amenities will include a fitness center. 

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The groundbreaking of Residences at Brighton Marine was held June 18. The Brighton, Mass., mixed-income property will provide 102 apartment homes, with a preference for veterans. There will be 11 studio apartments, 47 one-, 33 two- and 11 three-bedroom apartments in a seven-story building. MassHousing provided a $9.4 million permanent loan, a $14 million bridge loan and $5 million from the agency’s Workforce Housing Initiative. The Massachusetts Department of Housing and Community Development provided federal and state LIHTCs, as well as $3.6 million in direct support and an additional $3.7 million is provided through the Affordable Housing Trust Fund. Bank of America invested more than $24 million in LIHTC equity. The Brighton Marine campus was originally built by the federal government beginning in 1938 to accommodate the relocation of the U.S. Marine Hospital. The $46 million construction of the 1.4-acre site is scheduled for completion by December 2019.

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The ribbon cutting for the final phase of Parkside Apartments in Lexington, Ky., was June 18. This phase included 36 affordable apartments, bringing the total to 108 apartments, with seven one-, 19 two- and eight three-bedroom apartments. The apartments are available to individuals and families earning 60 percent or less of the AMI. The Kentucky Housing Corporation provided an allocation of $3.9 million in LIHTCs. 

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Developers HELP USA and SAGE broke ground mid-June on Crotona Senior Residences, an LGBT senior residence in the Bronx, N.Y. The $41.4 million property will provide 84 apartments, with 26 reserved for seniors who have been homeless. Crotona Senior Residences will feature an on-site SAGEcenter, social services, rooftop terrace and community garden. New York State Homes and Community Renewal provided $1.5 million through its Community Investment Fund in addition to a LIHTC allocation.

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Virtua Partners (Virtua), a global private-equity real-estate investment firm, announced June 20 the launch of its Opportunity Zone Fund. This fund is designed to invest in the newly created opportunity zones. Virtua Opportunity Zone Fund I LLC aims to raise $200 million. Investors in qualified opportunity zone funds receive tax benefits including deferral of current capital gains, a tax reduction of up to 15 percent on current gains and no capital gains taxes on appreciation if the investment is held for 10 years. Virtua Opportunity Zone Fund I will primarily invest in residential rental property development, hospitality and offices, with focus on Austin, Texas; Atlanta; Dallas; Orlando, Fla.; Phoenix and San Antonio.

LIHTC People

Hunt Mortgage Group announced June 7 that Precilla Torres joined the firm as senior managing director. She will also head the proprietary lending group. Torres will be based in the firm’s New York office. Before joining Hunt, she was the co-portfolio manager and co-head of the commercial mortgage backed securities platform for Ares Management LLC. 

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Stifel announced June 18 the addition of John Sabatier to its public finance housing group as managing director. He will be based in Stifel’s Baton Rouge, La., public finance office. Before joining Stifel, Sabatier was a municipal investment banker with RBC Capital Markets, and executive vice president multifamily housing banker with JLL. 

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Chase announced June 12 that Cort Gross joined the community development banking group as senior commercial banker. Gross is based in San Francisco. Gross joins the firm from Self-Help Federal Credit Union. Previously, he founded a consulting firm specializing in community development, U.S. Department of Housing and Urban Development Federal Housing Administration financing and community asset building, as well as new markets tax credit and low-income housing tax credit financing. 

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Union Bank announced June 5 that Elizabeth Van Benschoten joined its real estate industries group as managing director and market manager for community development finance (CDF) in Northern California. Van Benschoten is based in Walnut Creek, Calif. She is responsible for managing the Northern California CDF team in its efforts to originate high-quality, profitable debt and equity transactions for affordable housing that will assist the bank in meeting its Community Reinvestment Act obligations. Van Benschoten previously served as president of Bridge Impact Capital. Before that, she held several positions at Bank of America Merrill Lynch. Most recently, she was an independent consultant. 
 

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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