Low-Income Housing Tax Credits News Briefs – August 2019

Thursday, August 1, 2019

Eligible basis should be reduced for noncompliance of the common area for low-income housing tax credit (LIHTC) properties, according to a memorandum from the Office of Chief Counsel of the Internal Revenue Service. The memo, dated May 22, said that noncompliance of the common area reduces the eligible basis of the property for the taxable year in which the noncompliance takes place and that the recapture amount is based on the amount of costs attributable to the entire common area–not just the noncompliant section–that was included in the building’s eligible basis. The memo also said that the noncompliance of a common area should not be treated as if a low-income unit close to the common area was noncompliant.

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The Office of the Comptroller of the Currency (OCC) released a list June 5 of Community Reinvestment Act (CRA) performance evaluations from May. Of the 33 evaluations made public, 27 were satisfactory and six were outstanding. The list includes national banks, federal savings associations and insured federal branches of foreign banks.

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The OCC released a list July 2 of CRA performance evaluations from June. Of the 23 evaluations made public, 18 were satisfactory and five were outstanding. The list includes national banks, federal savings associations and insured federal branches of foreign banks. The complete list is available at www.novoco.com/cra.

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Regions Affordable Housing announced June 28 the closing of its RAH Corporate Partners Fund 55 LLC fund. The $104 million tax credit equity fund will provide financing for 12 affordable housing properties through the LIHTC program. The properties are located in 10 states: Alabama, Arkansas, Connecticut, Georgia, Indiana, Louisiana, Michigan, New York, South Carolina and Texas. Of the 12 properties, nine are being built for families and three for seniors. There will be five properties setting aside apartment homes to provide services to populations such as the homeless, special needs homeless and those requiring health and social services. There were six institutional investors participating in the fund, which will provide more than 1,000 affordable apartments.

LIHTC State

The Connecticut Housing Finance Authority announced June 27 the 2019 list of low-income housing tax credit (LIHTC) awardees. A total of $10 million in state LIHTCs was available, which will support the development of more than 596 new affordable apartments in 16 communities.

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The Alabama Housing Finance Authority announced May 30 the 2019 LIHTC award recipients. There will be 19 developments financed, with the new construction of 13 properties and the acquisition and rehabilitation of six properties. A total of 1,119 apartments are expected to be built or renovated.

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The Michigan State Housing Development Authority announced June 19 the 2019 LIHTC award recipients. More than $13.8 million in LIHTCs will be available to build or rehabilitate 14 affordable developments. The complete listing is available at www.taxcredithousing.com.

LIHTC Dealmaker

BRIDGE Housing held the groundbreaking of 88 Broadway July 9. The affordable housing property in San Francisco is one of two buildings being co-developed by BRIDGE Housing and The John Stewart Company. 88 Broadway will provide 125 apartments for families earning between 30 percent and 120 percent of the area median income (AMI). The second building, 735 Davis, will provide 53 apartments for seniors earning between 30 percent and 70 percent AMI. The California Tax Credit Allocation Committee provided $3.6 million in LIHTCs.

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Dougherty Mortgage LLC announced June 28 the closing of a $3.6 million Fannie Mae loan for the acquisition financing of Westgate Apartments. The affordable housing property in Hibbing, Minn., will provide 100 apartment homes in a three-story building to residents earning 60 percent of the AMI. Financing includes 9 percent low-income housing tax credits (LIHTCs), which will go to the moderate rehabilitation of the property. Amenities include a fitness center, sauna, leasing office, community room and common laundry. 

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TD Bank announced June 19 a $20.3 million LIHTC equity commitment to Blue Sky Communities for the development of the Preserve at Sabal Park, a multifamily affordable housing community in Seffner, Fla. TD Bank also provided a $22 million construction loan through its Commercial Real Estate Group. Financing will go to the initial construction phase. When complete, the property will offer 144 one-, two- and three-bedroom apartments. Amenities will include a pool and a clubhouse. Also available will be a financial literacy program and employment assistance programs.

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L+M Development Partners, together with Prudential Financial, announced a deal June 26 to preserve and modernize Zion Towers in Newark, N.J. Two hundred sixty-eight apartments will undergo rehabilitation. Financing includes loans from the New Jersey Housing and Mortgage Financing Agency (NJHMFA) and Citi Community Capital and LIHTC equity from Wells Fargo Bank.

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The Massachusetts Housing Finance Agency (MassHousing) announced $82 million in financing June 27 for the renovation of the Millers River Apartments in Cambridge, Mass. The affordable housing community will provide 285 apartments to lower-income households. The Millers River Apartments consist of 282 apartments in a 19-story building, with three new apartments to be created. Apartments will be available for families earning between 30 and 60 percent of the AMI. Financing is available through MassHousing’s conduit loan program, which generated $71 million in LIHTC equity. MassHousing also issued tax-exempt housing revenue bonds, and the Cambridge Housing Authority provided a $44 million loan.

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The New Jersey Housing Mortgage Finance Agency celebrated June 17 the grand opening of The Renaissance at Asbury Park in Asbury, N.J. The affordable housing development is providing 64 apartments to working families. There is 1,200 square feet of retail space. Apartments are available to families earning less than 60 percent of the AMI. Five apartment are available to homeless individuals and families, with a preference for homeless veterans. The $20.2 million development was financed with Superstorm Sandy recovery funds provided by NJHMFA and the Department of Community Affairs, as well as a $10.5 million construction and permanent loan, $8.9 million in federal Community Development Block Grant Disaster Recovery assistance and $7.4 million in 4 percent LIHTC equity.

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Woda Cooper Companies Inc., held the groundbreaking for Anderson Green June 17. Woda’s first Iowa development, the multiphase, mixed-income multifamily property in Cedar Rapids, Iowa, will be financed with LIHTC equity. The first phase of the $17.9 million development will cost $8.7 million and will provide 39 affordable rental homes for families and singles at or below 30, 40, and 60 percent of the AMI, with five apartments at market rate. The second phase, called Anderson Greene II, will be a $9.2 million development offering 48 apartments, also in a mixed-income property. The second phase will be built approximately one year after the first phase. Amenities will include a community center with a clubroom and kitchenette and management office. 

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Walker & Dunlop Inc. announced June 19 that it structured $40.6 million in financing for Keahumoa Place Apartments in Kapolei, Oahu. Walker & Dunlop structured the financing through Freddie Mac’s Tax-Exempt Loan and Unfunded Forward Commitment programs. Developer The Michaels Organization will use that financing, as well as a combination of 4 percent and 9 percent LIHTCs, to provide residents with a new garden-style affordable housing community. Keahumoa Place Apartments will comprise 320 one-, two- and three-bedroom apartments in 37 two-story buildings. The development will be located on 20 acres of land. Amenities will include a picnic area, pet park and community center that will have a multipurpose room and computer lab. 

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The Grand Rapids Housing Commission announced late June $14 million in LIHTCs from the Michigan State Housing Development Authority for the development of affordable housing in Grand Rapids. The $13.5 million housing development will be focusing on low-income elderly and disabled veterans. Construction is expected to take 12 to 14 months. The new development will be owned by Mount Mercy Housing Corporation. 

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WinnDevelopment, a branch of WinnCompanies, broke ground June 25 on old East Haven High School site in East Haven, Conn. The school will be transformed into 70 age-restricted, affordable apartments, thanks to $14 million in LIHTC equity. Apartments will be available to residents 55 and older. Development is expected to be complete by spring 2020. Costs will total $18.7 million.

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Enterprise Housing Credit Investments announced June 26 that it spent $82 million for the acquisition and rehabilitation of an affordable housing property in the Bronx, N.Y. Financing will include bond financing and $32 million in LIHTC equity, as well as $16 million in permanent tax-exempt bonds and $13.6 million in subsidy from the New York State Homes and Community Renewal. Additional funding was provided through the New York City Department of Housing Preservation and Development’s Senior Affordable Rental Apartments program. The property will provide 154 apartments in a 12-story building. Apartments will be available to formerly homeless and incarcerated seniors. All of the apartments will be reserved for households earning 50 percent or less of the AMI. Amenities will include community space, an exercise room, an indoor greenhouse, a garden and an outdoor gym. Construction is expected to be complete fall 2021.

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Eden Housing, the city of Alameda and Alameda Point Partners celebrated July 11 the groundbreaking of Alameda Point Senior Apartments in Alameda, Calif. The affordable rental community for seniors 62 and older will be located at Alameda Point’s Site A development. Site A is a $1 billion mixed-use, transit-oriented waterfront development on the site of the former Naval Air Station Alameda. Alameda Point Senior Apartments will include 48 one- and 12 two-bedroom apartment homes that will be available to seniors earning annual incomes from 20 percent to 60 percent of the AMI. Of those, 30 apartments will serve seniors experiencing homelessness, of which 28 will serve veterans exiting homelessness. Alameda Point Senior Apartment amenities will include a community room with kitchen, common courtyard, laundry facility, community garden space and office space for an on-site manager and supportive services. Funding includes a State of California Veterans Housing and Homelessness Prevention program loan, 9 percent LIHTCs from the California Tax Credit Allocation Committee and debt and equity financing from Union Bank. This $36 million residential community was designed by KTGY Architecture + Planning. Completion is scheduled for July 2020.

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The grand opening of Cornerstone at Seaside Heights in Seaside Heights, N.J., was June 12. The affordable apartment community was built in part with Superstorm Sandy recovery funding. The New Jersey Housing and Mortgage Finance Agency (NJHMFA) also provided $12.9 million in construction financing, as well as $15.5 million in federal Community Development Block Grant–Disaster Recovery assistance. NJHMFA awarded The Walters Group 4 percent LIHTCs, which generated $6.9 million in equity. Development costs totaled $24.4 million. The four-story property features 91 one- and two-bedroom apartments for residents 55 and older earning up to 60 percent of the AMI. Of those apartments, five are reserved for those with special needs. Amenities include a clubhouse with fitness center, computer workstations and roof deck. Ocean Mental Health Services will provide the social services and case management for the special needs residents. 

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MassHousing announced June 25 the closing of $32.8 million for the preservation of affordability and property rehabilitation of Haynes House in Roxbury, Mass. MassHousing provided the Madison Park Development Corporation (MPDC) with a $9 million construction and permanent loan, a $21.4 million bridge loan and $2.7 million from the agency’s $100 million Opportunity Fund. Also included in the financing package was $17.2 million in LIHTC equity from the Massachusetts Department of Housing and Community Development. Improvements to the property include building envelope and façade renovation, apartment and common area upgrades and the construction of accessible apartments. Costs are expected to be $20 million. Haynes House has 131 apartments, 16 of which will be occupied by low-income households earning at or below 30 percent of the AMI. There will be 89 apartments for households earning at or below 60 percent of the AMI, 19 apartments for households earning at or below 80 percent of the AMI and seven apartments that will be rented at market rates.

LIHTC People

The Georgia Department of Community Affairs announced July 2 recent staffing changes in the department. Ryan Fleming was promoted to office director of housing finance. Fleming most recently served as the manager of internal operations for housing finance. Denise Farrior manages the policy and development team and will begin her role as the interim office director of portfolio management. Vanessa Saint-Louis was promoted to compliance manager. She previously served as the regulatory auditor. Jack Popper was promoted to affordable housing policy manager. 

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Conifer Realty announced July 8 the appointment of Joan Hoover as president. Hoover joined Conifer in 2007 and has since been responsible for multiple functions including financing, acquisition and dispositions. Most recently, she led a multidisciplinary team of development, finance, legal and human resources associates. Hoover has more than 25 years of experience in the financial management and development of affordable housing. 

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