Low-Income Housing Tax Credits News Briefs - August 2021

Monday, August 2, 2021

LIHTC Industry

HUD published a notice in the July 2 Federal Register extending the period by 180 days for which certain 2019 and 2020 qualified census tracts (QCTs) and difficult development areas (DDAs) are effective for purposes of the low-income housing tax credit (LIHTC). The notice, in response to the COVID-19 pandemic and presidentially declared emergency, extended the eligibility period from 730 days to 910 days for properties in QCTs and DDAs that are not on subsequent lists of QCTs and DDAs and that submitted applications while the area was a 2019 or 2020 QCT or DDA.

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A Call to Invest in Our Neighborhoods, a national coalition, sent a letter to Congress June 4 encouraging the passage of Affordable Housing Credit Improvement Act (AHCIA) of 2021. More than 2,400 national, state and local organizations and businesses from across the country signed the missive. Sens. Maria Cantwell, D-Washington; Todd Young, R-Indiana; Ron Wyden, D-Oregon; and Rob Portman, R-Ohio, introduced the AHCIA in April.

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More than 80% of renters earning less than $25,000 spent more than 30% of their income on housing in 2019, according to The State of the Nation’s Housing 2021. The annual report from the Joint Center for Housing Studies at Harvard University focuses on rising home prices, but also points out the high rate of cost-burdened renters and addresses the racial and ethnic disparities in homeownership. The report’s authors say that President Joe Biden’s administration’s proposal to increase federal spending on affordable housing would address many of the nation’s housing issues, some of which were amplified by the COVID-19 pandemic.

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The Internal Revenue Service published a revenue procedure June 17 that explained how to comply with changes from a 40-year to a 30-year recovery period under the alternative depreciation system for certain residential rental property based on a provision of the Consolidated Appropriations Act of 2021. The revenue procedure addresses the changes available for certain property placed in service before 2018 that is held by an electing real property trade or business. The 2020 legislation expanded a change made in 2017 tax reform legislation that applied only to property placed in service after 2017.

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The board of governors of the Federal Reserve System (Fed) and Federal Deposit Insurance Corporation (FDIC) released in June the list of distressed or underserved nonmetropolitan middle-income geographies for 2021, which makes revitalization or stabilization activities in those areas eligible for CRA consideration. The designations reflect local economic conditions, including unemployment, poverty and population changes. The Fed and FDIC continue to apply a one-year lag period for areas listed in 2020 that are no longer designated as distressed or underserved, making revitalization or stabilization activities in those geographies eligible for CRA condensation for 12 months after the publication of the current list.

LIHTC State

The Vermont Housing Finance Agency announced in early June the award of federal 9% low-income housing tax credits (LIHTCs) to five properties. Developments receiving funds included the 24-home Village Center Apartments in Morrisville, 30-apartment Bayview Crossing in South Hero, 20-home Firehouse Apartments in Bristol, 36-apartment Fox Run Apartments in Berlin and an as-yet unnamed development of 36 homes in Colchester. The five structures combined will add 105 affordable homes across the state of Vermont.

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Legislation signed into law in June in Texas expanded the state’s exemption from property tax for property owned by charitable organizations that provide housing for people experiencing homelessness. The law changes the number of years an organization needs to be in existence, depending on the size of the county. The legislation also requires the property to be located on a tract of land that’s at least 15 acres and removes the requirement that the property must be on a single campus.

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The Ohio Housing Finance Agency published an addendum to its 2020-2021 qualified allocation plan that provides the possibility of additional LIHTC and Housing Development Loan (HDL) funding for 2019 and 2020 9% LIHTC awardees who face a funding gap due to increases in construction costs related to increased material and supply costs. The awards will be granted on a first-come, first-served basis, with requests due by Dec. 31. Owners may request up to $100,000 in additional LIHTCs and up to $1 million in additional HDL funds. For each additional dollar of LIHTC awards, the development team’s award limit will be reduced by 1.5 times for the upcoming 2022 or 2023 9% LIHTC round.

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Nevada Gov. Steve Sisolak signed legislation May 30 that lifts the sunset date on the ability to transfer state LIHTCs while requiring that the transfer take place at least 45 days before the project is closed. The bill eliminates the previous sunset date of Jan. 1, 2030, for transferring state credits. It also allows the Housing Division of the Department of Business and Industry the right to determine upon a transfer of credits whether the amount of credits should be lowered based on cost.

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Texas Gov. Greg Abbott signed legislation June 15 that changes the scoring system for allocating LIHTCs to encourage the development of affordable housing near veterans’ hospitals. The law adds a provision to the state’s LIHTC scoring system adding points for an application for a property in a county of between 1 million and 4 million residents that is located within 2 miles of a veterans’ hospital, veterans affairs medical center or veterans’ affairs health center. The change takes effect Sept. 1.

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The Illinois Legislature sent June 29 the COVID-19 Affordable Housing Grant Program Act to the desk of Gov. J.B. Pritzker. H.B. 2621 would extend the state’s LIHTC five years through Dec. 31, 2026. The bill authorizes grant funding to bolster construction and rehabilitation of as many as 3,500 affordable homes by Dec. 31, 2024, in areas disproportionately affected by the global pandemic. The bill also would require assessment of LIHTC properties in Cook County using an income-approach as well as a property tax incentive policy that would provide reduction in assessed value for both subsidized and market-rate owners that provide affordable homes.

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A June 22 report by the Missouri Housing Development Commission recommended that the state allow accelerated redemption for up to 50% of state LIHTCs, an increase from 20% in a pilot program. Missouri’s state credit is generally redeemed ratably over a 10-year period and the accelerated program allows recipients to redeem 71% of the credits in the first five years. The study committee found that accelerating redemption of the state LIHTC increased the equity pricing by more than 10 cents per tax credit dollar, which could mean an additional 86 units of affordable housing could be built annually with no increase in spending.

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The Indiana Housing and Community Development Authority announced June 24 that it issued more than $36 million in LIHTCs and $60 million in bonds for affordable housing to preserve 516 residences across the state. Four developments received the issuance. Bloomington Rental Assistance Demonstration II apartments in Bloomington, Indiana, will receive $30 million in multifamily bonds and $23.5 million in tax credits to preserve 204 units. The Douglas Pointe Apartments III in Hammond, Indiana, will receive $6.7 million in multifamily bonds and $3.4 million in tax credits to preserve 64 affordable units. Emerald Pointe Apartments in South Bend, Indiana, will receive $17 million in multifamily bonds and $6.7 million in tax credits to preserve 168 units. The Misty Glen Apartments in Hebron, Indiana, will receive $6.5 million in multifamily bonds and $3.1 million in tax credits and to preserve 80 units.

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The Arizona Department of Housing announced June 28 that its 2021 LIHTC allocation awarded $227 million in federal LIHTCs to 14 developments, totaling 1,068 homes. Developments in Phoenix, Tucson, Apache Junction, Yuma, Flagstaff, Avondale and other locations, including Native lands, received credits. Twelve of the 14 future residences are new construction. Additionally, the department opened its comment period for its 2022 qualified allocation plan.

LIHTC Dealmaker

The city council in Columbus, Ohio, approved plans June 7 to demolish a former music venue to make way for 180 apartments of affordable housing. The Sinclair Family Apartments will receive $2.2 million from Columbus’ Affordable Housing Bond Fund as well as $4.4 million in low-income housing tax credits (LIHTCs) from the Ohio Housing Finance Agency. The $3.3 million development is a cooperation between Columbus Metropolitan Housing Authority and the NRP Group of Cleveland. Residents will earn between 30% and 60% of the area median income (AMI). For 45 years, the site hosted Alrosa Villa, a popular music venue that was the location of a 2004 shooting in which former Pantera guitarist “Dimebag” Darrell Abbott, along with four others, was killed.

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Investor Hunt Capital Partners and developer Housing Initiatives LLC closed June 2 on more than $8.2 million in LIHTC equity for a 46-unit development in Vancouver, Washington, to house those experiencing homelessness. The Vancouver Housing Authority will provide public housing subsidies for the apartments. The Meridian will host four three-story walk-up buildings, located on a vacant lot in northern Vancouver.

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Investor Hunt Capital Partners and co-developers HumanKind Housing LLC and Kingdom Development Inc. closed June 7 on $4 million in LIHTC equity financing to acquire and rehabilitate 85 affordable, affordable, multifamily homes in Merritt Island, Florida, near Cape Canaveral. The deal will preserve Tropical Manor Apartments’ nine two-story garden-style apartment buildings with two-bedroom/one-bathroom homes earning as much as 60% of the area median income. The financing also will result in continued affordability for residents as the Section 8 Housing Assistance Payment contract will extend for 20 years. Five units will comply with the Americans With Disabilities Act. The total cost of the development is $17.3 million. Construction is expected to be completed in seven months.

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Oakland-based Merritt Community Capital has closed the first round of funding for its Fund XXII with $102 million for nine investments that would create 452 affordable homes across California. Fund XXII had 11 investors at the close of the first round of funding. Among the nine developments is Los Angeles’ West Terrace, a 64-home permanent supportive housing development for extremely low- and very low-income households, many of whom are experiencing homelessness and/or have a mental health disability.

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Hunt Capital Partners and developer D.L. Horn and Associates closed June 3 on more than $8.5 million in LIHTC equity financing for the acquisition and rehabilitation of The Hovley Gardens in Palm Desert, California. The facility includes 16 two-story, walk-up residential buildings totaling 163 affordable, multifamily homes and one community building. Eighteen of the apartments will be restricted to households earning up to 30% of the AMI, 55 will be restricted to households earning up to 45% of the AMI, 82 will be for households earning up to 50% of the AMI, and seven units will be for those earning up to 60% of the AMI.

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Stride Senior Residences, a 90-home apartment complex for those 62 and older near Decatur, Georgia, opened May 27. The development was financed through an allocation of 9% federal and state LIHTC. Seventy-two of the 90 homes are for those making 60% or less of the AMI. The residences are part of the larger Decatur Crossing mixed-use development, which includes numerous businesses including Sprouts Farmers Market Grocery, Verizon Wireless, Chick-fil-A as well as close proximity to Emory Decatur Hospital. The Tapestry Development Group, a nonprofit based in Decatur, and Atlanta developer and management company Columbia Residential will serve as co-owners and property managers.

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Bensalem Veterans Residences, a 40-home affordable residential community for seniors and veterans ages 62 and up, opened June 9 in Bensalem, Pennsylvania. Philadelphia-based Pennrose Properties built the homes with LIHTC awarded by the Pennsylvania Housing Finance Agency. Santander Bank invested in the credits. The nearly $15 million, 39,673-square-foot facility offers one-bedroom apartments as well as on-site services from the Bucks County Department of Veteran Affairs, Bucks County Veterans Center and Salute 2 Service.

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Woda Cooper started construction June 10 on Harper’s Crossing, a three-story, 60-apartment building in Plainfield, Indiana, located in an opportunity zone. The $12.9 million development features one-, two- and three-bedroom homes and received LIHTCs from the Indiana Housing & Community Development Authority. Six apartments are designated for those with physical disabilities. The tenants will earn between 30% and 80% of the AMI. Columbus, Ohio-based Huntington Bancshares Inc. invested in the tax credits as well as provided a construction loan.

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Woda Cooper started construction June 9 on Proctor Place, a $12.6 million, 61-apartment, multifamily building in Indianapolis. The apartments will serve those earning between 30% and 80% of the AMI. Fifteen of the homes are reserved for veterans who have experienced homelessness, with Woda Cooper teaming up with the Hoosier Veterans Assistance Foundation as well as receiving a $10.3 million LIHTC allocation from the Indiana Housing & Community Development Authority for the homes. The property is named in honor of Sgt. Joey Proctor, a member of the Indiana Army National Guard who was killed in action in Iraq in 2006.

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The Retreat at Harbor Pointe, a 100% affordable, 246-apartment property along the Elizabeth River in Virginia Beach, Virginia, opened June 1. The Lawson Companies developed the $56 million property, which included a $22 million LIHTC equity investment from Wells Fargo. The development features two- and three-bedroom apartments for those earning as much as 80% of the AMI.

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The Family YMCA property in Tarrytown, New York, is slated to become 109 affordable apartments after a June 9 groundbreaking ceremony. The $52 million, 41,537-square-foot redevelopment is funded with $16.5 million in federal LIHTC equity. The property also received $8.5 million in tax-exempt bonds from New York State Homes and Community Renewal. Wilder Balter Partners Inc. of Chappaqua, New York, purchased the land for $6.5 million and is developing the site, which includes a combination of renovation, demolition and new construction. The future homes will be for those 55 and up. The site also plans to add municipal parking.

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Construction began in June on Haven at South Atlanta, an 84-apartment property on the southeast side of Atlanta. Seventy-one of the homes are LIHTC apartments for people earning 50% and 60% of the AMI. Pennrose LLC hopes to complete construction next year. The development, which features four three- to four-story buildings, received $25.8 in federal LIHTCs.

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Vera Cruz Village, a forthcoming affordable housing development in Santa Barbara, California, received $10.3 million in federal LIHTCs June 19. The Housing Authority of Santa Barbara plans to build 28 affordable homes for those with special needs, including those who have experienced homelessness. The village, which carries a $17.6 million price tag, is expected to begin construction in the fall with a 2022 completion.

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A century-old schoolhouse in disarray in Petersburg, Virginia, is scheduled for redevelopment into 50 apartments as well as additional single-family homes in the neighborhood with 4% LIHTCs and HTCs as funding. Developer EquityPlus looks to convert the approximately 53,000 square feet of Virginia Avenue Elementary School into homes for veterans and seniors who are on low and/or fixed incomes. EquityPlus purchased the land from the city for $1, along with paying $740,000 to the local school system. A vote was scheduled for July to award EquityPlus title on the building. Work is expected to begin in September.

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Grace Brown House, a $7.7 million affordable housing development in New York’s Cortland County, began construction June 17. Developer Christopher Community Inc. is building the three-story, 25-home structure with approximately $4.6 million in federal LIHTCs for those earning 50% of the AMI. The development also received a $365,000 subsidy from New York Homes and Community Renewal as well as $1.9 million from the New York Homeless Housing and Assistance Program. Two of the apartments will be reserved for individuals with mobility impairments.

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Perseverance, a $13.9 million, 100% affordable, 32-apartment structure, opened in June 17 in Cincinnati. Cincinnati Center City Development Corporation and Over-the-Rhine Community Housing, two Cincinnati-based developers, partnered to rehabilitate three historic buildings and construct another using NMTCs, state and federal HTCs as well as $5.8 million in 9% LIHTCs. The apartments are reserved for those earning 30% to 60% of the AMI. The development also included five street-level commercial spaces totaling 6,726 square feet.

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Lincoln, Nebraska-based Excel Development Group received $2.7 million in federal and $2.7 million in state LIHTCs for Maplewood Apartments in McCook, Nebraska. Excel is developing the 24-home property, which is an acquisition/rehabilitation of an existing property, for those 55 and older. Three of the homes will be available to those earning 40% of the AMI, 10 for those earning 50%, and 11 for those at 60%. Amenities will include a community garden.

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The Michaels Organization began June 23 its renovations to the 201-home Bergan Circle housing community in Springfield, Massachusetts. The Massachusetts Housing Finance Agency (MassHousing) provided a $13.3 million construction loan as well as a $7.9 million repair loan for upgrades to the building envelope and water infiltration remediation; installation of new windows, flooring and appliances; kitchen, bathroom and heating, venting and air conditioning upgrades; as well as replacing sanitary and water risers on one building.

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MassHousing closed on approximately $19 million in housing to Trinity Financial Inc. to develop the second phase of the 111-home Enterprise Center in Brockton, Massachusetts. The second phase is being constructed using $30.6 million in state and federal 4% and 9% LIHTC equity. Bank of America invested in the tax credits. Of the 111 new homes in the new five-story building, 12 will be restricted to households earning 30% of the AMI, one for 50% of the AMI, 33 for households earning up to 60% of the AMI, 12 for 80% of the AMI, and the remaining 53 will be market-rate apartments. The development’s first phase opened in 2015, with 224 homes total between the two stages.

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A retirement community vacant since 2005 in Maywood, Illinois, will become 100 homes for seniors using $3.5 million in state LIHTCs. Celadon Partners also received a $29.7 million construction loan from the Illinois Housing Development Authority’s conduit bond program as well as a $24.9 million permanent loan for the future Maywood Supportive Living community. U.S. Bank invested in the credits. Centrust Bank donated the property. Homes will be available for those earning up to 60% of the AMI. The building, formerly home to the Baptist Retirement Home, dates back to 1930 and is on the National Register of Historic Places.

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The Magnolia, a 65-apartment development in Salt Lake City, Utah, was completed in June. Utah-based Cowboy Partners developed the five-story, 46,213-square-foot, $17 million residence using $10.5 million in 4% LIHTC equity. The studio apartments will target those who have experienced homelessness. Utah nonprofit The Road Home will operate the property; another Utah-based nonprofit, Shelter the Homeless, owns the location.

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Monarch Private Capital closed June 29 on $20 million in LIHTCs on a development for seniors named The Gateway at Augusta in Augusta, Georgia. The property will host 122 homes for those 55 and older earning up to 60% of the AMI; 18 apartments will host one bedroom and 104 will be two-bedroom homes. Gateway Development Corporation is developing the residences. The investment is expected to be available to tenants in 2023.

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Enterprise Community Partners announced June 29 the closing of an $800 million equity fund that would acquire and preserve more than 7,500 affordable homes in the next two years. The fund, which has already preserved 3,000 homes, aims to preserve the affordability of critical homes in underserved markets, advance racial equity and boost upward mobility by implementing green improvements and resident services. The fund has received $229 million in equity commitments thus far, exceeding its initial $200 million target.

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Amazon directed $300 million from its newly launched $2 billion Housing Equity Fund to build affordable housing units in three states, partnering in each locale with local transit authorities. The online retail giant intends to supply below-market loans, lines of credit and grants to developers in Washington’s Puget Sound region as well as Arlington, Virginia, and Nashville, Tennessee, with the goal of constructing 3,000 affordable homes. The funding will target households earning between 30% and 80% of the AMI.

LIHTC People

The U.S. Supreme Court released a decision June 23 ruling that the structure of the Federal Housing Finance Agency (FHFA) was unconstitutional and allowed President Joe Biden to fire the director. The decision allowed the president to dismiss and replace Mark Calabria as FHFA director. Calabria was an appointee of President Donald Trump. The court ruled that the Recovery Act, which placed FHFA enterprises Fannie Mae and Freddie Mac under government conservatorship, violated the constitutional separation of powers dictate by restricting the president’s ability to remove the FHFA head. Biden selected Sandra L. Thompson June 23 as the acting director of FHFA. Thompson served since 2013 as deputy director of the division of housing and mission goals, overseeing FHFA’s housing and regulatory policy, capital policy, financial analysis, fair lending and all mission activities for Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Before that, Thompson worked at the Federal Deposit Insurance Corporation, for more than 23 years in a variety of positions, including director of the division of risk management supervision.

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Cinnaire, a Michigan-based nonprofit that supports community development through financial opportunities, announced June 2 the addition of three new board members, Anne McCulloch, Jeffery Benson and Quinetta Roberson. Roberson is the John A. Hannah Distinguished Professor of Management and Psychology at Michigan State University. McCulloch is the president and CEO of Housing Partnership Equity Trust. Benson is the president and CEO of Case Credit Union in Lansing, Michigan. Roberson and McCulloch will serve for three years; Benson will serve for two.

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Wisconsin Housing and Economic Development Authority (WHEDA) announced new roles June 4 for two members of its staff. Erica Steele will serve as tribal liaison. Steele has more than a decade of experience working in community development and currently serves as WHEDA’s strategic market liaison. Jon Searles will become WHEDA’s community and economic development officer, taking over for Deby Dehn, a 15-year WHEDA member whose duties also included the tribal liaison role.

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Mike Gerber was appointed the interim CEO of the National Association of Housing and Redevelopment Officials (NAHRO) June 14 after its previous CEO, Adrianne Todman, was confirmed as deputy secretary of the U.S. Department of Housing and Urban Development. Gerber will serve as interim CEO concurrently with his role as president and CEO of the Housing Authority of the City of Austin, Texas, positions he’s held since 2012. Gerber is a longtime member of NAHRO and has served in multiple leadership positions, including as chair of the Strategic Plan Advisory Committee and the Legislative Network.

LIHTC Bond

The Wisconsin Housing and Economic Development Authority issued $156 million in housing revenue bonds to finance 10 developments in its loan closing pipeline, providing more than 800 units of affordable housing in seven Wisconsin cities. Developments in Fitchburg, Madison, Milwaukee, Oregon, Oshkosh, Sturgeon Bay and Wausau were awarded the funds. All 10 developments received federal 4% low-income housing tax credits (LIHTCs); eight also were awarded LIHTCs at the state level.

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The Filipino Community Village, a 95-apartment property near Seattle built with LIHTC equity and bond financing, is scheduled to begin leasing up the property this summer. Beacon Development Group, HumanGood and Filipino Community of Seattle nonprofit received funds from the City of Seattle Office of Housing, King County Housing and Community Development, state housing trust fund, LIHTC equity and tax-exempt bonds issued by the Washington State Housing Finance Commission. The $36 million, five-story property expanded on an existing Filipino Community Center built in 1965. The homes are for those 55 and older earning up to 30%, 50% and 60% of the county’s area median income (AMI). The first floor features a 4,900-square-foot learning center for youths.

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Oregon’s Housing Stability Council approved June 4 a 72-apartment property in Talent, Oregon. Renaissance Flats is funded with $14.4 million in federal 4% LIHTC equity and bonds. The development aims to help those displaced by the September 2020 Almeda Fire, which destroyed 2,700 structures, displaced approximately 3,000 Oregonians and killed three people. The developer, Commonwealth Development Corporation, is working with local nonprofit Natives of One Wind Indigenous Alliance to assist with leasing of property. Renaissance Flats will host two- and three-bedroom apartments in six buildings, catering to those earning between 30% and 60% of the AMI. Construction is anticipated in 2022.

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Construction was completed June 23 on Union Square Apartments, a $21 million supportive housing development for in the lesbian, gay, bisexual, transgender, queer/questioning, intersex and agender/asexual community in Rochester, New York, a community disproportionately affected by homelessness, housing insecurity and health issues. The development, financed with $4.2 million in tax-exempt property bonds from the New York State Housing Finance Agency well as $7.1 million in federal 4% LIHTCs, will host 72 apartments for those earning as much as 80% of the AMI. Twenty-one of the homes are reserved for those living with HIV or who are 55 and older and require assistance with daily living. Home Leasing developed the property.

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Two Northern California developers, PEP Housing and EAH Housing, intended to break ground July 1 on the Pony Express Senior Apartments in Vacaville, California. The property will be financed with bonds, 4% state LIHTC equity and will receive 59 project-based Section 8 vouchers from the Vacaville Housing Authority. The three-story development will provide 60 homes, with 59 for seniors plus one for a building manager, as well as 15 apartments for those experiencing homelessness.

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Renovations were completed in June on Pilgrim Baptist Village Apartments in Newark, New Jersey, a $90 million redevelopment that included a 4% LIHTC equity investment by PNC Real Estate. Hudson Valley Property Group, the developer, received financing on the 305 homes from bonds issued by the New Jersey Housing and Mortgage Finance Agency as well as Fannie Mae debt through Key Bank. The development also received a subsidy from the U.S. Department of Housing and Urban Development for project-based Section 8 contracts. The work included major unit upgrades, a new energy management system, accessibility upgrades, common areas and new roofing as well as individual apartment changes such as new kitchens, doors and water-saving fixtures.

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The Michaels Organization, a New Jersey-based developer, began construction June 8 on Halewa’olu Senior Residences in Honolulu. Construction of the $93.3 million development included $48 million in tax-exempt bonds issued by Hawaii’s Housing Finance and Development Corporation. The apartments are reserved for those making between 30% and 80% of the AMI, with the majority set aside for those at 60% AMI. The 17-story mid-rise building will feature 156 one- and two-bedroom affordable apartments for those ages 60 and older. The development is scheduled for completion in 2023.

Journal Category: 
Low-Income Housing Tax Credit
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