Low-Income Housing Tax Credits News Briefs - December 2010

Wednesday, December 1, 2010

AFFORDABLE HOUSING INDUSTRY

The Internal Revenue Service (IRS) issued Notice 2010-74 in October to inform taxpayers that there is no unused 2010 low-income housing credit (LIHTC) carryover amount to be redistributed to qualified states. Each year, the IRS publishes the amount of unused housing tax credit carryovers allocated to state housing credit agencies for a calendar year. Normally, state housing agencies that have allocated their entire authority may request an additional allocation from a national pool of unused credits. However, this year there are no unused LIHTCs and consequentially there is no national pool amount from which they can be redistributed. Download a copy of Notice 2010-74 from www.taxcredithousing.com.

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In another notice, Revenue Procedure 2010-40, the IRS announced the inflation-adjusted low-income housing tax credit and private activity bond caps for calendar year 2011. The amount used to calculate the state LIHTC ceiling will be $2.15 per resident or $2,465,00, whichever is greater. The amounts represent increases from the 2010 formula of 5 cents per capita and $125,000, respectively. The amount used to calculate states' private activity bond volume caps will be the greater of $95 per state resident or $277,820,000, representing respective increases of $5 per capita and $4.045 million. Access a copy of the notice on www.taxcredithousing.com.

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The U.S. Department of Agriculture (USDA) Rural Housing Service announced the availability of more than $14 million under its Section 515 Multi-Family Housing Preservation Revolving Loan Fund (PRLF) Demonstration Program for fiscal year 2011. The funding will be allocated to not-for-profit organizations, housing finance agencies and other qualified intermediaries to carry out a demonstration program to provide revolving loans for the preservation and revitalization of low-income multi-family housing (MFH). Housing that receives assistance from this demonstration program must be financed by USDA Rural Development's MFH loan program. The deadline to submit applications is 5 p.m. on January 10, 2011. See the November 9 Federal Register notice for more details.

DEALMAKERS

Boston Financial Management closed its first low-income housing tax credit (LIHTC) investment fund, BF Advantaged Tax Credits I. The initial closing of the $75 million total fund was $40 million and a second closing occurred on November 30. Boston Financial said the fund now consists of four investors, three of them are existing Boston Financial investors and one is new to the industry. The fund's maximum size is $100 million.

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Snyder Homes broke ground on Cedar's Edge Apartments, an affordable rental development in Essex, Vt. Essex has 12 percent of Chittenden County's housing, but only 30 affordable family apartments. Cedar's Edge will add 24 two-bedroom and six one-bedroom units. After the development is complete, the Champlain Housing Trust and Housing Vermont will purchase the property from Snyder Homes. The organizations have raised $5.5 million in financing, including federal and state LIHTC equity, a U.S. Housing and Urban Development (HUD) grant, and Vermont Community Development and HOME program funds to develop the property and keep it affordable. Construction is slated to be finished by the summer of 2011.

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Boston Capital announced its investment in Heritage at McDonough, a 105-unit senior development in McDonough, Ga. Heritage at McDonough will include 51 one-bedroom and 54 two-bedroom units in two three-story buildings. Dishwashers, washer and dryer connections, ceiling fans, computer desks, storage and balconies or patios will be among the unit amenities. Community amenities will include a security gate, clubhouse, pool, courtyard, fountains, gazebo, picnic area, activity rooms, business center, fitness center, salon area and a laundry facility. The property will serve residents aged 55 or older with incomes at 60 percent of less of the area median income (AMI).

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Highridge Costa Housing Partners announced that it has completed construction on its 240-unit affordable rental development, Oakwood Apartments in Gardena, Calif., and has opened the building to tenants earning between 30 and 60 percent of AMI. Oakwood offers two- three- and four-bedroom units with monthly rents starting at $390. HCHP co-developed the project along with not-for-profit Housing Alternatives Inc.

STATE

A report on Vermont's four not-for-profit affordable housing providers recommends consolidating the agencies and implementing performance measures to increase effectiveness and accountability. The Vermont Department of Economic, Housing and Community Development (DEHCD) submitted the final report, "State of Vermont: Enhancing Investments in Affordable Housing," to Gov. Jim Douglas in October. The report contains findings from a review of the agencies – DEHCD, Vermont Housing Finance Agency, Vermont State Housing Authority, and Vermont Housing and Conservation Board – along with additional recommendations for improving the efficiency of the state's affordable housing delivery system. Read the final report online at www.dhca.state.vt.us.

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A commission from Texas' Legislature is reviewing the state Department of Housing and Community Affairs' (TDHCD's) mission and performance in accordance with the Texas Sunset Act. The law requires that the Sunset Commission periodically review a state agency to determine if it is still needed and what improvements can be made to ensure that state funds are well-spent. The commission's review process includes an evaluation and public testimony period before it adopts its final recommendations. When the Legislature reconvenes in January, it will use the recommendations to decide whether an agency continues to operate. Information about the Sunset process is available at www.sunset.state.tx.us.

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The Arizona Department of Housing (ADOH) announced that it will conduct its annual low-income housing tax credit (LIHTC) workshop on January 10, 2011. ADOH said the workshop will consist of two sessions and provide an update on changes and refinements to the LIHTC application process. Developers or their development team designee who plan to submit a LIHTC application next year must attend the four-hour morning training session, which will give an overview of the 2011 LIHTC application process. A certificate of attendance must be provided as part of the application. The afternoon session, also geared for developers, will emphasize the long-term compliance rules and regulations that govern LIHTC properties. Developers who have already attended ADOH-approved compliance training in 2010 need not attend, but they will need to provide the compliance training certificate as part of the 2011 LIHTC application process. The workshop will be held at the Phoenix Airport Marriott Hotel. Attendees may find more information and register online at www.azhousing.gov.

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New York State Homes and Community Renewal (HCR) approved a total of $287.8 million in funding to build and rehabilitate 1,854 affordable homes, create jobs and stimulate local economies. Boards of the New York State Housing Finance Agency and the New York State Affordable Housing Corporation approved $271.8 million in financing, and the Housing Trust Fund Corporation board approved $16 million in grants and loans through the Community Development Block Grant program, the Subprime Foreclosure Prevention program, the Homes for Working Families program and the Urban Initiatives program. HCR was also able to use the New Issue Bond Program to leverage low interest rates on the funds. A list of funding recipients is available on www.housing.ny.gov.

PEOPLE IN THE INDUSTRY

The Vermont Housing Finance Agency (VHFA) promoted Lisa Clark to the position of finance operations manager. In her new role, Clark will work with the agency's chief financial officer, investment management and controller to develop and implement the finance department's strategy to optimize systems and operations. She is also responsible for managing accounts payable, cash receipts, loan recounting and compliance monitoring. Clark joined VHFA in 1997 and was most recently its senior financial analyst.

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The Federal Home Loan Bank (FHLB) of Seattle appointed Gregory Hancock to serve on the bank's Affordable Housing Advisory Council as its Wyoming representative. Hancock is president and CEO of Wyoming Housing Network, a NeighborWorks affiliate, where he manages the development and preservation of affordable and workforce housing. The bank also reappointed council members Carol Gore, president and CEO of Cook Inlet Housing Authority in Anchorage, Alaska, and Peter Hainley, executive director of Community and Shelter Assistance Corp. in Newburg, Oregon, to serve new three-year terms. The council includes one member from each state in the bank's service territory, and advises the FHLB of Seattle on housing and economic development programs and needs across the eight states the bank serves.

BONDS

MassDevelopment issued a $600,000 bond on behalf of HW3 Housing Associates to convert a former manufacturing facility in Gardner, Mass. to a 78-unit assisted living facility. The facility will feature 78 studio apartments with large common areas that include living rooms, a library, dining room, wellness center and a kitchen. Staff will assist residents with daily activities and housekeeping. All units will be rented to households earning no more than 50 percent of the area median income. MassDevelopment said the bond financing was critical for the project to qualify for tax credit assistance program funds through the Massachusetts Department of Housing and Community Development.

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The Maryland Department of Housing and Community Development (DHCD) announced that it will accept new applications for New Issue Bond Program (NIBP) financing as a result of added flexibility and funding capacity. Earlier this year, the Treasury awarded DHCD a total of $90 million in capacity under NIBP, which provides low, fixed-interest rate tax-exempt bond financing for qualified projects. DCHD said the Treasury recently gave the agency more flexibility to implement NIBP, including allowing an additional 12 months to close financing for qualified projects, increasing the number of times NIBP closings may occur from three to six, and increasing overall funding capacity. DHCD has closed two transactions for seven multifamily projects under NIBP to date, and also continues to provide financing through its multifamily bond program. More information is available on the agency's website at www.mdhousing.org.