Low-Income Housing Tax Credits News Briefs - December 2015

Tuesday, December 1, 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

The Internal Revenue Service (IRS) released Revenue Procedure (Rev. Proc.) 2015-49 Oct. 13. Rev. Proc. 2015-49 provides the amounts of unused 2015 Low-Income Housing Tax Credit (LIHTC) carryovers allocated to qualified states under Section 42 of the Internal Revenue Code (IRC). There was $2.59 million in unused LIHTCs available. California received the largest allocation with $388,272. Rev. Proc. 2015-49 is available at www.taxcredithousing.com.

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On Oct. 30, the Federal Housing Finance Agency (FHFA) released its “Annual Housing Report–2015.” The report describes the 2014 housing activities of Fannie Mae and Freddie Mac. According to the report, Fannie Mae and Freddie Mac provided funding for 738,449 multifamily rental units. Included in the 2014 housing goals established by FHFA is a low-income multifamily goal for rental units for families in multifamily properties with incomes no greater than 80 percent of Area Median Income (AMI) and a very low-income multifamily sub-goal, for rental units for families in multifamily properties with incomes no greater than 50 percent of AMI. FHFA also found that Fannie Mae and Freddie Mac’s 2014 performance on the low-income multifamily goals and the very low-income multifamily sub-goal exceeded the established benchmark levels. The report is available at www.taxcredithousing.com.

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On Oct. 28, the HOME Coalition released the report, “Building HOME: The HOME Investment Partnerships Program’s Impact on America’s Families and Communities.” The report analyzes HOME’s economic impact in terms of leveraged investments, jobs supported and local income generated at both the state and national levels. The HOME Coalition found that $26 billion in HOME funds have attracted more than $117 billion in additional public and private resources to build and preserve nearly 1.2 million affordable homes and provide rental assistance to 260,000 families at risk of homelessness since 1992. This investment supported more than 1.5 million jobs nationwide and has generated $94 billion in local income. Also featured in the report are more than 100 HOME success stories. The report is available at www.taxcredithousing.com.

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Michael A. Stegman, senior policy adviser at NEC-White House, spoke to attendees at the annual conference of the National Association of Affordable Housing Lenders (NAAHL) and a copy of his address was released Oct. 29. In his remarks, Stegman discussed ongoing housing market recovery, government-sponsored enterprise (GSE) reform and Treasury-U.S. Department of Housing and Urban Development (HUD) multifamily risk-sharing partnership. He closed with comments regarding NAAHL’s ideas on how further clarification of recent Community Reinvestment Act (CRA) guidance might expand bank financing of affordable rental housing and increase economic opportunity for low-income people and communities.

 

STATE BRIEFS

The California Tax Credit Allocation Committee (TCAC) released the adopted regulations for its LIHTC program Oct. 21. Changes for developers of 4 percent credit transactions include that the maximum developer fee that may be included in development costs and eligible basis is 15 percent of the development’s unadjusted eligible basis–that’s for new construction or rehabilitation. All developer fees exceeding $2.5 million plus $10,000 per tax credit unit over 100 shall be deferred or contributed as equity to the project. Minimum rehabilitation project costs have increased from $10,000 to $15,000 in hard construction costs. California will also no longer require properties with 16 or more units have an on-site manager’s unit, or that those with at least 161 units must provide a second manager’s unit. Instead, TCAC will now allow property managers to commit an equivalent number of fulltime, on-site property management staff and desk or security staff in lieu of on-site manager units. In addition, a mandate was withdrawn that would have required developers of new housing to contribute a share of net equity from a future transfer to an affordable housing trust fund. The adopted regulations are available at www.taxcredithousing.com.

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On Oct. 6, Georgia State University’s Health Policy Center released the report, “Health Impact Assessment of the 2015 Qualified Allocation Plan for Low-Income Housing Tax Credits in Georgia.” The assessment identifies how the state’s allocation of LIHTCs can be more efficiently used to support health-promoting affordable housing development. The Health Policy Center found that affordable housing investments improved health and quality of life and increased opportunity for Georgia residents. The report also identified opportunities to affect health outcomes by altering the scoring criteria used to assign LIHTCs. The assessment found that navigating affordable housing development toward areas identified as lower risk or higher opportunity could help as many as 200 individuals per year live longer, healthier lives. The report is available at www.taxcredithousing.com.

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The Virginia Center for Housing Research at Virginia Tech released the 2015 report, “The Impact of Energy Efficient Construction for LIHTC in Virginia.” The technical report identifies possible benefits of focusing on energy efficiency in LIHTC properties. Virginia Housing Development Authority (VHDA) shifted policy focus during the past five years by implementing new standards for energy efficiency and sustainable construction within the LIHTC program. This was done by providing a scoring incentive for applicants who chose to develop in compliance with green certification standards. This resulted in 16.6 percent less energy usage in LIHTC properties than was estimated. The report indicates that an energy efficient design and construction standard could have a positive effect on LIHTC property residents in terms of reduced utility costs. The report is available at www.housingvirginia.org.

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The Wyoming Community Development Authority (WCDA) board of directors approved $2.5 million in HOME Investment Partnership program funding and $1.3 million in LIHTCs Sept. 16 to affordable housing developments throughout the state. The funding will go to financing the development of 104 rental homes in three multifamily properties. Grand Harmony Apartments in Cheyenne will provide 33 rental homes. Crow Creek Apartments in Cheyenne will provide 59 rental homes. Rock Creek Apartments in Wheatland will provide 12 units.

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Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds, together with Dave Jamison, Iowa Finance Authority executive director, announced a new workforce housing loan program. The program has $5 million available to provide financial assistance in the form of low-cost repayable loans to cities and counties. It is available to all cities throughout the state on a competitive basis. Cities with populations of less than 50,000 that have shown an annual job growth during the past three years will be awarded additional points. The maximum loan amount per project is the lesser of $1 million or $50,000 per assisted workforce housing rental unit. The loans will have a 1 percent interest rate with a maximum term of 21 years. Workforce housing will not be age restricted and will be limited to households earning 140 percent or less of the statewide median income, which is $94,500 per household. Applications in the initial Workforce Housing Loan program funding round were due to the Iowa Finance Authority by Nov. 2.

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The Minnesota Housing Finance Agency (MHFA) announced the investment of $92.4 million to build and preserve 1,420 affordable rental homes throughout the state. That total includes $3.5 million from the Greater Minnesota Housing Fund, the Metropolitan Council and the Family Housing Fund. According to a press release, MHFA expects funding awards to leverage private and local resources to support $236 million in total statewide development, as well as support 2,400 jobs.

DEALMAKERS

Boston Capital announced Oct. 7 an investment in the construction of the Jackson Workforce Apartments in Seattle. The 68-unit affordable housing community will be built with low-income housing tax credit (LIHTC) equity. Jackson Workforce Apartments is available to individuals and families earning 60 percent or less of the area median income (AMI). Of the 68 rental homes, 15 will be reserved for families with incomes at or below 50 percent of the AMI. There will be 24 studios, 27 one-bedroom, 16 two-bedroom and one three-bedroom homes in a six-story building. Amenities will include a community room with computer bar, a kitchen, a bike room and common area laundry rooms. The construction of Jackson Workforce Apartments is expected to generate $7.3 million in local salaries and create up to 77 jobs.

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The Housing Trust Group announced Oct. 13 financing has closed for Wagner Creek Apartments in Miami. Financing for the 73-unit affordable housing development includes $17.1 million in 9 percent LIHTC equity, a $3.4 million construction loan, $222,000 from Miami-Dade County’s affordable housing surtax program, $840,100 from a city of Miami HOME loan and $606,274 of developer equity. Development costs are expected to be $22 million. The mixed-income property will set aside 60 rental homes for tenants earning at or below 60 percent of the AMI. Eight apartments will be reserved for those earning 33 percent or less of the AMI and five units are reserved for moderate income levels. Units will also be set aside for workforce housing.

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Chelsea Investment Corporation was honored Oct. 14 as San Diego’s 2015 Builder of the Year. The award, presented at the 2015 ICON awards ceremony by the Building Industry Association of San Diego County (BIA). Chelsea Investment Corporation was also honored for developing San Diego’s Best Affordable Project in 2015. The 203-unit Alpha Square will be available to homeless and very low-income individuals. Alpha Square is a $47.6 million transit-oriented, mixed-use development. Funding was provided by the San Diego Housing Commission and Civic San Diego. Built on a 20,000-square-foot lot, the six-story building’s amenities will include a computer lab, multipurpose room, laundry facilities and a community courtyard.

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On Oct. 27, BRIDGE Housing announced the acquisition of Ocean View Senior Apartments. BRIDGE Housing purchased the affordable housing complex from National Church Residence and will continue renovations as planned. Renovations will replace aging building elements and systems with more efficient and higher-performing alternatives. Financing will include tax-exempt bonds, funds provided by the California Housing Finance Agency, a restructuring of existing debt with the San Mateo County and the Housing Endowment and Regional Trust (HEART), as well as LIHTC equity. Ocean View Senior Apartments is available to seniors earning 80 percent or less of the AMI.

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The grand opening of The East Harlem Center for Living and Learning in Manhattan, N.Y., was Oct. 16. Construction of the mixed-use, multifamily building was made possible with private and public funding. The school, office space and park were financed through a $32.5 million grant from the School Construction Authority’s Charter Facilities Matching Grant Program, and $20 million raised by Harlem RBI. Funding for the affordable housing portion included but was not limited to $10.5 million in LIHTC equity provided by Enterprise. An additional $2.1 million predevelopment loan was also provided by Enterprise. A $13.5 million first mortgage and a $5.7 million second mortgage were provided by New York Housing Development Corporation, a $6.2 million loan from New York Housing Preservation and Development and a $142,654 New York State Energy Research and Development Authority (NYSERDA) grant. Chase Bank provided a $13.6 million standby letter of credit. The 143,000-square-foot development consists of 88 affordable rental homes, a 54,000-square-foot home for DREAM Charter School and 6,000 square feet of nonprofit office space for Harlem RBI. The 11-story Yoro Tomo Apartments is 80,000 square feet and consists of 18 studios, 41 one-bedroom apartments, 25 two-bedroom apartments and four three-bedroom apartments. Amenities include an exercise room, a bike storage room, a computer room, a social service office, laundry facilities and a landscaped terrace. Rental homes are reserved for low-income households earning less than 60 percent of the AMI. Development cost was approximately $84 million, with $46.5 million in funding for the school and program office space and $26.7 million in funding for the housing.

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The completion of Tilden Gardens in Brooklyn, N.Y., was announced Oct. 13. The Office of Minority Health provided a $13.8 million loan. Enterprise syndicated $7.3 million in LIHTCs from New York State Housing Finance Agency and TD Bank provided the tax credit equity. An additional $86,000 was provided by the NYSERDA grant. The six-story supportive housing development provides 60 studio apartments. Forty-five of the rental homes are available for formerly homeless adults with mental health conditions and adults ready to leave psychiatric hospitals. The remaining 15 apartments will be for young adults between 18 and 24 years old who are aging out of the children’s mental health system or foster care. All rental homes are available to residents at or below 60 percent of the AMI. Supportive services are available both on-site and off-site to help residents learn skills and adjust to independent living. The building also includes a medical clinic, a community room, a computer lab and library, a small lounge area on each floor and a backyard area for recreational activities. The Bridge, a nonprofit that specializes in residential properties for the homeless, people suffering with serious mental illness and those with substance abuse disorders, began construction on the property in 2012.

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The grand opening of Willows at Waretown was Oct. 22. The 76-unit affordable rental community for seniors age 55 and older in Township of Ocean, N.J., was constructed by developer, Ingerman, to rebuild the affordable senior housing stock after Super Storm Sandy. The New Jersey Housing and Mortgage Finance Agency (HMFA) awarded the development approximately $6.7 million in Community Development Block Grant (CDBG) Disaster Recovery funds, made available through the Fund for Restoration of Multifamily Housing (FRM). Additionally, HMFA provided approximately $2.4 million in construction and permanent financing, and a construction bridge loan of $6.8 million. HMFA also awarded 4 percent federal LIHTCs. The three-story development includes 70 one-bedroom units, six two-bedroom units, a community room with a kitchen, a lounge area and a social services office. Rental homes are reserved for residents earning 60 percent or less of the AMI. HMFA estimates total development costs to be approximately $17.7 million. The property’s development created more than 168 direct and indirect/induced full-time jobs.

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On Oct. 22, KeyBank announced a $13.8 million investment for the construction of Bascom Village Phase I. KeyBank provided $8 million through LIHTC equity and a $5.8 million construction loan. The 53-unit affordable housing complex in Eugene, Ore., will provide rental homes for individuals earning 50 percent or less of the AMI. Amenities will include a community center, a playground and a community garden. Supportive services will also be included.

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On Oct. 20, the historic Marion Hotel in Ogden, Utah, was officially renamed the Sean Herrick Apartments. The name change is part of the ongoing $3.6 million rehabilitation of the building, which opened in 1911. Remodeling for the old hotel was made possible with $423,283 in annual LIHTCs from the Utah Housing Corporation. Plans for the 86-unit building include a new community room, a game room and air conditioning to replace swamp coolers.

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Kokomo, Ind., Mayor Greg Goodnight, alongside representatives from The Whitsett Group and Company, broke ground Oct. 19 on Apperson Way Apartments. The three-story, 69-unit housing complex will provide housing to local families earning between 30 and 60 percent of the AMI. There will be five townhomes and 64 one, two- and three-bedroom apartments. Construction on the $9.5 million apartment complex was aided with $932,001 in annual LIHTCs and $400,000 in HOME loan funds from the Indiana Housing and Community Development Authority. Plans include redeveloping three city blocks for townhomes, a playground, a community garden and a picnic area.

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The groundbreaking of Flagstone Village in Hammond, Ind., was Oct. 26. The affordable housing development is part of a five-phase plan. Flagstone Village is the fifth and final phase of the new affordable housing at the 40-acre site. Development is being financed with more than $1.2 million in LIHTCs from the Indiana Housing and Community Development Authority (IHCDA), and a $3.63 million mixed-finance loan from the Hammond Housing Authority. There will be 76 one- and two-bedroom rental homes.

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Action-Housing and Autism Housing Development Corporation celebrated the groundbreaking of Heidelberg Apartments on Oct. 15. The new 42-unit affordable housing development in Heidelberg, Pa., will serve residents with autism, physical needs and audio-visual needs. Pennsylvania Housing Finance Agency provided the LIHTCs, which were part of the $20.4 million allocation to 24 affordable, multifamily developments. Additionally, Allegheny County provided $1.5 million to the construction of Heidelberg Apartments. The 50,000-square-foot building will have one- and two-bedroom rental homes. Twenty-one apartments will be reserved for adults on the autism spectrum, six reserved for those with physical disabilities and an additional two rental homes will be adapted for those with audio-visual needs. Amenities will include lounges, community rooms, an exercise room and supportive services. Construction on the $14 million development is expected to be complete June 2016.

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On Oct. 6, the Community Development Trust (CDT), a national community development financial institution (CDFI) that provides capital for the creation and preservation of affordable housing, announced up to $25 million in below-market permanent mortgages to the Strong Families Fund (SFF). The program is intended to reduce capital costs and fund resident services in affordable housing family developments. CDT worked to provide this support in partnership with the Kresge Foundation, the National Affordable Housing Trust (NAHT) and the Great Lakes Capital Fund (GLCF). The first development funded under SFF is a $2 million forward commitment to Deborah Strong Housing, a 112-unit rehabilitated LIHTC family community in Ypsilanti, Mich. The remaining $23 million will be made available to an estimated six or seven additional developments.

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The rededication of Cumberland Gardens in Allentown, Pa., was Oct. 19. The five-year renovation of the affordable housing community was completed in three phases that began in 2010. Phase one renovations were funded by the American Recovery and Reinvestment Act of 2009 and low-income housing tax credits (LIHTCs). The second and third phases were funded with LIHTCs allocated by the Pennsylvania Housing Finance Agency. Renovation costs totaled $45 million, and the project involved rehabilitating 200 units of public housing owned by the Allentown Housing Authority. Units were upgraded to include replacement doors, windows, floors, trim and siding. Some units were adapted to be more accessible for disabled residents.

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On Oct. 20, the historic Marion Hotel in Ogden, Utah, was officially renamed the Sean Herrick Apartments. The name change is part of the ongoing $3.6 million rehabilitation of the building, which opened in 1911. Remodeling for the old hotel was made possible with $423,283 in annual LIHTCs from the Utah Housing Corporation. Plans for the 86-unit building include a new community room, a game room and air conditioning to replace swamp coolers.

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Kokomo, Ind., Mayor Greg Goodnight, alongside representatives from The Whitsett Group and Company, broke ground Oct. 19 on Apperson Way Apartments. The three-story, 69-unit housing complex will provide housing to local families earning between 30 and 60 percent of the AMI. There will be five townhomes and 64 one, two- and three-bedroom apartments. Construction on the $9.5 million apartment complex was aided with $932,001 in annual LIHTCs and $400,000 in HOME loan funds from the Indiana Housing and Community Development Authority. Plans include redeveloping three city blocks for townhomes, a playground, a community garden and a picnic area.

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The groundbreaking of Flagstone Village in Hammond, Ind., was Oct. 26. The affordable housing development is part of a five-phase plan. Flagstone Village is the fifth and final phase of the new affordable housing at the 40-acre site. Development is being financed with more than $1.2 million in LIHTCs from the Indiana Housing and Community Development Authority (IHCDA), and a $3.63 million mixed-finance loan from the Hammond Housing Authority. There will be 76 one- and two-bedroom rental homes.

***

Action-Housing and Autism Housing Development Corporation celebrated the groundbreaking of Heidelberg Apartments on Oct. 15. The new 42-unit affordable housing development in Heidelberg, Pa., will serve residents with autism, physical needs and audio-visual needs. Pennsylvania Housing Finance Agency provided the LIHTCs, which were part of the $20.4 million allocation to 24 affordable, multifamily developments. Additionally, Allegheny County provided $1.5 million to the construction of Heidelberg Apartments. The 50,000-square-foot building will have one- and two-bedroom rental homes. Twenty-one apartments will be reserved for adults on the autism spectrum, six reserved for those with physical disabilities and an additional two rental homes will be adapted for those with audio-visual needs. Amenities will include lounges, community rooms, an exercise room and supportive services. Construction on the $14 million development is expected to be complete June 2016.

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On Oct. 6, the Community Development Trust (CDT), a national community development financial institution (CDFI) that provides capital for the creation and preservation of affordable housing, announced up to $25 million in below-market permanent mortgages to the Strong Families Fund (SFF). The program is intended to reduce capital costs and fund resident services in affordable housing family developments. CDT worked to provide this support in partnership with the Kresge Foundation, the National Affordable Housing Trust (NAHT) and the Great Lakes Capital Fund (GLCF). The first development funded under SFF is a $2 million forward commitment to Deborah Strong Housing, a 112-unit rehabilitated LIHTC family community in Ypsilanti, Mich. The remaining $23 million will be made available to an estimated six or seven additional developments.

***

The rededication of Cumberland Gardens in Allentown, Pa., was Oct. 19. The five-year renovation of the affordable housing community was completed in three phases that began in 2010. Phase one renovations were funded by the American Recovery and Reinvestment Act of 2009 and low-income housing tax credits (LIHTCs). The second and third phases were funded with LIHTCs allocated by the Pennsylvania Housing Finance Agency. Renovation costs totaled $45 million, and the project involved rehabilitating 200 units of public housing owned by the Allentown Housing Authority. Units were upgraded to include replacement doors, windows, floors, trim and siding. Some units were adapted to be more accessible for disabled residents.

 

PEOPLE IN THE INDUSTRY

The National Equity Fund Inc. announced Oct. 5 the hiring of Jason Aldridge as vice president of originations. Aldridge operates out of NEF’s Dallas office, focusing on deals in the southern region of the United States. Before joining NEF, Aldridge was a relationship manager with Wells Fargo Bank. Before that, he was a developer associate with White Rock Commercial LLC, an assistant project manager with St. Joe Company and a project developer at AIG Baker.

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On Oct. 20, MassHousing announced that Thomas R. Gleason, executive director, was re-elected as president of the board for the National Council of State Housing Agencies (NCSHA). Gleason has served as executive director of MassHousing since 2001. Before that, he was vice president and secretary/treasurer of the NCSHA board of directors. He is a member of Fannie Mae’s National Customer Advisory Board and a former member of Fannie Mae’s Affordable Housing Advisory Council. He also serves on the boards of the Massachusetts Housing Investment Corporation, the Community Economic Development Assistance Corporation and is a member of the Mortgage Roundtable of the National Association of Home Builders. In addition, NCSHA appointed Grant S. Whitaker of the Utah Housing Corporation, Ralph M. Perrey of the Tennessee Housing Development Agency and Tia Boatman Patterson of the California Housing Finance Agency as fellow officers.

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The National Equity Fund Inc.’s board of directors announced the addition of two new members Sept. 21: Jane Graf, president and chief executive officer (CEO) of Mercy Housing, a national affordable housing nonprofit, and Patrick J. Nash, managing director at JPMorgan Capital Corporation and head of the direct housing investments group. Graf joined Mercy Housing as president of the California region in 1992. She was named president of the western region in 1999, responsible for the growth of Mercy Housing in California, Washington and Idaho. In 2011, she became Mercy Housing chief operating officer and in 2014 she became president and CEO. Before joining Mercy Housing, Graf founded Specialized Housing Inc. in 1981 and in 1987 she joined Catholic Charities of the Archdiocese of San Francisco as director of housing development. Nash joined the First National Bank of Chicago’s real estate department in 1990 and assumed responsibility for its housing product in 1994. In addition, he was president of Community Investment Corporation, a Chicago-based nonprofit lender. He served on the city of Chicago Department of Housing’s Advisory Committee and from 1979 to 1983 was a member of the Board of Commissioners of the Chicago Housing Authority. He also served as past president of the Affordable Housing Investor’s Council.

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Lancaster Pollard announced the appointment of David Bonomo as senior vice president Oct. 14. He will be responsible for expanding the firm’s investment banking and mortgage banking finance activities for market-rate, income-restricted and subsidized rental properties. Bonomo will manage clients in Connecticut, Delaware, New York, New Jersey and Pennsylvania, and will establish a new office in New Jersey. Before joining Lancaster Pollard, Bonomo served as chief financial officer (CFO) at New Jersey Housing and Mortgage Finance Agency. Before that, he was the founder and managing member of Shore Road Capital LLC, a middle market financial advisory firm. He has also held investment banking positions with Gruntal & Co./Ryan Beck and B.C. Ziegler & Company.