Low-Income Housing Tax Credits News Briefs - December 2017

Friday, December 1, 2017

LIHTC Industry

The Internal Revenue Service (IRS) published Oct. 19 the 2018 caps for low-income housing tax credits (LIHTCs) and bonds. Revenue Procedure 2017-58 provides the 2018 inflation-adjusted amounts for the LIHTC and private activity bond (PAB) caps. The state LIHTC ceiling in 2018 will be the greater of $2.40 multiplied by the state population or $2,765,000, which is an increase of $55,000 over this year’s cap. The multiplier had been $2.35 in 2017. The state ceiling for the PAB volume cap will be the greater of $105 times the state population or $311,375,000. That is an increase of $6.06 million over the 2017 figure. 

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The Move America Act (H.R. 3912) was introduced in the House of Representatives Oct. 2. The bill would expand PABs and infrastructure tax credits to give state and local governments billions of dollars to fund infrastructure projects. The bill, whose companion was introduced in the Senate in May (S. 1229), would create Move America Bonds, which would be allocated to states based on population. It would also create Move America Tax Credits to leverage private investment by enabling smaller states to trade in some or all of their bond allocation for tax credits at a 25 percent rate. The Joint Committee on Taxation says the bill would leverage $8 billion in federal investments into $226 billion in bond authority over 10 years–or up to $56 billion in tax credits over the same 10 years. The bill is sponsored by Reps. Jackie Walorski, R-Ind., Brian Fitzpatrick, R-Pa., Earl Blumenauer, D-Ore., and Sean Patrick Maloney, D-N.Y. Both bills are available at www.novoco.com.

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The National Housing Conference (NHC) released Sept. 28 the 2017 edition of its Paycheck to Paycheck report on the housing affordability challenges of workers in several occupations across 203 metropolitan areas. The 2017 edition focused on the affordability challenges faced by medical professionals and found that workers in five fast-growing health care occupations struggle to find and maintain affordable housing near their places of work. The report discusses several policy solutions, including improvements to the LIHTC proposed in the Affordable Housing Credit Improvement Act of 2017 (S. 548), introduced by sponsored by Sen. Maria Cantwell, D-Wash., and Sen. Orrin Hatch, R-Utah. NHC also updated its Paycheck to Paycheck database.

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Rep. Suzan DelBene, D-Wash., Oct. 31 introduced the Access to Affordable Housing Act, according to a press release from her office. The bill would increase the federal LIHTC allocation by 50 percent. Reps. Adam Smith, D-Wash., and Pramila Jayapal, D-Wash., are cosponsors of the legislation. DelBene, a member of the tax-writing House Ways and Means Committee, is also a cosponsor of the Affordable Housing Credit Improvement Act.

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The Office of the Comptroller of the Currency Nov. 1 released a list of Community Reinvestment Act performance evaluations that became public during October. Of 18, two were outstanding and 16 were satisfactory. The list includes national banks, federal savings associations and insured federal branches of foreign banks that have received ratings.

LIHTC State

The Internal Revenue Service (IRS) announced Oct. 13 that those affected by California wildfires will have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments. The announcement includes an additional filing extension for taxpayers with valid extensions that ran out Oct. 16. The IRS is providing relief to seven California counties: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. The IRS may provide relief to other affected locations in the future.

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California Gov. Jerry Brown signed AB 1193 Oct. 13, extending the property tax exemption to over-income tenants who earn up to 140 percent of the area median income. California AB 1193 will be in effect through the 2027-28 fiscal year.

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Minnesota Housing announced Oct. 19 an investment of more than $126 million for the creation and preservation of 1,823 affordable rental apartments throughout the state. Property types include single-family and multifamily developments. The investments in 60 developments support more than 3,400 jobs and are expected to leverage additional private and local resources, resulting in nearly $350 million in total development costs. 

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The Nebraska Investment Finance Authority announced the deadlines for the first round for of LIHTC applications. The threshold deadline is Nov. 20, and the final deadline is Jan. 8, 2018. When the application is available, it can be viewed at www.taxcredithousing.com.

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The Louisiana Housing Corporation board of directors awarded more than $11 million in LIHTCs for the construction and rehabilitation of 21 affordable housing developments throughout the state. A total of 1,080 affordable apartments in 15 parishes will be created or preserved. In addition, 1,318 jobs will be created within the first year and development will produce $158 million in private investments.

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On Oct. 11, the Illinois Housing Development Authority (IHDA) awarded more than $22.5 million in federal LIHTCs to 20 affordable housing developments in 12 counties. The LIHTCs will support the new construction or preservation of 1,442 affordable apartments for low- to moderate-income families, seniors and individuals with special needs. IHDA expects development to support 2,000 full-time construction jobs and nearly 550 permanent jobs once completed. Properties will be located in Altamont, Arlington Heights, Arcola, Bloomington, Cary, Champaign, Chicago, Des Plaines, Franklin Park, Forest Park, Greenfield, Joliet, Mendota, Northlake, Paris, Roodhouse, South Elgin, Urbana, Virginia.

LIHTC Dealmaker

MassHousing (Massachusetts Housing Finance Agency) announced Oct. 11 the closing of $22.5 million in financing for the purchase, rehabilitation and preservation of affordability of Stratton Hill Park in Worcester, Mass. The property, acquired from Beacon Communities LLC, provides 156 apartments. There are 18 studio apartments, 82 one-, 45 two- and 11 three-bedroom apartments in two midrise buildings and two townhouse buildings. Of the 156 apartments, 16 will be for households earning at or below 30 percent of the area median income (AMI), 62 will be for households earning at or below 60 percent AMI, 50 will be for working households with incomes between 61 percent and 80 percent of the AMI and 28 will be rented at market rate. MassHousing provided a $9.8 million construction and permanent loan, a $10.2 million equity bridge loan and $2.5 million from MassHousing’s $100 million Workforce Housing Initiative. Funding also included approximately $3.5 million in financing from the Maryland Department of Housing and Community Development, $1.2 million from the Affordable Housing Trust Fund and approximately $15.1 from an allocation of state and federal LIHTC. Beacon Communities LLC estimates $9.7 million in property renovations. 

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The Woda Group announced Oct. 16 redevelopment plans for 43 Town Square in Lima, Ohio. The 12-story building will be converted into mixed-income housing and commercial office space. 43 Town Square will offer 47 new apartments with two one-, 38 two- and seven three-bedroom apartments. Of those, 10 will be available at market rate and 37 will be affordable for singles, families, students and seniors. There will also be 9,000 square feet of commercial space on the first floor. The $16.7 million development is financed with federal historic tax credits (HTCs), state HTCs allocated by the Ohio Development Services Agency and State Historic Preservation Office, LIHTCs allocated by the Ohio Housing Finance Agency (OHFA), a HOME grant from the city of Lima, a 12-year tax abatement for 50 percent improved value, a $1.5 million bridge loan from OHFA and a $1.7 million permanent loan from RiverHills Bank. CREA LLC, is investing in the LIHTCs and federal HTCs. Redevelopment is expected to be complete early 2019. The 1926 building and former First National Bank & Trust is listed on the National Register of Historic Places. 

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Candeur Group announced Oct. 23 that its community development financial institution CDAH Fund LLC closed on $12 million in financing. CDAH Fund LLC has more than $115 million in assets.

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Boston Capital announced Oct. 3 its investment in four affordable multifamily properties in Virginia. One hundred ninety-eight affordable homes will be built. The general partner is Flatiron Partners LLC and the developments will be renovated with tax credit equity from the LIHTC program. Brookshire Apartments features eight two-story, walk-up residential buildings with 16 one- and 48 two-bedroom garden-style apartments. Renovations will include a new 1,080-square-foot community building with a community room. Rooms will be available to residents earning at or below 60 percent of the AMI. Harmony Village Apartments features four two-story buildings with 12 one- and 30 two-bedroom garden-style apartments. Amenities will include a playground, a common laundry facility and a new community building with a community room and kitchenette. Apartments will be available to families with incomes at or below 60 percent AMI. Lakewood Apartments has four two-story buildings containing 20 one- and 32 two-bedroom garden-style apartments. Renovations will include the installation of a 1,080 square-foot-community building featuring a community room and kitchenette, as well as a playground and common laundry facility. Apartments will be available to families with incomes at or below 60 percent AMI. Milnwood Village Apartments has 10 quadplex buildings featuring 40 one-bedroom garden-style apartments. Community amenities will include on-site management, a common laundry facility, a community room with kitchenette and a picnic area. The property will be available to seniors 55 and older with incomes at or below 60 percent of AMI. 

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St. Joseph Community Land Trust, in partnership with Pacific Development Group, announced in early October the renovation of Sierra Garden Apartments in Lake Tahoe, Calif. Renovations are financed with $15 million in 4 percent LIHTCs. Renovations to the 76 affordable apartments include improvements to kitchens, bathrooms, floor coverings, fresh paint, new wall heaters and LED lighting fixtures. Eight apartments will become 100-percent ADA accessible. Construction is expected to be complete in 2018.

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The groundbreaking of new affordable housing complex Carlisle Townhomes in Carlisle, Pa., was Oct 2. PIRHL plans to construct 40 townhomes, 12 flat apartments, a 2,000-square-foot community building and a 2-acre park on the former site of Carlisle Tire & Wheel. An additional planned phase will add veteran housing and commercial space. The apartments will be reserved for families with household incomes below 60 percent of the AMI. Funding for construction includes $11 million in LIHTCs from the Pennsylvania Housing Finance Agency, a $550,000 loan from the Redevelopment Authority an $8 million construction loan and a $1.7 million permanent loan from JP Morgan Chase. Construction is expected to be complete by fall 2018.

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Red Stone Equity Partners LLC announced Oct. 5 the closing of Red Stone Equity–2017 National Fund LP. The 2017 Fund is a $188-million multi-investor LIHTC investment fund. The proceeds will be used to finance the construction and/or rehabilitation of more than 1,800 affordable apartments in 25 properties in 12 different states. The 2017 fund is the largest Red Stone Equity multi-investor fund. 

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TD Bank announced Oct. 10 its $12 million LIHTC investment in the redevelopment of Witherspoon Senior Apartments in Philadelphia. TD Bank also provided a $9.1 million construction loan for the conversion of a former nursing home into more than 65,000 square feet of new affordable housing for seniors. The remodeled two-story building will include 60 one-bedroom apartments. Of those, six apartments will be reserved for seniors with physical immobility, three for seniors with sensory impairment and 10 apartments for homeless seniors, including veterans. Apartments will be available to residents earning less than 60 percent of the AMI. In addition, the building will include community space for resident services and recreation, as well as common spaces for reading, computer and game rooms. There will also be a health and wellness suite, which will provide a space for doctor’s visits, a salon, a pharmacy and a commissary. Witherspoon Senior Apartments is expected to be complete in fall 2018.

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Boston Capital announced Nov. 1 its investment in the construction of Vista Rose II Apartments in Wasilla, Alaska. The 36 apartments in the multifamily development will be available to seniors 55 and older earning 60 percent or less of the AMI. Vista Rose II Apartments will be built with LIHTC equity and will include 18 one- and 18 two-bedroom apartments in a two-story building. Amenities will include a two-story community center featuring an exercise area, laundry facilities, computers with internet access and a community room. 

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RBC Capital Markets announced Oct. 25 the closing of the RBC Tax Credit Equity National Fund-26, with $146 million in tax credit equity. There were nine investors in the fund, which will comprise investments in 16 LIHTC eligible multifamily and senior apartment communities. This represents 1,349 affordable apartments in 10 states. Those states are Arizona, California, Connecticut, Georgia, Maryland, Massachusetts, Minnesota, New York, South Carolina and Texas.

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Plymouth Housing Group celebrated the grand opening of Seattle’s Plymouth on First Hill Oct. 20. The affordable housing property will provide 77 apartments for people experiencing homelessness, as well as on-site medical clinic for those dealing with mental and physical health challenges. The supportive housing complex received $7.7 million in city funds and Plymouth Housing Group also raised $11 million in LIHTC equity. 

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A groundbreaking ceremony for The Renaissance was held Oct. 10. The $20 million development in Asbury Park, N.J. will have 64 affordable apartments in three buildings thanks to $7.3 million in LIHTC equity. The New Jersey Housing and Mortgage Finance Agency also provided $2.5 million in construction financing and $8.8 million in disaster recovery funds. The Monmouth County HOME fund donated approximately $500,000. Apartments are available to residents earning no more than 60 percent of the AMI. The Renaissance is scheduled to open in April 2019. 

LIHTC People

Hunt Mortgage Group announced Oct. 9 that Suzanne Cope rejoined the firm’s affordable housing/Federal Housing Administration (FHA) group as senior vice president. Cope will focus on originating and closing affordable and FHA multifamily loans nationwide, with a primary focus on the Colorado area. Before returning to Hunt Mortgage Group, Cope was a senior vice president in the affordable multifamily division of Bellwether Enterprise. In her earlier role at Hunt Mortgage Group, she was responsible for West Coast originations of all debt financing activities for affordable multifamily housing. Earlier in her career, she was a senior account manager with Fannie Mae. In 2014, Cope was named one of Real Estate Forum’s “2014 Women of Influence” that honors women whose achievements have shaped the commercial real estate industry. She will be based in Denver.

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Anne Mavity started her new role as executive director of Minnesota Housing Partnership (MHP) Sept. 28. She replaces MHP founder and executive director Chip Halbach. In her new role, Mavity lead MHP in policy/advocacy, research/communications and capacity building. Mavity brings 30 years of experience in affordable housing, capacity building and development. She has worked on a congressional subcommittee on housing and provided technical assistance and underwriting at the Corporation for Supportive Housing. Most recently she was director of new projects at Beacon Interfaith Housing Collaborative 

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The BRIDGE Housing board of directors announced Ed McNamara’s nomination to the board Sept. 27. McNamara, a real estate developer in Portland, Ore., has more than 45 years of experience in construction and in private sector and nonprofit development. McNamara worked as a building contractor for more than a decade before joining a startup community-based nonprofit REACH Community Development Inc. in 1983. He was named its executive director two years later. He joined Prendergast and Associates, and in 2002, McNamara founded Turtle Island Development LLC. He has chaired Portland’s Housing Advisory Committee as well as the Oregon Environmental Council, and served on the executive committee of 1000 Friends of Oregon.

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The National Low Income Housing Coalition (NLIHC) announced Oct. 10 the honorees of its 2018 housing leadership award. The honorees are U.S. Sen. Susan Collins, R-Maine; Lisa Hasegawa, former executive director of the National Coalition for Asian and Pacific American Community Development and NLIHC board member; and Matthew Desmond, PhD, MacArthur Genius Awardee and Pulitzer Prize-winning author of “Evicted: Poverty and Profit in the American City.” Sen. Collins will receive the 2018 Edward W. Brooke Housing Leadership Award for her years of leadership in Congress, unwavering commitment to addressing the needs of the lowest-income people in the U.S. and steadfast support for federal affordable housing and homelessness programs. Hasegawa will receive the 2018 Cushing Niles Dolbeare Lifetime Service Award for her years of dedication to affordable housing on behalf of the Asian-American and Pacific Islander community. Dr. Desmond will receive the Sheila Crowley Housing Justice Award in 2018 for his groundbreaking work to elevate the need for affordable housing for the lowest-income people in America. The winners will be recognized at the NLIHC’s annual Leadership Awards Reception in Washington, D.C., March 20, 2018. 

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The National Affordable Housing Trust (NAHT) announced Oct. 30 Lori Little as the new chief executive officer. Little joined NAHT in 2002, working in syndication roles and leading the originations and syndication teams. Before working with NAHT, she served as vice president of operations for JPMorgan Chase. She also held positions at Associates Financial Services of North America and Blalack & Williams LLP. Little will replace Jim Bowman.