Low-Income Housing Tax Credits News Briefs - December 2018

Monday, December 3, 2018

LIHTC Industry

The U.S. Department of Housing and Urban Development released Oct. 19 the list of difficult development areas (DDAs) and qualified census tracts (QCTs) for 2019 for the low-income housing tax credit (LIHTC). DDAs and QCTs are eligible for as much as a 30 percent basis boost while receiving the LIHTC. The DDAs and QCTs are effective for allocations of LIHTCs beginning Jan. 1, 2019, and for bond-financed properties where the bonds are issued and the building is placed in service after Jan. 1, 2019. The list is available at www.taxcredithousing.com.

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Rep. Jimmy Panetta, D-Calif., introduced Oct. 16 the Farmworker Housing Improvement Act of 2018, legislation that would reform the United States Department of Agriculture’s Section 514 and Section 516 farmworker housing programs to better align them with the LIHTC program. H.R. 7071 would also increase the maximum amount of a loan or grant under Section 514 or Section 516 to $3 million and require an annual schedule for notice of funding, applications and awards for Section 514 and Section 516 funding. The bill is available at www.taxcredithousing.com.

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The National Low Income Housing Coalition and the Public Assisted Housing Research Corporation released a report Oct. 17, “Balancing Priorities: Preservation and Neighborhood Opportunity in the Low-Income Housing Tax Credit Program Beyond Year 30.” The report, based on data from the National Housing Preservation Database and other sources, explores challenges in preserving LIHTC properties and promoting mobility for low-income families. The report highlights the number of LIHTC properties that are nearing the end of the mandatory compliance period and the risk of them exiting affordability restrictions.

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The National Council of State Housing Agencies (NCSHA) recognized 15 state housing finance agencies (HFAs) for innovative programs Oct. 15 during the association’s 2018 Annual Conference & Showplace in Austin, Texas. The NCSHA Annual Awards for Program Excellence identify and elevate industry best practices and encourage continued HFA innovation in seven categories: communications, homeownership, legislative advocacy, management innovation, rental housing, special achievement and special needs housing. Forty HFAs submitted 131 entries in the 2018 awards program. The complete list of winners is available at www.ncsha.org.

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The ACTION Campaign released updated fact sheets Oct. 8. The fact sheets show the LIHTC program’s impact in each state and the documents include data through 2016. New to the state fact sheets is data demonstrating the impact that a 50 percent increase in LIHTC allocation authority would have in each state. The Cantwell-Hatch Affordable Housing Credit Improvement Act (S. 548), includes a 50 percent increase in allocation authority. Novogradac & 
Company estimates that a 50 percent expansion of the LIHTC would allow more than 264,200 additional affordable homes to be built nationally over the next 10 years. The data on the state fact sheets come from the National Council of State Housing Agencies’ 2016 Factbook, with economic impact multipliers from the National Association of Home Builders. Data on cost-burdened renters is from the 2016 American Community Survey. The fact sheets also include data from the National Low Income Housing Coalition’s 2016 Out of Reach report. 

LIHTC State

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) issued Oct. 23 Developer Bulletin 2018-3: Inclusionary Policy. The notice to developers clarifies and refines NJHMFA’s policy with respect to the financing of inclusionary developments seeking low-income housing tax credits (LIHTCs). Such items include description and documentation of financial ties or subsidies between the affordable and market rate components; description and value of subsidy requests; information on market conditions to support anticipated revenue levels; pro forma for the market rate component of the development; pro forma for the affordable component of the development, with the same information as for the market-rate component of the development; and a feasibility analysis conducted by an independent third party skilled in market and financial analysis.

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The Colorado Housing and Finance Authority (CHFA) announced Sept. 20 the second round of 2018 LIHTC awards. CHFA awarded $17.1 million in 9 percent federal LIHTC to 15 developments. The awards will support the new construction of 814 affordable rental apartments throughout Colorado. Cities include Denver, Fort Collins, Grand Junction, Lakewood and Pueblo. In this second round, 33 applications were submitted, requesting $35.9 million LIHTCs. The complete list of cities and awards is available at www.taxcredithousing.com.

LIHTC Dealmaker 

RBC Capital Markets Tax Credit Equity Group announced Oct. 5 the closing of its RBC Tax Credit Equity California Fund-4. The fund has $53.5 million in LIHTC equity. This is RBCCM-TCEG’s second of three multi-investor fund closings for 2018, with $397 million in tax credit equity raised from 17 institutional investors. The Fund will invest in five LIHTC-eligible multifamily and senior apartment communities representing 472 affordable apartments in California. The properties will be located in Delano, Gilroy, Los Angeles, Oxnard and Simi Valley.

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Hunt Capital Partners, in partnership with the Vancouver Housing Authority (VHA) and Columbia Non-Profit Housing (CNPH), announced Oct. 18 the closing of $4.2 million in LIHTC equity for the new construction of Rhododendron Place. Located in Vancouver, Wash., the affordable property will offer 30 apartments, 23 of which will be set aside for those who qualify as homeless. All apartments will be restricted to those with behavioral health disorders and mental disabilities. Construction on Rhododendron Place is already underway, with an expected completion date of December 2019. Development costs will be $7.8 million. Hunt facilitated the investment of the LIHTC equity through its multi-investor fund, Hunt Capital Partners Tax Credit Fund 27. In addition, CNPH provided a $2.1 million construction to permanent loan and VHA provided a $1.2 million construction to permanent loan. 

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Aegon Real Assets US (Aegon RA) announced Oct. 15 the closing of its 10th multi-investor LIHTC fund. The $135 million national LIHTC fund sponsored by Aegon RA, a member company of Aegon Asset Management, is expected to comprise investments in 22 partnerships with properties in 12 states across the United States.

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RBC Capital Markets Tax Credit Equity Group announced the Oct. 11 closing of RBC Tax Credit Equity National Fund-28 LP. The fund has $185 million in LIHTC equity. Fund 28 is to include 18 developments with 2,394 apartments. 

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Hunt Capital Partners announced Oct. 9 the investment in Utah Paiute Tribal Housing Authority’s first LIHTC transaction. The closing of $1.4 million in LIHTC and federal solar tax credit equity will allow for the acquisition and rehabilitation of 17 single-family homes by the Utah Paiute Tribal Housing Authority (UPTHA) in Cedar City, Utah. The homes will be renovated and leased to households earning up to 25, 45, and 50 percent of the area median income (AMI). Once rehabilitated, the development will provide two-, three-, four- and five-bedroom single-family homes. Construction cost will be $2.7 million. Hunt Capital Partners facilitated the investment of federal tax credit and solar tax credit equity through its multi-investor fund, Hunt Capital Partners Tax Credit Fund 27. UPTHA provided a $1.4 million soft construction to permanent loan.

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Freddie Mac closed its first LIHTC fund Oct. 4 after being out of the market for years. Freddie Mac closed the fund with Enterprise Community Investment, providing $8.2 million in LIHTC equity for the development of Wintergreen West in Summit County, Colo. Wintergreen West, which will provide 40 apartment homes, is part of Village at Wintergreen, a 196-apartment community. Apartments will be one to three bedrooms and be available to residents earning between 30 percent and 60 percent of the AMI.

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Hunt Capital Partners, in collaboration with Pennrose, announced Oct. 30 the closing of $13 million in federal and state LIHTC equity for the for the new construction of Warner Robins Phase I in Warner Robins, Ga. The affordable housing development will provide 90 apartments, 59 of which will be set aside for households earning up to 50 percent and 60 percent of the AMI. The remaining 31 apartments will be market rate. To serve local veterans, the Warner Robins Phase I development will partner with the Georgia Veterans Education Career Transition Resource Center to lease five apartments. The property will offer both a fitness and wellness center, as well as a community room. Development costs for Warner Robins Phase I will be $15.5 million. Hunt Capital Partners facilitated the investment through Hunt Capital Partners Tax Credit Fund 30 and Fund 18.

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WinnResidential announced Oct. 1 that it assumed management of the entire Corporation for Better Housing’s (CBH) portfolio of 70 multifamily properties Oct. 3. Those 70 properties, located throughout California, include 4,313 apartments. The addition of the CBH communities brings the active WinnResidential portfolio in California to 156 properties with more than 13,200 apartments. 

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The groundbreaking for Oyster Bay Gardens in Bethpage, N.Y., was Oct. 2. The affordable housing property will provide 48 apartments in a three-story building complex and will provide 36 homes for low- and moderate-income seniors, as well as 12 homes for adults with intellectual and developmental disabilities. Funding for the $18.9 million development includes $9.5 million in tax-exempt bonds from the state Homes and Community Renewal’s Housing Finance Agency. Construction is expected to take approximately 18 months to complete, with the property set for occupancy in spring 2020. 

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The grand opening of Century Sunrise in Johnson City, N.Y., was Oct. 22. The property was home to the former Endicott-Johnson shoe factory. The $33 million mixed-use property will house 105 apartments and 9,000 square feet of commercial space. There will also be a playground, laundry faculties and recreation area. The ground floor will be used by Binghamton Brewing Company, which plans to open a microbrewery and restaurant in the space. Apartments are available to individuals and families on varying income levels, and some apartments are reserved for individuals with intellectual and developmental disabilities. Financing included tax-exempt bonds and LIHTCs from New York State Homes and Community Renewal.

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Thanks to a $14 million LIHTC allocation from the Illinois Housing Authority issued in October, the originally planned $16 million expansion of Naperville Elderly Homes in Naperville, Ill., will now be $28 million. Expansion and renovations on the 121 apartments will include water, electricity and air efficiency upgrades, as well as adding new flooring, bathrooms, ceilings, air conditioners and refrigerators to studio and one-bedroom apartments. Renovated or added spaces will include a computer lab, an exercise room and multimedia room. Apartments will be available to residents 62 and older. Construction is scheduled for completion by summer 2020.

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The Colorado Housing and Finance Authority recently approved $1.3 million in LIHTCs in October for Senior Residences at Three Springs in Durango, Colo. Developer Volunteers of America will provide 53 affordable senior apartments to residents 62 and older. There will be 49 one- and four two-bedroom apartments available to residents earning between 30 and 60 percent AMI. There will also be community spaces for events. Construction is expected to start in 2019 and tentatively set for completion in fall 2020.

LIHTC People

CHN Housing Partners announced Sept. 28 that Kevin J. Nowak was named CHN’s next executive director. Nowak serves as CHN’s director of strategic initiatives and general counsel. Before that, he was the treasurer of the executive committee. Before joining CHN, Nowak was the national equity investment manager of Key Community Development Corporation, a wholly owned subsidiary of KeyBank. He began his career as an associate of Thompson Hine LLP. Nowak steps in after Rob Curry’s announcement that he will step down in June 2019.

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Red Mortgage Capital LLC, the mortgage-banking arm of RED Capital Group LLC, announced Oct. 15 the hiring of Patrick McAllister as the director of multifamily originations of its new San Francisco office. McAllister most recently serving as executive vice president for Jones Lange LaSalle. He has served as a director at several San Francisco-based CRE lending firms, including Prudential Mortgage Capital and Wells Fargo Multifamily Capital.

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Enterprise Community Investment announced Oct. 25 the appointment of Scott Hoekman as president and chief executive officer of Enterprise Housing Credit Investments, the newly named low-income housing tax credit business of Enterprise. Hoekman has been at Enterprise for more than 24 years, starting his career as an underwriter. From there, he’s moved on to hold several key positions, including managing an acquisitions team and most recently serving as senior vice president and chief credit officer.

LIHTC Bond

Dougherty Mortgage announced Oct. 10 the recent closing of a Fannie Mae M.TEB loan for the acquisition and rehabilitation financing of Village Green. The affordable housing property in Fridley, Minn., will undergo interior upgrades, mechanical replacements and common area improvements. One hundred three of the 196 apartments will be age-restricted. All apartments will be available to residents earning no more than 60 percent of the area median income. In addition to the Fannie Mae M.TEB, financing included a HOME loan provided by Anoka County, as well as tax-exempt bonds underwritten by Dougherty & Company LLC, an affiliate of Dougherty Mortgage. The loan used 4 percent low-income housing tax credits.