Low-Income Housing Tax Credits News Briefs - February 2014

Saturday, February 1, 2014

AFFORDABLE HOUSING INDUSTRY BRIEFS

On Dec. 19, the Internal Revenue Service (IRS) released a draft audit technique guide (ATG) for the low-income housing tax credit (LIHTC) program. The guide was prepared to assist IRS examiners with auditing taxpayers, usually partnerships, owning IRC §42 low-income housing projects. The eight-part guide presents an overview of the Internal Revenue Code (IRC) §42 credit, four example issues, auditing eligible basis, the remaining factors needed to compute allowable credit, guidelines for computing adjustments to the allowable credit and guidelines for auditing taxpayers who are partners in owning §42 property. The IRS is requesting comments on the draft until end of business on March 28. The draft is available at www.taxcredithousing.com.

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The Office of the Comptroller of the Currency (OCC) announced on Dec. 19 the release of the agencies’ annual Community Reinvestment Act (CRA) asset-size threshold adjustments for small and intermediate institutions. The thresholds were adjusted according to the 1.39 percent consumer price index (CPI) for the period ending in November 2013. Small banks or small savings associations are now institutions that, as of Dec. 31 of either of the prior two calendar years, had assets of less than $1.202 billion. Intermediate small banks or intermediate small savings associations are now institutions with assets of at least $300 million as of Dec. 31 of both of the prior two calendar years, and less than $1.202 billion as of Dec. 31 of either of the prior two calendar years. These asset-size threshold adjustments are effective Jan. 1, 2014.

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The IRS released LIHC Newsletter 54 on Dec. 19. The newsletter discusses income qualifications for LIHTC properties and updates to the HUD Handbook 4250.3. Presented in a Q&A format, the newsletter answers four questions involving form 8823, Chapter 5, Section 3 of the handbook, deferred disability benefits and individual retirement accounts. LIHC Newsletter 54 is available at www.taxcredithousing.com.

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CSH, a nonprofit organization that works to improve and increase supportive housing, on Dec. 19 released a report, “Housing Credit Policies in 2013 that Promote Supportive Housing.” CSH reviewed 56 housing finance agencies’ (HFAs’) 2013 qualified allocation plans (QAP) to see how they addressed supportive housing. The report provides information regarding threshold requirements, credit set-asides and scoring incentives. The report found that more HFAs are requiring or incentivizing coordination with public housing authorities (PHAs) for funding or wait lists, agencies are providing additional incentives to preservation projects in QAPs and more agencies are promoting developments with mixed-use housing. The report can be found at www.taxcredithousing.com.

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STATE BRIEFS

On Dec. 20, New York Governor Andrew M. Cuomo announced $23.7 million in the form of 10 awards to go to affordable housing throughout the state. Funding is available through New York State Home and Community Renewal (HCR), a program that partners with local agencies to improve and preserve homes and communities. Criteria to be met to win the awards included if they advanced one or more of the state’s housing goals and were project-ready, with construction or rehab required to begin within 120 days of the award. Rural preservation, public housing, mixed-income/mixed-use revitalization, housing opportunities, veteran housing and Mitchell-Lama preservation all had developments meet goals in these areas.

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Jolene Kline was named executive director of the North Dakota Housing Finance Agency (NDHFA) on Dec. 30. Kline has been acting executive director since May 2013. She has been with NDHFA since 1985. In 2006, she was selected as the first director of NDHFA’s planning and housing development division, which helps communities address housing shortages and unmet needs.

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Illinois Governor Pat Quinn announced that 5,000 affordable rental homes were financed in 2013. The Illinois Housing Development Authority (IHDA) provided more than $471 million in financing to affordable rental housing. Since Quinn took office in 2009 more than 19,000 units have been financed with $2.2 billion. In addition to the housing units, 3,200 construction and post-construction jobs were created. To qualify for these affordable housing units, residents must make 60 percent or less of the area median income (AMI).

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The Alaska Housing Finance Corporation (AHFC) announced that $33.2 million in 2014 Greater Opportunities for Affordable Living (GOAL) grants and tax credits had been awarded. The Goal program is a combination of federal and state grants and federal tax credits that are given to development sponsors who build or renovate affordable rental and supportive housing for low-income senior families and those with disabilities. The award allowed for the development or upgrade of 179 affordable rental units for seniors. These units are located in five communities in seven different properties, the Dusty Trails in Haines, Inlet Ridge in Ninilchik, Channel Terrace in Juneau, Eklutna Estates II in Anchorage and Ptarmigan Heights in Delta Junction.

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Several affordable housing stakeholders recently expressed concern about the effect that a proposed tax stabilization ordinance could have on affordable housing in Providence, R.I. The ordinance would grant a stabilization tax agreement in lieu of an existing 8 percent tax for affordable housing. Among those concerned is Carol Ventura, director of development at Rhode Island Housing (RIH), who sent a letter on Jan. 2 to Sharon Conrad-Wells, executive of West Elmwood Housing Development Corporation, and Councilman David Salvatore regarding the ordinance. In her letter, Ventura states that the ordinance raises several policy and financial concerns for RIH, including that the ordinance states Sankofa Apartments would be ineligible for 8 percent tax treatment under state law, which could result in retroactive revocation of the tax treatment and gives the city a first lien position. Ventura also stated several concerns regarding the historic tax credit (HTC) and the financial impact the ordinance could have on the financial viability of certain properties. A copy of the letter is available at www.taxcredithousing.com.

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DEALMAKERS

Great Lakes Capital Fund (GLCF) announced on Dec. 23 that they invested $4.8 million to finance the construction of Genesis West Apartments. Located in Grandville, Mich., the property will provide 33 affordable housing units to the homeless and residents with special needs. Supportive services will also be available through Dwelling Place of Grand Rapids Inc., a nonprofit property management company. Nearly 80 jobs will be created through the development of Genesis West Apartments. The contractor, Rockford Construction, will build the development according to LEED Certified Silver Green Buildings standards.

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Centerline Capital Group announced on Dec. 17 that it provided PC Chapel LLC with $6.49 million in financing for the acquisition of Chapel Ridge in Shawnee, Okla. The real estate mortgage service provider arranged a Freddie Mac Targeted Affordable Housing Fixed Rate Capital Markets Execution for the acquisition of the development. The loan has a seven-year term with five-year prepayment with a 30-year amortization period. Chapel Ridge, has 18 two-story garden style and townhouse style apartment buildings with 208 units. Amenities include two swimming pools, a clubhouse, five playgrounds and indoor and outdoor basketball courts.

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PEOPLE IN THE INDUSTRY

Jaymar Joseph was appointed to the position of executive director for the Falls Church Housing Corporation (FCHC), located in Falls Church, Va. Joseph previously worked as principal of the Consortium Development Group. Prior to that, he was a senior development manager for the National Foundation for Affordable Housing Solutions. Joseph received his master’s degree in city planning from the Georgia Institute of Technology.

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Eden Housing appointed Andy Madeira as senior vice president of real estate development. The appointment will begin in February. Madeira, currently a senior banker for JP Morgan Chase Community Development Banking, will be responsible for leading the company’s growth in affordable rental acquisitions, preservation and mixed-income development. Prior to working with JP Morgan Chase Community Development Banking, Madeira was vice president, real estate development for Citizens Housing Corporation and director of real estate development at Bridge Housing Corporation. He earned a juris doctor from Boston University School of Law and a bachelor’s degree in economics from the University of California, Santa Cruz.

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The Kentucky Housing Corporation (KHC) named J. Kathryn Peters as the new executive director. The announcement came in December, a month after Richard L. McQuady retired from the position after 28 years. Peters worked at KHC for 18 years prior to obtaining the position, beginning as resource development manager. She was then named director of The Housing Foundation, a nonprofit subsidiary of KHC. Her responsibilities included overall direction of corporate human resources, homeownership production, rental assistance programs, employee development and training, planning and program development and communications and marketing. Now Peters will be responsible for developing and implementing housing-related products and services, leading the organization toward objectives, and monitoring results of business operations. She earned a master’s degree in public administration from Kentucky State University.

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The Housing Authority of the County of Santa Clara (HACSC) announced on Jan. 6 that Alex Sanchez has been appointed to chair of the California Housing Partnership Corporation (CHPC). Sanchez, who is the executive director of HACSC, was selected by Gov. Edmund G. Brown Jr. The position was confirmed by the state Senate. Sanchez has been with HACSC since 2001. Prior to that, he was director of housing for the City of San Jose and before that, director of housing for the City of Santa Ana and the deputy director of the City of Bell Gardens Redevelopment Agency. Sanchez completed his undergraduate work at Pomona College in Claremont University.

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On Jan. 8, WNC announced the promotion of Anand Kannan to president of Community Preservation Partners LLC (CPP), a subsidiary of the national investor of real estate and community development. Kannan has been with WNC since 2010, serving as vice president of CPP. Prior to that, Kannan was associate director of Vitus Group, a developer of smart affordable housing. Kannan received a bachelor’s degree in economics from the University of California, Berkeley.

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The Federal Home Loan Bank of Seattle appointed Martha McLennan, Steve Grimshaw and Jeff Judd to serve on the bank’s Affordable Housing Advisory Council. The appointments were effective Jan. 1. McLennan is the executive director of Northwest Housing Alternatives, an organization that constructs and preserves affordable housing. She currently serves on the boards for the Oregon Facilities Authority, the Oregon Opportunity Network and the Coalition for a Livable Future. Grimshaw is the owner and manager of Grimshaw Construction and Grimshaw Investments LLC, a developer and manager of affordable housing. Grimshaw is a certified housing credit compliance professional. Judd is executive vice president of real estate for Cook Inlet Housing Authority. Previously, Judd was executive director of Anchorage Mutual Housing Association. McLennan, Grimshaw and Judd will serve three-year terms ending Dec. 31, 2016.

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BOND

MassHousing awarded a combined $17.1 million in tax-exempt bonds in early December to Chapman Arms in Cambridge, and Brighton Allston Apartments LLC, in Allston. Chapman Arms, sponsored by Homeowner’s Rehab Inc., received $11.8 million and will provide 50 studio, one-bedroom and two-bedroom units. Of the 50 units, 25 will be reserved as affordable housing units. Brighton Allston Apartments, sponsored by the Allston Brighton Community Development Corporation received $5.3 million and is located on two sites with a total of 60 units of affordable multifamily rental property.