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Low-Income Housing Tax Credits News Briefs - February 2016

INDUSTRY BRIEFS

The Joint Center for Housing Studies of Harvard University (JCHS) released the report, “America’s Rental Housing: Expanding Options for Diverse and Growing Demand,” Dec. 9. The report is a biennial report that summarizes recent data of rental housing trends. JCHS found that tight rental markets present a challenge of affordability in a time of rising overall demand. The organization advocates for sound policies and programs that address the needs of lower-income renters and communities and to focus on expanding the range of renal housing options. Data indicated that by mid-2015, 43 million families and individuals lived in rental housing, which is a 9 million increase from 2005. In addition, the share of all U.S. households that rent rose from 31 percent to 37 percent, which JCHS states is the highest level since the mid-1960s. The full report is available at www.taxcredithousing.com.

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The Internal Revenue Service (IRS) Dec. 16 invited public comment on Form 8586 regarding the low-income housing tax credit (LIHTC). Form 8586 is used by taxpayers to calculate the tax credit and by the IRS to verify that the proper credit has been claimed. No changes are being made to the form, but the IRS is seeking comments on the efficiency of information collection. Comments are due by Feb. 16.

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On Dec. 9, Cinnaire announced the award of more than $2.6 million in grants from the Federal Home Loan Bank of Chicago (FHLBC) Affordable Housing program (AHP). The grants will allow Cinnaire to aid in the acquisition, rehabilitation, new construction and adaptive reuse of more than 200 units. These units will be made available to low-income, disabled and historically homeless residents in Michigan, Wisconsin and Illinois. Cinnaire Lending will provide $272,000 of AHP subsidy to Inner City Christian Federation (ICCF) in Grand Rapids, Mich., for the acquisition and new construction of 20 units of rental housing. Cinnaire Lending will provide $675,000 of AHP subsidy to Buckeye Community Hope Foundation in Tinley Park, Ill., for the acquisition and new construction of 47 units of rental housing. Cinnaire Lending will provide $850,000 of AHP subsidy to Lutheran Social Services of Wisconsin and Upper Michigan Inc., in Milwaukee, for the acquisition and adaptive reuse of an existing building into 72 units of rental housing. Cinnaire Lending will provide $850,000 of AHP subsidy to Lutheran Social Services of Wisconsin and Upper Michigan Inc., in Racine, Wis., for the acquisition and rehabilitation of 74 units of rental housing.

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On Dec. 8, CBRE Group Inc., a provider of advisory, investment sales, debt, structured finance and research services to owners of affordable housing, announced the acquisition of Tax Credit Group (TCG). Chris Ludeman, global president, capital markets of CBRE said in an article in Business Wire that the acquisition of TCG adds new capability to capital markets offering affordable housing services and improves the ability to meet the full spectrum of real estate investor needs. Tax Credit Group will now be called CBRE Affordable Housing.

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The January 2016 issue of the Novogradac Journal of Tax Credits included incorrect information in the matrix found in, “Important Aspects of the 2016 Difficult Development Areas and Qualified Census Tracts.” The updated version is available at www.novoco.com/journal. We regret the error.

STATE

The Office of Inspector General (OIG), Department of the Treasury, published Dec. 31, “Domestic Assistance Recovery Act: Audit of Mississippi Home Corporation’s Payment Under 1602 Program,” dated Nov. 10. As part of OIG’s ongoing oversight of the Department of the Treasury’s payments to states for low-income housing projects in lieu of low-income housing credits for 2009, OIG conducted audits of awards made to selected state housing credit agencies. OIG found that the Mississippi Home Corporation (MHC) complied with the Treasury’s 1602 Program terms and conditions which capture the eligibility and compliance requirements set forth in both Section 42 of the Internal Revenue Code (IRC) and Section 1602 of the Recovery Act. That is, MHC met the applicable requirements for receiving its $29,664,458 1602 Program award as well as requirements for sub-awarding those funds to 17 eligible low-income housing projects. The audit report was number OIG-16-007.

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The California Debt Limit Allocation Committee (CDLAC) released the 2016 CDLAC compliance reporting requirements Dec. 30. All certifications will now be processed through the On-Line Compliance Reporting System. The new system will also provide each issuer with a list of developments for which they are responsible and will allow all responses to be answered and submitted electronically. The issuer self-certification and the sponsor certificate of compliance were also to streamline the compliance reporting process. CDLAC stated that no paper certifications will be accepted in 2016. The system was implemented Feb. 1.

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On Nov. 30, the New Hampshire Housing Finance Authority (NHHFA) announced the low-income housing tax credit (LIHTC) reservations for 2016. NHHFA reserved $31 million in LIHTCs to six developers for the construction or preservation of 268 affordable rental homes. Chandler Place in Plaistow will provide 25 senior apartments once constructed. The Meadows at Grapevine Run in Hampton Falls will offer 24 one-bedroom apartments for seniors. Franklin Mill in Franklin will be rehabilitated and will provide 45 family apartments. Renaissance RENEW in Manchester will rehabilitate nearly 100 affordable rental homes. Kensington Lane in Bedford will be a 41-unit family property. Bradley Commons in Dover will replace a former church with a four-story mixed use building. The ground floor will have commercial space and the upper floors will be family housing. The list of awards is available at www.taxcredithousing.com.

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On Dec. 3, the Washington State Department of Commerce announced the award of $47.5 million in loans and grants from the state Housing Trust Fund, and $2.6 million from the federal HOME program for the construction of 36 affordable housing developments in 26 counties throughout the state. A total of 1,249 affordable rental homes will be constructed and made available to low-income individuals, people with chronic mental illnesses, homeless families with children, individuals with disabilities, veterans, homeless youth, farmworkers, seniors and first time homebuyers.

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New York Gov. Andrew Cuomo announced the award Dec. 8 of nearly $11.3 million for the construction of three affordable housing developments across New York. The funding was provided by the New York State Homes and Community Renewal (HCR). The three properties will provide a combined total of 133 units for low- to moderate-income households. Heritage Homes Phase 3 in Westchester County will provide 41 units for low-income families. HCR will invest $2.2 million from the New York State Low-Income Housing Trust Fund program and $8.7 million in LIHTCs. The $17.9 million plan is the third and final phase of the redevelopment. Hancock Street Redevelopment in Ithaca, Tompkins County will be a nearly $20 million mixed-income, mixed-use revitalization development that will provide 59 new affordable units. There will also be a program available designed to provide nutrition, wellness and parenting classes to low-income families. HCR provided $2.6 million from its Middle Income Housing program, $1 million from the Community Investment Fund, as well as $5 million in state LIHTCs and $10 million in federal LIHTCs. Crerand Commons Phase two in Monroe County is a $9.6 million planned development of six townhouse apartment buildings with 33 rental units that will be affordable to families. HCR provided $2.4 million from the New York State Low-Income Housing Trust Fund and $6.9 million in federal LIHTCs. These combined awards are part of the $200 million Unified Funding Round that Gov. Cuomo announced in July 2015.

DEALMAKERS

WNC, a national investor in real estate and community development initiatives, announced the completion of Homesteads in Ampersand in Plattsburgh, N.Y., Dec. 15. WNC provided $7.1 million in low-income housing tax credit (LIHTC) equity for the construction of the 64-unit affordable housing community. Homesteads on Ampersand is an eco-friendly community with four, two-story buildings consisting of 24 one-bedroom, 20 two-bedroom and 20 three-bedroom rental homes. There is also a community building. In addition, Homesteads on Ampersand offers residents onsite management, a laundry facility, a library and a computer center.

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Enterprise Community Investment Inc. announced a $7.8 million LIHTC investment Dec. 3 for the second phase of The Lodges at Naylor Mill. Enterprise made the investment through its new Enterprise Housing Partners 26 Fund. Phase two will create an additional 45 homes for low-income seniors. Phase two will provide 36 one-bedroom and nine two-bedroom apartments, seven of which will be set aside for seniors with disabilities. Amenities will include a community room, computer room and exercise and laundry facilities. In addition, a resident services coordinator from the nonprofit Maintaining Active Citizens will provide recreation activities, transportation, health screenings and other services that promote independent, healthy living. Construction is expected to be completed in October. The first phase of the development opened in 2007.

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Louis Barrett Residence Limited Partnership, an affiliate of Silver Street Development Corporation, announced Dec. 17 the acquisition of Louis Barrett Residence located in Lynn, Mass. The two-level, midrise building will undergo renovations. MassHousing is providing $15.6 million for the improvements. Louis Barrett Residence was built in in 1973 and provides 145 apartments to seniors and disabled residents. Of the 145 rental homes, 27 are studios and the remaing 118 are one-bedroom apartments, with eight apartments being made accessible for handicapped residents through renovations. Property improvements will include the repair and repointing of masonry exteriors, replacement of the entrance canopy, replacement of the existing roof membrane, resurfacing of parking areas and walkways, new building utility doors, new windows and interior apartment doors and kitchen and bathroom upgrades. All 145 apartments will remain affordable for at least 30 years and are protected by a federal Section 8 Housing Assistance Payment contract.

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Bellwether Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced Dec. 14 the closing of a $10.9 million Fannie Mae Delegated Underwriting and Servicing (DUS) loan for the refinancing of Skyline Terrace Apartments. In Monterey, Calif., Skyline Terrace Apartments is a multifamily property with 40 two-bedroom townhouse-loft rental homes. The transaction was designed to retire the existing bridge debt that allowed for the acquisition of Skyline Terrace Apartments in December 2014.
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On Dec. 14, the Community Development Trust (CDT), a real estate investment trust that provides capital for the preservation and creation of affordable housing, and Peak Capital Partners, an owner and manager of conventional, affordable and student apartment assets, announced their joint acquisition of Parkland Village Apartments in Forestville, Md. CDT and Peak Capital Partners invested $3.2 million for immediate repairs and capital reserves. Parkland Village Apartments provides 159 units of affordable rental housing in 12 two- and three-story buildings with a mix of one- and two-bedroom garden-type apartments. Rental homes will be available to lower-income families with household income at or below 60 percent of the area median income (AMI). 

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Middletown, Conn., officials celebrated the near-completion of Old Middletown High School Apartments Dec. 9. The two-year, $6.2 million renovation of the former high school was funded with the help of $4.2 million in 4 percent LIHTC equity, $2.6 million in tax-exempt bond financing and $3 million in bridge financing. The Connecticut Housing Finance Authority also provided a construction/permanent loan. Owner Preservation of Affordable Housing (POAH) provided extensive exterior and interior upgrades to the 65-unit building. Among the improvements include new windows and roof, kitchen and bath upgrades to all rental homes, the construction of six apartments compliant with Americans With Disabilities Act standards, modernized elevators and new flooring and lighting in common areas. The Old Middletown High School Apartments provides affordable housing to seniors and disabled residents with incomes below 60 percent of the AMI. The building is listed on the National Register of Historic Places.

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RBC Capital Markets announced Dec. 9 the closing of RBC Tax Credit Equity National Fund 22. The $161.3 million fund had eight institutional investors. Fund 22 will provide investments in 19 LIHTC apartment communities throughout the United States, with 13 multifamily properties and six properties for seniors. The 19 properties provide a combined 1,520 units.

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Steele Properties announced Dec. 29 the acquisition and preservation of Burlington Manor in Burlington, Colo., and Georgetown Square in Georgetown, Texas. Large-scale renovations at each property are scheduled to begin in early 2016. Burlington Manor is a 54-unit Section 8 community available to low-income families. The Colorado Housing and Finance Authority (CHFA) awarded $4.2 million in 9 percent LIHTCs over a 10-year period. In addition, PNC originated a $1.7 million Fannie Mae permanent loan. Steele Properties will make interior upgrades including updated kitchens and bathrooms, installation of air conditioning units as well as add new amenities including a playground and a building expansion to include a community center, a fitness facility and a computer lab. Georgetown Square is a 55-unit Section 8 family community. The Texas Department of Housing and Community Affairs (TDHCA) provided $4.7 million in 9 percent LIHTCs. PNC also originated a $3.5 million Fannie Mae permanent loan and the city of Georgetown provided a $450,000 loan. Renovations will include interior and exterior upgrades including updated kitchens and bathrooms, LED lighting and a new playground area. A covered pavilion with grills and picnic tables will also be added to the property, as well as a new community building with a computer lab. Combined development costs are expected to total $14 million.

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On Dec. 3, U.S Bank announced the investment of $8.3 million in LIHTC equity for the construction of St. Michael’s Veterans Center Phase II in Kansas City, Mo. St. Michael’s Veterans Center Phase II will provide homeless or disabled veterans with affordable housing and support services. There will be 59 one- and two-bedroom apartments, with space for substance abuse counseling, job training and other support services. Development will include a 7,000-square-foot service center that will serve residents and area veterans. St. Michael’s Phase I opened July 1, 2014. Construction for the second phase is expected to be complete by the third quarter of 2016 and development costs are expected to total $11.4 million.

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Stratford Capital Group announced Dec. 28 the closing of Stratford Fund XVII Limited Partnership (Fund XVII), a $110 million LIHTC investment fund. Fund XVII consists of eight family and six senior affordable rental apartment properties located in nine states. Fund XVII includes seven institutional investors for the 14 properties, which will provide more than 1,600 affordable apartment units.

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MaineHousing announced the award of $29 million in LIHTCs Dec. 2 to five affordable housing properties for homeless veterans, seniors and families. Financing will go toward the construction or rehabilitation of 221 affordable rental homes. The 30 family rental homes of the Huse School Apartments in Bath will be renovated, with 28 apartments constructed. Of those units, 13 will be affordable and 15 will be market-rate apartments MaineHousing provided $6.4 million in LIHTCs over a 10-year period. Cabin in the Woods in Chelsea will provide 21 newly constructed rental homes for homeless veterans. MaineHousing provided $3.8 million in LIHTCs. The 20 existing units of Blackstone Apartments in Falmouth will be rehabilitated, with an additional 19 apartments built for seniors. MaineHousing provided $3 million in LIHTCs. Carleton Street Apartments in Portland will provide 37 new family rental homes. MaineHousing provided $5.8 million in LIHTCs. The existing three-story building of St. Ignatius Apartments in Sanford will be rehabilitated, with another 66 elderly housing apartments to be constructed. MaineHousing provided $9.3 million in LIHTCs. A total of 16 applications were submitted requesting $89 million in LIHTCs. 

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The Missouri Housing Development Commission approved $625,000 in federal LIHTCs and $625,000 in state LIHTCs over a 10-year period for Adams Grove on Dec. 4. The affordable housing development in St. Louis will offer 50 townhomes and garden apartments. There will be 26 three-bedroom affordable housing units. There will also be four one-bedroom apartments, 16 two-bedroom apartments and four four-bedroom apartments. The start of construction is scheduled for fall, with an anticipated completion rate of 12 to 14 months. Costs for the development are expected to reach $11.5 million.

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Boston Financial Investment Management (Boston Financial) announced Dec. 9 the closing of Boston Financial Institutional Tax Credits XLIV, Limited Partnership (ITC 44), a $102 million LIHTC fund. ITC 44 comprises 12 tax credit properties with 1,954 units. The 12 properties–eight family developments and four senior communities–are in California, Florida, Massachusetts, New York, Tennessee and Virginia. Six institutional investors participated in ITC 44, which will create 2,359 temporary and 592 permanent jobs.

PEOPLE IN THE INDUSTRY

The Woda Group Inc. announced Dec. 3 the appointment of Morgan Mahaffey as director of accounting, development, and the promotion of James Zambori to director of accounting, management. Mahaffrey will be responsible for development accounting of the organization, all of its development owners and all affiliates. Before joining the development company, Mahaffrey was a tax manager with Clark Shaeffer & Hackett. Before that, he was controller for Strategic Mortgage Company. Mahaffey’s appointment was effective Nov. 30, 2015. Zambori will be responsible for all day-to-day accounting and annual reporting for the management division, Woda Management & Real Estate. Zambori started with the company in 1997. He has held several positions, including financial reporting controller, senior property accountant, compliance accounting manager and most recently, director of development reporting. Before joining The Woda Group, Zambori was the senior accountant with McManis & Associates Inc.

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WNC, a national investor in real estate and community development initiatives, announced Nov. 23 that Kelly Henderson rejoined the firm as senior vice president of originations, Northeast region. She was previously with WNC from 2006 to early 2015, as senior vice president in acquisitions. In her new role, Henderson is responsible for property acquisitions and closings in the Northeast, including the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont, as well as Washington, D.C. Before joining WNC originally, Henderson was vice president, director of acquisitions for a national tax credit syndication firm. She is a licensed attorney.

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On Jan. 4, BRIDGE Housing, a nonprofit developer, owner and manager of affordable housing, announced the election of Joe Hagan to the board of directors of BRIDGE Housing. Hagan is president and chief executive officer of the National Equity Fund. Before joining National Equity Fund, Hagan was president of the Affordable Housing Tax Credit Coalition. He remains on the board as president emeritus. Hagan also was president of Banc One Community Development Corporation, and before that, he was founder and president of the Ohio Capital Corporation for Housing. Before that, he was the director of multifamily housing at the Ohio Housing Finance Agency. Hagan was honored by Fannie Mae with the Syndicator CEO of the Year Award in 2004, presented with the Lifetime Achievement Award from the Affordable Housing Investors Council in 2009 and he was inducted into the Affordable Housing Hall of Fame in November 2013.

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BOND

Red Stone Tax-Exempt Funding LLC announced Dec. 3 the closing of $16 million in tax-exempt bonds for the construction of Port Royal Apartments in Baton Rouge, La. The transaction closed under Red Stone’s direct bond purchase program. The Louisiana Housing Corporation also contributed $1.5 million of debt capital through the HOME Investment Partnership program. Stratford Capital Group provided an additional $10.6 million in 4 percent federal LIHTC Equity. The 192-unit affordable rental housing development will provide a swimming pool, a playground, a community center with full kitchen, a business center and a fitness center. Construction is scheduled to be complete by mid-2017.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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