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Low-Income Housing Tax Credits News Briefs - February 2018

LIHTC Industry

The number of cost-burdened and severely cost-burdened renters has slightly decreased, but the rental housing affordability gap in the United States remains high, according to the Joint Center for Housing Studies (JCHS) at Harvard University’s America’s Rental Housing 2017 report released in December 2017. The study found median monthly rental costs increased 15 percent from 2000 to 2016, while median household income fell slightly. JCHS also reports that the low-income housing tax credit (LIHTC) continues to be a significant force in providing construction and rehabilitation of affordable housing–supporting 70,000 affordable rental apartments per year–but that nearly 500,000 LIHTC units and 650,000 other subsidized rentals will come to the end of their required affordability periods in the next decade. The report says that federal, state and local policy must support the efficient provision of affordable rental homes to address the nation’s affordability challenges.

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The Office of the Comptroller of the Currency (OCC) released Dec. 5, 2017, a list of Community Reinvestment Act (CRA) performance evaluations for November 2017. Of the 29 evaluations released, five rated as outstanding, 23 rated as satisfactory, and one rated as needs to improve. 

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New thresholds for the asset size used to define small bank, small savings association, intermediate small bank and intermediate small savings association under CRA regulations were released Dec. 21, 2017. The required annual adjustment defines small bank or small savings association as an institution with assets of less than $1.252 billion as of Dec. 31, 2017, in either of the previous two calendar years. Intermediate small banks or intermediate small savings associations are institutions with assets of at least $313 million and less than $1.252 billion as of Dec. 31, 2017, for the two previous calendar years. The adjustments were effective Jan. 1.

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The U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) issued Dec. 21, 2017, a notice of solicitations of applications for loan guarantees under the Section 538 Guaranteed Rural Rental Housing program (GRRHP) for fiscal year 2018. The RHS is soliciting competitive lender submissions (responses) regarding proposed projects for the GRRHP. The amount of program dollars available for the GRRHP will be determined by the appropriations act for each fiscal year that the notice is open. Eligible responses will be accepted until Dec. 31, 2021.

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Pennrose Management Company announced Dec. 13, 2017, that the company earned the Accredited Management Organization (AMO) accreditation from the Institute of Real Estate (IREM) management. The AMO accreditation recognizes excellence among real estate management firms. Companies that earn accreditation must demonstrate the highest standards in professional service, financial stability and accountability, and have a certified property manager directing and supervising the real estate management team. IREM is an affiliate of the National Association of Realtors. 

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The Federal Housing Finance Agency (FHFA) released in late December 2017 its 2018 Scorecard for Fannie Mae, Freddie Mac and Common Securitization Solutions. The scorecard includes a new provision directing Fannie Mae and Freddie Mac to research and assess opportunities to further partnerships with housing finance agencies, including examining ways to increase credit availability for affordable multifamily housing. FHFA previously announced that both enterprises’ new multifamily business for 2018 would be capped at $35 billion, down from $36.5 billion in 2017. To encourage Fannie Mae and Freddie Mac to support lending for underserved markets, FHFA will continue to exempt certain loans for affordable multifamily housing from each enterprise’s lending cap. Loans exempt from the cap include those for LIHTC properties and small multifamily properties.

LIHTC State

Connecticut Gov. Dannel P. Malloy, Evonne M. Klein, Department of Housing commissioner, and Karl Kilduff, Connecticut Housing Finance Authority executive director, announced Dec. 22, 2017, more than $31 million in state funding is reserved for the development of affordable housing. The communities of Ellington, Hartford, Manchester, New London, Norwalk, Norwich, Suffield, Trumbull, Wallingford and Westbrook will have the creation, rehabilitation or preservation of nearly 600 apartments for both the rental and homeownership markets. The funding is available through several initiatives, including the Competitive Housing Assistance for Multifamily Properties funding program, the State Sponsored Housing Portfolio funding program and the Affordable Homeownership funding program. 

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Maria Torres-Springer, commissioner of the New York City Department of Housing Preservation and Development, announced Dec. 14, 2017, the allocation of $14.5 million in LIHTCs for nine affordable housing developments. The funding will go toward the creation of six developments and the preservation of three developments with nearly 800 affordable apartments in eight communities in Brooklyn and the Bronx. Awards ranged from $750,000 to $2.6 million.

LIHTC Dealmaker

Pennrose and its partners celebrated the groundbreaking Nov. 29, 2017, of Glenarden Phase I. Redevelopment of the former Glenarden Apartments in Glenarden, Md., will be conducted in four phases, with a mix of homeownership and rental, affordable and market-rate housing. The first phase costs $34 million, with funding including more than $16 million in 9 percent LIHTCs, syndicated by Hudson Housing Capital LLC, with Capital One, NA as investor. Additional funding includes $1.7 million in Partnership Rental Housing funds from the Maryland Department of Housing and Community Development, $1.7 million in infrastructure funds from Prince George’s County, a $14.2 million construction loan from Capital One NA, and a $13.8 million permanent loan via Freddie Mac. Phase I will provide 114 new affordable and market-rate apartment homes for families and seniors and a 5,900-square-foot clubhouse. The development includes townhouse-style buildings with two- and three-bedroom apartments, and a larger four-story senior apartment building with one- and two-bedroom apartments. The senior building boasts a multipurpose room with a kitchen, an outdoor patio, a coffee bar in the lobby, a café/library, an in-house management suite and a fitness room. The 5,900-square-foot clubhouse will eventually serve the entire 430-apartment development and will feature its own multipurpose space, an additional fitness space, separate management suite, a resource center, locker rooms, a kitchenette, an outdoor patio with a grill, a tot lot and pools to be added in the project’s next phase. Later phases will add more affordable senior housing, affordable and market-rate apartments, 97 for-sale townhomes and additional open space.

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Boston Capital announced Dec. 5, 2017, its investment in the construction of Copper Stone Apartments. The affordable housing community for families in Lafayette, Colo., has 260 apartments available to families earning 60 percent of less of the area median income (AMI). Developer Inland Group will finance Copper Stone Apartments with LIHTC equity. Copper Stone Apartments will feature 54 one-, 152 two- and 54 three-bedroom apartments in 11 three-story, garden-style buildings. Amenities will include a community room with kitchen, a computer lounge, an exercise room and a playground. 

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Hunt Capital Partners, in collaboration with Providence Housing Development Corporation, announced Dec. 19, 2017, the financial closing of Durand Senior Apartments in Irondequoit, N.Y. Development involves the demolition of two former church buildings and the construction of two residential buildings. Once completed, there will be 70 new apartments, with 64 LIHTC apartments and six middle-income apartments. There will be 65 one- and five two-bedroom apartments available to seniors 55 or older earning up to 50, 60 and 80 percent of the AMI. Community areas include a kitchen and activity room, with approximately 4,600 square feet of commercial space. Funding included $11.9 million in 9 percent federal LIHTCs and $3.4 million in New York state LIHTCs. Hunt Capital Partners facilitated the investment of both federal and state LIHTC equity by J.P. Morgan Capital Corporation through its proprietary fund, Hunt Capital Partners Tax Credit Fund 16. Groundbreaking for Durand Senior Apartments was scheduled for the first quarter of 2018.  

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The Massachusetts Housing Finance Agency (MassHousing) announced Dec. 21, 2017, the closing of $22.6 million in financing for the nonprofit developer Just-A-Start Corporation (JAS) for the acquisition and renovation of affordable housing in Cambridge, Mass. Just-A-Start is investing $17 million in the comprehensive renovation and modernization of a scattered-site portfolio, which comprises 20 low-rise, midrise and townhouse apartment buildings on 10 sites throughout Cambridge. One-hundred-twelve rental apartments will be affordable to households earning at or below 60 percent of the AMI. There are 17 one-, 40 two-, 45 three- and 10 four-bedroom apartments. MassHousing committed a $10.1 million permanent loan and a $12.5 million bridge loan. Additional funding includes $14.2 million in LIHTC equity provided by the Massachusetts Department of Housing and Community Development, a $3.8 million Just-A-Start seller note, a $5.2 million sponsor loan, $10.1 million in assumed subordinate debt, a $540,000 loan from the Cambridge Redevelopment Authority and a $435,000 deferred developer fee. JPMorgan Chase is providing $22.6 million in construction financing. Development costs are expected to be $45.6 million.

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WNC announced Dec. 18, 2017, the completion of Muldoon Garden in Anchorage, Alaska. WNC provided developer Rural Alaska Community Action Program Inc. with $2.6 million in LIHTC equity for the 23-apartment affordable complex. There will be 17 one- and six two-bedroom apartments. Amenities will include a community room, a playground and a rain garden. The property is available to families earning 60 percent of the AMI. Muldoon Garden is on 19.1 acres.

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Plans were announced in early December 2017 for an affordable apartment complex with a portion of apartments geared toward “grandfamily” households where grandparents and extended family members are raising children. The property in Middleton Wis., will provide 83 apartments, with seven reserved for grandfamilies. Oak Ridge will be a mixed-income independent senior living center. Seventy apartments will be set aside for tenants with incomes between 30 and 60 percent of the AMI. Funding included $8.8 million in LIHTCs from the Wisconsin Housing and Economic Development Authority, as well as well as $665,000 from Dane County. Development costs are expected to be $14 million, with a completion date of Jan. 1, 2019.

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BRIDGE Housing partnered with Holland Partner Group to announce Jan. 4 that they were selected to develop a mixed-income, mixed-use property in San Diego. Two-hundred-fifty-three apartments and nearly 9,000 square feet of retail space will be developed. BRIDGE Housing will develop an eight-story building with 57 affordable apartments for low-income seniors earning 30 to 60 percent of the AMI. Holland Partner Group will develop 196 market-rate apartments in an adjacent 29-story tower. 

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Dougherty Mortgage LLC announced Jan. 5 the closing of a $5.3 million Fannie Mae mortgage-backed securities as tax-exempt bond collateral loan for the acquisition and rehabilitation of Bridgeway Apartments and Park Acres Apartments & Townhomes. The properties in Robbinsdale, Minn., and New Hope, Minn., will provide 86 multifamily apartments. Dougherty will work on improvements to the properties, including exterior, interior and individual apartment upgrades. All apartments are available to individuals and families earning 60 percent or less of the AMI. Sources of funding include LIHTC equity, HOME funds and tax-exempt bonds from the Minnesota Housing Finance Agency and AHIF and Community Development Block Grant Funds from Hennepin County.  

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Aegon Asset Management announced the closing of a $100 million affordable housing debt fund Jan. 2. Aegon USA Realty Advisors LLC, a member company of Aegon Asset Management, sponsored the fund and will also provide ongoing fund oversight, loan servicing and asset management services for the life of the fund. This debt fund is expected to comprise investments in 32 loans located in 13 states across the country. Six investors took part in the closing, including an affiliate of the fund sponsor. 

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New York Gov. Andrew M. Cuomo announced Dec. 19, 2017, WinnCompanies’ completion of Cedars of Chili Apartments in Chili, N.Y. The 18-month, $56.6 million acquisition and rehabilitation of 320 apartments included upgrades to kitchens and bathrooms, and replacement of heating and cooling systems, roofs, windows and wood patios. Upgrades were also made to the resident lounge, laundry room, management office and playgrounds, and incorporated a new fitness room, basketball court and community room. The property provides 96 one-, 158 two-, 49 three- and 17 four-bedroom apartments. Of those, five one-, 10 two, one three- and one four-bedroom apartments are handicap-accessible. There is 116,620 square feet of residential space. A majority of the apartments will be reserved for households earning at or below 60 percent of the AMI. New York State Homes and Community Renewal provided tax-exempt bonds and LIHTCs. Bank of America Merrill Lynch provided $27.9 million in debt financing and a $13.9 million equity investment. The Rochester Housing Authority worked with  the Department of Housing and Urban Development (HUD) to navigate HUD’s Rental Assistance Demonstration (RAD) program and the property conversion. 

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Whittier Falls Housing, part of Dover Housing Authority in New Hampshire, began renovation work Jan. 5 on 184 family apartments. The property was renovated under HUD’s RAD program, with funding provided in the form of tax-exempt bonds from the New Hampshire Housing Finance Authority. Construction costs are expected to total $10 million, with work estimate to be complete within two years.

LIHTC People

The New Jersey Housing and Mortgage Finance Agency (NJHMFA) released a newsletter Dec. 22, 2017, announcing the appointment of Claudia Lovas as activing executive director. Lovas replaced Anthony L. Marchetta, outgoing executive director, who retired at the end of December. She was appointed by the NJHMFA board of directors at the board’s Dec. 14, 2017, meeting. Lovas joined the agency in 1986 and served as deputy executive director and chief of programs since 2012. Throughout her tenure at NJHMFA, she has been involved in policy development including strategic planning, finance and operations. The board also named John Murray as acting deputy executive director. Murray, who served as chief financial officer, has been with the Agency since 2002. Both appointments were effective Jan. 2.

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RED Mortgage Capital LLC, the Mortgage banking arm of comprehensive capital provider RED Capital Group LLC, announced Dec. 12, 2017, the hiring of Trent Brooks as president and national head of production. Before joining RED, Brooks was a co-founder of Sierra Capital Partners and GlenBrook Capital Advisors. Most recently, he was executive vice president, director, Western Region at Bellwether Enterprise Real Estate Capital LLC. 

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Regions First Sterling announced Dec. 13, 2017, the addition of Andrew Romero as vice president, relationship manager. He is part of Regions First Sterling’s originations group and will be based in Denver. Romero will focus on sourcing and originating affordable housing transactions in the Western region of the United States. Previously, Romero was a principal at AERO Affordable Housing Solutions and before that, he was a vice president and relationship manager in the community development banking group.

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Dominium announced Dec. 13, 2017, the hiring of several new employees at its Plymouth, Minn. headquarters. Dave Patel was brought on as a senior corporate analyst. In his new role, Patel is responsible for budgeting, metrics, bond portfolio management and the supervision of analysts. Before joining Dominium, Patel was a senior financial analyst at UnitedHealthcare. Chris Durand was hired as facility systems specialist and in his new role, Durand is responsible for assisting properties with repair, replacement, preventative maintenance programs and recommendations in regard to building systems. Before joining Dominium, Durand was the chief maintenance engineer for Hilton Hotels. Jake Hannan was hired as portfolio analyst, where he will be responsible for portfolio analysis, financial statement review, market analysis and cash flow projections. Before joining Dominium, Hannan was an intern at Draper and Kramer. Tara Williams was brought on as senior financial reporting accountant. In Williams’ new role, she is primarily responsible for cash flow consolidation reporting, making book and oversight of refinances and sales. Before joining Dominium, Williams was an associate accountant at BKD. Lydia Reardon was hired as a corporate analyst, where she is responsible for budgets, trusts, ownership distributions and refinances. Previously, Reardon was a billing analyst for OneNeck IT Solutions. Austin Peterson was hired as a corporate analyst. In his new role, Peterson is responsible for personal finances, real estate owned debt tracking and lender sponsor review. Before joining Dominium, Peterson was an intern with The Opus Group. 

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The National Council of State Housing Agencies (NCSHA) board of directors named Garth B. Rieman interim executive director. Rieman’s role was effective Jan. 1. Rieman has worked at NCSHA for nearly 25 years, most recently as the director of housing advocacy and strategic initiatives. In that role, he helped NCSHA formulate and execute its policies on the LIHTC, tax-exempt bonds, housing finance reform and federal appropriations, among other affordable housing issues. Before the NCSHA, Rieman worked for the U.S. Senate Housing Subcommittee, National Association of Realtors, U.S. Department of Housing and Urban Development and U.S. Office of Management and Budget. Rieman steps in for former executive director Barbara J. Thompson, who stepped down Dec. 31, 2017, after 30 years with NCSHA, serving the past 16 years as executive director. The board of directors approved Rieman’s appointment Dec. 4, 2017, during a meeting in Washington, D.C. 

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MassHousing’s board of directors voted Jan. 9 to appoint Chrystal Kornegay as the agency’s executive director. Kornegay served the Baker-Polito Administration as undersecretary of housing and community development. She will assume the executive director role following a brief transition period. Kornegay succeeds Tom Lyons, MassHousing’s managing director of government affairs and communications, who was serving as acting executive director. Before joining the Baker-Polito Administration, Kornegay served as president and chief executive officer of the community development corporation Urban Edge. Kornegay began her community development career as a project manager for The Community Builders.

LIHTC Bond

The Woda Group Inc., held a ribbon-cutting ceremony Dec. 8, 2017, for the opening of Wheatland Crossing in Columbus, Ohio. Wheatland Crossing is a three-story building with 42 one- and two-bedroom apartments. Development costs were $8.6 million for the affordable senior housing community. Wheatland Crossing is available to residents ages 55 and older who earn 60 percent or less AMI. The Ohio Housing Finance Agency provided federal low-income housing tax credits (LIHTCs) and private activity bonds, as well as $1 million in Ohio Housing Trust funds. In addition, the city of Columbus contributed a Housing Preservation Bond grant and Homes on the Hill–Community Development Corporation (HOTH-CDC) is coordinating supportive services. The Ohio Capital Corporation for Housing (OCCH) invested approximately $4.1 million in LIHTC equity and Key Bank provided $4.6 million in construction financing.

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Love Funding announced Jan. 4 the closing of a $15.9 million loan for the acquisition and rehabilitation of Ivy Tower. The affordable apartment community in Newport News, Va., is a 12-story high-rise with 92 one- and 48 two-bedroom apartments. All 140 apartments will be restricted to those earning less than 60 percent of the AMI. Financing for acquisition and rehabilitation was secured through HUD’s 221(d)(4) loan insurance program. R4 Capital provided LIHTC equity.

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Fort Schuyler Housing Development Company and partners announced Jan. 3 the closing of a development deal for an affordable senior housing development in the Bronx, N.Y. The renovation and refinancing of Fort Schuyler House was made possible with financing including a combination of tax-exempt bonds and LIHTCs. During construction, short-term and long-term bonds totaling approximately $21.9 million will also fund the rehabilitation. Renovations will total $15.5 million and will include upgrades such as new flooring and finishes, new security and energy efficiency measures, a newly renovated auditorium, new tenant lounge and extensive landscaping improvements. The eight-story building with 138 apartments is available to seniors 62 and older.

Journal Category:

Low-Income Housing Tax Credits

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