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Low-Income Housing Tax Credits News Briefs – January 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

In response to the wreckage caused by Hurricane Sandy, the Local Initiatives Support Corporation (LISC) set up the LISC Emergency Relief Fund to target the needs of low-income neighborhoods in disaster situations. The LISC Emergency Relief Fund’s two main objectives are to connect disaster victims to government agencies and other emergency resources and to provide for emergency housing repairs. More information is available at www.lisc.org.

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The Bankruptcy Appellate Panel (BAP) for the Sixth Circuit Federal Court of Appeals issued a ruling involving five Kentucky limited partnerships (the debtors) that were placed in a jointly-administered Chapter 11 case. Creekside Senior Apartments LP et al. developed five separate properties using low-income housing tax credits (LIHTCs) and when they filed for bankruptcy, they complained against the bankruptcy court’s inclusion of remaining LIHTCs when appraising their bank’s secured interest in their properties. In the recent ruling, BAP held that the remaining value of the LIHTCs should be included in the appraisal and that the bank had a preferred security interest in the properties which could not be separated from the delivery and valuation of the tax credits. Read the ruling at www.uscourts.gov.

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Deutsche Bank and Enterprise Community Partners Inc. announced the launch of their Lowering the Cost of Housing Competition, which will award up to $250,000 in program related investment to the winning proposal. Deutsche Bank Americas Foundation will provide an additional $50,000 in grant funds for proposals that show innovation in lowering costs or furthering the best research in this area. The competition encourages participation from multidisciplinary teams composed of architects, developers and policy professionals. Proposals are due by Jan. 15, 2013. Proposed projects will need to be completed on or before December 2014.

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Centerline Capital Group announced on Nov. 9 that it has been formally designated a licensed Freddie Mac multifamily targeted affordable housing (TAH) seller/servicer. The license will allow Centerline to originate affordable multifamily loans on behalf of Freddie Mac for preservation transactions, bond credit enhancements, forward commitments and cash mortgages. Centerline began its association with Freddie Mac in 2007 when it became the first lender in the nation to be fully designated in Freddie Mac’s lender risk sharing program.

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The National Low Income Housing Coalition (NLIHC), an advocacy group for affordable housing, created the National Housing Preservation Database in partnership with the Public and Affordable Housing Research Corporation. The database integrates data from HUD and U.S. Department of Agriculture (USDA) into one proper-level database. It includes nine federally subsidized programs and does not include state or local subsidies. Information available on the database includes contract expiration dates, loan maturity dates, recent physical inspection scores, number of units, type of owner and other property or subsidy characteristics. Information can be found by city, county, congressional district, metropolitan area or for the entire state. The site features a research tool, which has detailed information on federally assisted properties, and a preservation tool, which allows users to extract data according to specific requirements. The database will be updated tri-annually in March, August and December, and can be found at www.preservationdatabase.org.

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The adoption of green building measures in state qualified allocation plans (QAPs) has grown steadily each year, according to a recent study by Global Green USA. The annual report grades each state on a 50-point scale comprised of 32 subtopics related to smart growth, energy efficiency, resource conservation and health protection. The average score for 2012 was 31, a 20 percent increase from 2010’s average of 26. The report found that 47 percent of housing credit funds nationwide went to states that achieved an A minus score or better in Global Green’s 2012 ranking and 72 percent of states that received a B minus score or better. Based on interviews with state agencies, the report included the following recommendations to agencies and policymakers: update Internal Revenue Service (IRS) Section 42 to require the inclusion of health criteria and water conservation in QAPs, establish defined tools to measure sustainability, standardize the assessment process and energy performance expectations for property rehabilitations, require energy monitoring and reporting, establish standards for quantifying green building health benefits and require independent verification of green building measures. Download the report from Global Green.

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A recent report from New York University’s Furman Center found that tenants of LIHTC properties have better access to high performing schools, or ones with test scores above the state median, than tenants of federal public housing or those who hold use project- or tenant-based Section 8 vouchers. According to “Do Federally Assisted Households Have Access to High Performing Public Schools?,” one-third of LIHTC tenants live near high performing schools, compared with 19 percent of public housing tenants, 25 percent of project-based Section 8 tenants and 26 percent of voucher holders. The average percentage of traditional rental households living near quality schools is 38 percent. The report concluded that although voucher holders can theoretically move to neighborhoods with higher performing schools, they generally do not. Download the report at www.furmancenter.org.

DEALMAKERS

Boston Capital announced its investment in the rehabilitation of two multifamily senior communities in Virginia: the 48-unit Amherst Village Apartments in Amherst and the 43-unit Meadow Run Apartments in Gordonsville. Amherst Village and Meadow Run will be rehabilitated using low-income housing tax credit (LIHTC) equity. General partners are affiliated with T.M. Associates Inc. in Maryland and Telamon Corporation in North Carolina. Both properties will feature one-bedroom, one-bath units in five buildings. Units will feature patios, ceiling fans and new EnergyStar appliances such as ranges, refrigerators and dishwashers. The community buildings of Amherst and Meadow Run will each be expanded to feature a leasing office, common laundry and community room with kitchen or kitchenette. Units for both properties will be available to seniors ages 55 and older earning 50 percent or less of the Area Median Income (AMI).

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The Dr. Magnus Hirschfeld Fund (dmhFund) and Pennrose Properties broke ground Nov. 9 on the John C. Anderson Apartments in Philadelphia, an LGBT-friendly, low-income housing property for seniors. Among those in attendance at the groundbreaking were Philadelphia Mayor Michael A. Nutter, former Gov. Ed Rendell and Rep. Bob Brady, D-Pa. The building’s namesake was a Philadelphia City Council member from 1979 until his death in 1983 who played an important role in passing Philadelphia’s civil rights bill for sexual minority individuals. The $19.5 million development received funding from LIHTC equity, a HOME grant and Pennsylvania Redevelopment Assistance Capital Program funds. Located in the area known as The Gayborhood in Washington Square West, the six-story residence will have 56 one-bedroom units. Designated as an Energy Star 3.0 building, John C. Anderson Apartments will have a vegetated green roof and solar thermal hot water system. There will also be raised gardening beds in an enclosed 5,000 square-foot courtyard for residents to use. The project is expected to be completed by the end of 2013.

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Boston Capital is providing equity and permanent loan financing for the rehabilitation of Walworth Apartments in Wisconsin. Walworth Apartments is a 139-unit LIHTC property consisting of two sites that are nine miles apart, Gilbert Court Apartments in Elkhorn and Havenwood Apartments in Geneva. Gilbert Court offers 48 one-bedroom units in a split-level building with an elevator. Havenwood Apartments features 71 one-bedroom, 12 two-bedroom and eight three-bedroom units in seven buildings. Gilbert Court and Havenwood Apartments units will have new appliances, kitchen cabinets, countertops, bath vanities, lavatories, windows and flooring. The property features new roofs, siding, windows, doors and mechanical systems. Both sites will also offer a fitness center, computer room, community room, picnic area, storage lockers and library. Units will serve seniors and families earning 60 percent or less of the AMI and construction is expected to generate $5 million in local income and nearly 60 local jobs.

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Prestige Senior Living Center in Heber City, Utah held a grand opening in November. Developed by the Wasatch County Housing Authority and Mountainlands Community Housing Trust, the property was constructed for residents 62 years or older with incomes between 25 and 49 percent of the AMI. The property’s 21 units come equipped with a washer and dryer, dishwasher, garbage disposal and central air conditioning. There is also a community game room available for residents. The Olene Walker Housing Loan Fund granted a $380,000 low-interest construction and permanent loan through the State of Utah and Mountainlands Association of Governments helped purchase land through a $150,000 Community Development Block Grant. WNC provided $2.3 million in LIHTC equity.

STATE BRIEFS

Because of the effect of Hurricane Sandy, the New York State Homes & Community Renewal (HCR) is extending its deadline for Unified Funding Applications from Nov. 29, 2012 to Jan. 8, 2013. HCR staff will continue to be available for application assistance. More information is available at HCR.

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The New Hampshire Housing Finance Authority approved LIHTC funding for six affordable housing developments, totaling 180 units. The developments are Notre Dame Senior Housing in Berlin, Woodbury Mill in Dover, Gile Hill apartments in Hanover, Marlborough Senior Housing in Marlborough, Pine Valley Mill in Milford and Harriman Hill in Wolfeboro. Developer Tri-County CAP will convert an abandoned, historic school into Notre Dame Senior Housing with 33 units and long-term support services. The Portsmouth Housing Partnership will use federal historic tax credits to convert an 1885 shoe factory mill into the 42-unit Woodbury Mill. Twin Pines Housing will begin a new phase of construction on Gile Hill Apartments to build 15 two-bedroom apartments, 13 of which will cater to residents earning 60 percent or less of the AMI. Southwestern Community Services will sponsor the renovation of a school building into the 24-unit Marlborough Senior Housing. Southwestern Community Services will also provide supportive services to the housing residents. Dakota Partner will sponsor the redevelopment of an 1870 mill building into the 50-unit Pine Valley Mill apartments and a 25,000 square-foot commercial center. The Laconia Area Community Land Trust will work on the second phase of Harriman Hill to add 24 units of workforce housing to the Lakes Region community.

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The Wisconsin Housing and Economic Development Authority (WHEDA) released answers to frequently asked questions regarding its 2013 LIHTC program. It includes information on WHEDA’s Boost Policy, which allows an applicant to use any whole number from 0 percent to 30 percent boost to make a project financially feasible, although a higher boost request can negatively affect credit usage scoring. The document clarifies that primary developers are limited to two awards, not two applications. Developers may receive a third award as a co-developer. More information is available at www.wheda.com.

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The Virginia Housing Development Authority will implement a modified cost containment structure for its 2013 allocations. Applications from the inner Northern Virginia area will be separated into new construction/adaptive reuse or acquisition/rehabilitation categories. The new construction limit is $315,000 and an adjustment of up to $35,000 for underground or structured parking. The limit for acquisition/rehabilitation is $275,000. The limits are largely based on the findings of a statewide cost study performed by Novogradac & Company. The balance of the state will use HUD 221 (d)(3) loan limits and an adjustment of a 15 percent increase.

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The Nebraska Investment Finance Authority (NIFA) released the final version of its 2013 qualified allocation plan (QAP). NIFA will use an online application for the first time to process all LIHTC and HOME funding requests and for its Collaborative Resources Allocation for Nebraska (CRANE) program. NIFA’s LIHTC program will hold two rounds. Round One’s threshold review date is Feb. 4, full applications are due March 18 and LIHTC reservations will tentatively be issued April 19. Round Two’s threshold review is May 6, full applications are due June 3 and LIHTC reservations will tentatively be issued June 21.

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The South Carolina State Housing Finance and Development Authority has published its final 2013 QAP and tax credit manual. Applications will be available January 2013 and will be due March 8. A QAP and application workshop is scheduled for January and final reservations will be made in July. Access the QAP and manual at www.taxcredithousing.com.

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The Texas Department of Housing and Community Affairs (TDHCA) released a draft of its 2013 multifamily uniform application. The application will be used for the following programs: LIHTC, tax-exempt bonds, HOME Investment Partnership and Neighborhood Stabilization. Access the application draft at www.taxcredithousing.com.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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