Sign Up For Novogradac Industry Alert Emails

Low-Income Housing Tax Credits News Briefs - January 2014

AFFORDABLE HOUSING INDUSTRY BRIEFS

On Nov. 15, the U.S. Department of Housing and Urban Development (HUD) designated difficult development areas (DDAs) for 2014. Qualified census tracts (QCTs) published on April 20, 2012 remain in effect. The notice also announced a change in the designation methodology for metropolitan DDAs that will be applied beginning with the 2016 designations. The revised methodology will use small area fair market rents (SAFMRs) rather than metropolitan-area fair market rents (FMRs). The notice can be viewed at www.taxcredithousing.com.

***

On Dec. 3, HUD released a memo announcing the Obama Administration’s expansion of the Better Buildings Challenge to include multifamily properties. Launched in February 2011, the energy efficiency program’s goal is to increase energy efficiency in buildings by at least 20 percent by 2020. HUD and the U.S. Department of Energy (DOE) are partnering with owners of market-rate multifamily housing, public housing authorities, LIHTC property owners and HUD-assisted multifamily property owners to reach the program’s goal. For more information, download the Dec. 10 Tax Credit Tuesday podcast from www.novoco.com/podcast.

***

On Nov. 12, the National Low Income Housing Coalition released a report on veteran housing entitled, “Housing Instability Among Our Nation’s Veterans.” The report includes data from the 2011 American Community Survey (ACS) and analyzes the characteristics and housing needs of veterans compared to those of non-veterans. The report revealed that seven in 10 veteran households with incomes at or below 30 percent of the area median income (AMI) were severely burdened by housing costs nationwide. It also detailed housing expenses, stating that 1.5 million veteran households in 2011 spent more than 50 percent of their income on housing. The report also found that veterans who were women, racial minorities or had disabilities and who served after Sep. 11, 2001, had the greatest need for affordable housing.

***

The Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (OCC) on Nov. 15, released final revisions to “Interagency Questions and Answers Regarding Community Reinvestment.” Five questions were updated, with two new questions added that address community development activities, investments, lending and state and regional impact. The document provides guidance for use by personnel, financial institutions and the public. The document is available at www.taxcredithousing.com.

***

On Dec. 5, the OCC released an international review of OCC supervision of large and midsize institutions. Prepared by a team of international regulators and led by Jonathan Fiechter, a former OCC senior deputy comptroller, the report provided recommendations that cover six general areas. These are mission, vision and strategic goals, risk identification, ratings systems, staffing, the scope and consistency of supervisory strategies and enterprise governance.

STATE BRIEFS

On Nov. 14, Massachusetts Gov. Deval Patrick signed An Act Financing the Production and Preservation of Housing for the Low and Moderate Income Residents (H 3492). The bill will provide $1.4 billion to 11 capital funding programs over five years. These programs rehabilitate, produce and modernize state-owned public housing developments, preserve the affordability and the income mix of state-assisted multifamily developments and support homeownership and rental housing opportunities for low- and moderate-income citizens. They also preserve housing for the elderly, the homeless and low- and moderate-income citizens and promote economic reinvestment through funding of infrastructure improvements.

***

California S.B. 341, Chapter 796, Statutes of 2013, was signed into law on Oct. 13 and requires housing successor agencies (cities, counties and housing authorities that have taken over housing functions for former redevelopment agencies) to follow new expenditure and accounting rules as of Jan. 1. The bill states that all other funds in the Housing Asset Fund must be used to develop, acquire, rehabilitate or preserve lower income housing (affordable to households earning 80 percent of AMI or less). At least 30 percent of the funds must be spent on extremely low income housing (affordable to households earning 30 percent of median income) and no more than 20 percent may be spent on housing for households earning between 60 and 80 percent of median income. These requirements must be met over a five-year period.

***

Rhode Island reinstated its 15-member joint Housing and Senate Housing Act Implementation Oversight Commission. The commission held its first meeting since reinstatement Dec. 2. Originally created as part of the 2004 Low and Moderate Income Housing Act, the commission is comprised of senators, lawmakers, municipal officials and directors of housing groups. The purpose of the commission is to monitor and evaluate the implementation of the act, the development and adoption of the state strategic housing plan, to review the progress reports, to recommend any changes and to assess the need for resources to accomplish housing objectives. The Low and Moderate Income Housing Act required each city to designate 10 percent of its housing as affordable. Cities that did not meet this requirement had to submit annual updates to the state.

***

On Nov. 19, the Board of Equalization for the state of California unanimously approved a revised property tax annotation. This annotation holds that LIHTC properties in the Payments in Lieu of Taxes (PILOT) program may receive the state’s welfare exemption, allowing them to retain exemptions from property taxes. A memo was sent to the board on Nov. 7 requesting legal action for the proposed annotation. This memo discussed what the previous annotation required: certification that funds that would have been necessary to pay property taxes are used to maintain the affordability of, or reduce rents for, units occupied by lower income households. The memo said this annotation is not clear in stating that it applies only to the specific agreement. Because of this, it creates confusion and could potentially lead to the disqualification of low-income housing property from the welfare exemption. The memo stated that the revised annotation concludes that as long as the developer has maintained rents appropriately and has reasonable belief that its PILOT payments will be used to support or benefit low-income housing property, the developer can make the certification in good faith.

***

The Colorado Housing and Finance Authority (CHFA) released its 2013 LIHTC Guiding Principles Scored on Nov. 18. CHFA allocated $12.1 million in federal LIHTCs to 13 developments. There are 775 affordable units and 892 multifamily units available across the state to residents earning 60 percent of the AMI or below. The affordability restrictions of the units will remain in place for 40 years.

***

The Minnesota Housing Finance Agency (MHFA), on Nov. 7 awarded developments more than $54 million in low-income housing tax credits (LIHTCs) for 1,904 affordable housing units throughout the state. Four of the developments were made possible by the Governor’s 2013 Housing and Job Growth Initiative, which provides an interest-free deferred loan repayable in 30 years. Of the total allotment, $7.7 million was provided by the Metropolitan Council, the Minnesota Department of Human Services, Minnesota Department of Employment and Economic Development, Greater Minnesota Housing Fund and the Family Housing Fund.

***

On Nov. 20, $187 million was reserved to produce and preserve affordable housing throughout Washington, D.C. Gray announced in his State of the District address in February that he was committing $100 million to creating or preserving 10,000 affordable housing units by 2020. He also said he will work toward leveraging resources in the area’s private and nonprofit sectors to reach this goal.

***

Illinois Gov. Pat Quinn announced on Dec. 9 that more than 1,400 affordable housing apartments will be created or preserved. These units will be available to working families, seniors and people with disabilities and must earn at or below 60 percent of the AMI. Federal LIHTCs will finance the construction and restoration of more than 1,000 units in 16 developments in the areas of Chicago, the Metro East, Springfield and Peoria. The Illinois Housing Development Authority’s (IHDA’s) Preservation Now program, which provides funding through the Illinois Affordable Housing Trust Fund and other resources, will finance more than 450 units of affordable housing in six developments located in Southern Illinois, Peoria and the Quad Cities. A projected 2,400 jobs will be created. Developments approved for financing include Aurora Impact Initiative in Aurora, with forty units of single-family homes, and the May Apartments in Edwardsville, an independent living facility for seniors and people with disabilities, will be rehabilitated and a new wing will be constructed, providing 70 affordable apartments.

***

The California Tax Credit Allocation Committee (CTCAC) Nov. 20 sent a memo, effective immediately, updating its development staff regional assignments for program users within established geographic regions. Daniel Tran will oversee rural areas. Mayra Lozano will be responsible for the Capital and Northern regions, North and East Bay regions and San Francisco County will be overseen by Connie Harina. The Central Valley region, Central Coast region and South and West Bay regions will be overseen by Benjamin Schwarts. Finally, Jack Waegell and Marisol Parks will oversee the City of Los Angeles, Balance of Los Angeles County and Orange County.

***

The Wyoming Community Development Authority (WCDA) announced its new board officers Nov. 26. Pat Hand will be the new chair. Hand is a retired attorney and volunteers with the Wyoming State Bar Association. Lesli Wright will serve as the vice chair and is the senior vice president of risk management and Community Reinvestment Act officer at Hilltop National Bank. Wright is also on the board of directors for the Wyoming Housing Network Inc. and the Community Health Center of Central Wyoming. Kari Cooper will be the Secretary/Treasurer and is the executive director of Jackson Hole Air Service Improvement Resources.

DEALMAKERS

On Dec. 3, Stratford Capital Group announced the closing of Stratford Fund XI Limited Partnership (Fund XI). The $76 million LIHTC fund includes five institutional investors for 15 properties across nine states. More than 1,500 affordable apartment units are available for families and seniors. With the closing of the fund, 1,800 temporary jobs and more than 450 permanent jobs will be created.

***

U.S. Bank announced on Dec. 2 that it provided Meadow Ridge Apartments $7.2 million in LIHTC equity, in partnership with MSP Development and Movin’ Out. The $10.9 million development, located in Waukesha, Wis., is expected to be completed through the spring and summer of this year. The property will have a total of 70 one-, two- and three-bedroom units. Six of these units will be reserved for tenants with special needs. There will be 62 below market-rate units. Meadow Ridge is part of a larger development, Heritage Court Waukesha, a memory care community.

***

Birch Hills Apartment Homes in Brea, Calif., celebrated its grand opening in November. Part of the new La Floresta planned community, the development will provide 115 garden-style apartment homes situated in three-story buildings. There will be 22 one-bedroom units, 47 two-bedroom units and 46 three-bedroom units. Apartments will be available to tenants earning between 30 and 50 percent of the AMI.

***

RBC Capital Markets announced the closing of their National Fund 18, worth more than $100,000 million in LIHTC equity, on Oct. 28. More than 1,300 affordable housing units will be available in 10 multifamily developments and five senior developments. These properties are spread across 12 states, including Arizona, Washington, Colorado, California and Montana .

***

Boston Financial Investment Management LP announced in December the closing of a $125 million LIHTC multi-investor fund. Boston Financial Institution Tax Credits XL LP (ITC 40) has five investors with 21 properties throughout 13 states, including Washington, California, Louisiana, Alabama, Tennessee and Virginia.

***

City Hall Artspace Lofts received initial approval in November for $7.6 million in LIHTC funding to develop what is currently the Dearborn City Hall. The Michigan State Housing Development Authority (MSHDA) made the approval for the development of the affordable live/work facility for artists. The government office will be relocating, paving the way for Artspace, the development team, to begin work on the two-building site. The property will be mixed-use and will have 46 affordable units available, along with incubator blending studios, working space and galleries. Development is expected to total $16 million, with construction beginning in the summer.

***

Summer Town Estates Senior Housing in Guam broke ground on Sept. 25. The $8.7 million development will provide 240 one- and two-bedroom affordable housing units to seniors age 62 years old or older. Construction is expected to finish December 2015 and the property will be located in the former Lada Estates lot.

***

Enterprise Community Investment Inc. (Enterprise) announced on Dec. 11 the launch of their Enterprise Housing Partners 24 Fund. This will allow Enterprise to streamline the investment process and provide new resources for affordable housing developments across the country. Enterprise Housing Partners 24 Fund offers multi-regional pricing and provides varying yields with a single limited partnership agreement and fund closing. The $143.9 million fund has financed 13 deals.

***

Affordable Investment Advisors (AIA) announced on Nov. 26 the closing of the second transaction in their Opportunity Acquisition Fund. This investment includes mezzanine acquisition financing for an existing property. The 81-unit development is market rate and located in the District of Columbia. The Hampstead Cos., the general partner of the property, is a development firm and hired AIA to aid in structuring the property for LIHTC syndication.

PEOPLE IN THE INDUSTRY

South Dakota Sen. Corey Brown was awarded the Friend of Housing award by the South Dakota Housing Development Authority (SDHDA). The award is given to individuals and/or companies recognized for their efforts in providing affordable housing in the state. Mark Lauseng, executive director of SDHDA, said that Brown was given the award for his leadership in creating the Building South Dakota legislation (Senate Bill 235). S.B. 235, will create the South Dakota Housing Opportunity Fund and other programs to enhance economic development and education and to make certain deposits and transfers. It will also provide the fund with 25 percent of Building South Dakota Fund resources. The bill was signed into law March 25.

***

Liz Diamond was brought on to Lancaster Pollard’s California team as vice president in October. She will be responsible for expanding the firm’s investment banking and mortgage banking finance activities for income restricted and subsidized rental properties. Previously, Diamond worked with AFL-CIO Housing Investment Trust as director of the western region and as a senior investment officer. Prior to that, she was vice president as Green Park Financial. Diamond earned a Bachelor’s of Science degree in restaurant and institutional management from Pennsylvania State University.

***

Michelle A. Kraics, former director of LIHTC originations at Citibank, was recently hired by Raymond James Tax Credit Funds (RJTCF) as the director of acquisitions for the Northeast region. The national syndicator of affordable housing will have Kraics focus on property acquisitions, managing existing business and fostering relationships with developers and investors. Prior to working at Citibank, Kraics originated and structured LIHTC investments for Related Capital Company. Kraics earned a Bachelor of Science degree in economics from Columbia University.

***

The Affordable Housing Investors Council (AHIC) re-elected three governors and selected a new treasurer for 2014. The association of investors in developments financed with the federal LIHTC re-elected Gina Bender, Laura Bailey and William Pelletier to the board of governors, and chose Carly Fletcher as treasurer. Bender is senior vice president at proprietary and direct investments for the LIHTC Group at Bank of America. Bailey is managing vice president for community development finance at Capital One. Pelletier is managing director and head of single investor fund investments for JPMorgan Capital Corporation’s direct affordable housing group. Fletcher is head of originations for Nationwide Investment’s tax advantaged investments asset class.

***

On Dec. 5, Hunt Companies Inc. announced that Robert A. Wrzosek is the new president of the mortgage lending business of Centerline Holding Company. Wrzosek was previously on the board of directors for Walker & Dunlop, a commercial real estate finance company. He also had senior positions at Credit Suisse Securities (USA) LLC and was a partner at Eichner Norris & Neumann PLLC. Wrzosek holds an LL.M. in taxation from Georgetown University Law Center, a J.D. from Duke University School of Law and Bachelor of Science degree in finance and a Bachelor of Art degree in philosophy from Ithaca College. A recently acquired subsidiary of Hunt Companies Inc., Centerline Holding Company is a real estate finance and asset management company.

***

In November, Dave Puricelli joined U.S. Bancorp Community Development Corporation (USBCDC) as director of project managements for LIHTC investments. Prior to his appointment at USBCDC, Puricelli was senior vice president at Gardner Capital, an affordable housing developer and tax credit syndicator. Puricelli earned a masters in finance from the University of Chicago and a Bachelor of Arts degree in structural/civil engineering from Northwestern University.

***

The Kentucky Housing Corporation (KHC) appointed Lisa Beran, Rob Ellis, Amy Smith and Jim Statler as deputy executive directors. The appointment is part of KHC the organization’s initiative, KHC 20/20, to remodel the organization. A part of this initiative includes a staff realignment to streamline program administration. Beran’s responsibilities include compliance requirements across all KHC programs and departments. Ellis is responsible for administration of KHC’s housing production and state and federal housing programs. Smith will oversee business services. Statler is responsible for financial operations of KHC.

***

On Jan. 1, Martha McLennan, Steve Grimshaw and Jeff Judd officially joined the Federal Home Loan Bank of Seattle’s Affordable Housing Advisory Council. They will serve three-year terms that will end Dec. 31, 2016. Members of the council advise the bank on affordable housing and economic development market opportunities. McLennan is the executive director if Northwest Housing Alternatives (NHA), an Oregon organization that builds and preserves affordable housing. Grimshaw is the founder and owner of Grimshaw Construction and Grimshaw Investments LLC, which develops and manages affordable housing. Judd is the executive vice president of real estate for Cook Inlet Housing Authority in Alaska. Judd works with Alaska financial institutions to gather funding for affordable housing.

***

Great Lakes Capital Fund (GLCF) announced on Dec. 2 that James L. Logue III, chief operating officer of GLCF was elected to the board of directors of the Federal Home Loan Bank of Indianapolis. The eight members of the board are directors from organizations in Indiana and Michigan with knowledge in finance, housing or community development. Prior to joining GLCF, Logue was the executive director of the Michigan State Housing Development Authority. He currently serves on the boards for the National Housing Trust and the Corporation for Supportive Housing.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

Learn more about Novogradac's expertise and many services