Low-Income Housing Tax Credits News Briefs - January 2015

Thursday, January 1, 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

On Nov. 18, Sens. Al Franken, D-Minn.; Rob Portman, R-Ohio; Patty Murray, D-Wash.; and Susan Collins, R-Maine; released a Dear Colleague letterto all Senate offices in support of the Housing for Homeless Students Act of 2014 (S. 2723). The letter requests senators co-sponsor the bill, which would amend the Internal Revenue Code of 1986 to qualify homeless youth and veterans who are full-time students to live in low-income housing tax credit (LIHTC) properties. The Dear Colleague letter and S. 2723 are available at www.taxcredithousing.com.

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On Nov. 24, the National Council of State Housing Agencies (NCSHA) submitted comments on the Federal Housing Finance Agency (FHFA) proposed strategic plan for fiscal years 2015-2019. The plan outlines FHFA’s goals and priorities for overseeing Frannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBs). NCSHA commended FHFA for developing a plan that strikes a proper balance between safeguarding these entities’ fiscal health and ensuring that they continue to support a liquid and accessible housing finance market. NCSHA also expressed support for FHFA’s promise to work with Fannie Mae and Freddie Mac to increase their ability to partner with state housing finance agencies.

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The Office of the Comptroller of the Currency (OCC) released its schedule of Community Reinvestment Act (CRA) evaluations Dec. 2. The evaluations will be performed in the first quarter of 2015. The OCC encouraged public comment on the national banks and federal savings associations scheduled to be evaluated. It was suggested that comments be submitted to the institutions themselves or the appropriate OCC supervisory office. More information is available at www.occ.gov.

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The OCC announced Community Reinvestment Act (CRA) Evaluations for 36 national banks and federal savings associations Nov. 10. The evaluation period was Oct. 1-31, 2014, and of the 36 evaluations given, six were rated outstanding, 29 were rated satisfactory, one was rated as needs to improve and none were rated substantial noncompliance. More information is available at www.occ.gov.

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On Dec. 15, the Internal Revenue Service (IRS) released Announcement 2014-34 in Internal Revenue Bulletin 2014-51, which addresses the transfer of certain technical responsibilities. These responsibilities concern issues involving exempt organizations, qualified retirement plans and individual retirement annuities and accounts to the Office of Chief Counsel that will occur with the realignment of the Tax Exempt and Government Entities Division (TE/GE). Because of the realignment, the Office of Associate Chief Counsel will now assume the responsibilities of preparing revenue rulings, revenue procedures and other forms of published guidance, as well as issuing technical advice and certain letter rulings. The annual revenue procedures will be updated in January to reflect this realignment.

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STATE BRIEFS

The U.S. House of Representatives in late November unanimously passed H.B. 18-211, which exempts officials and employees of the Northern Marianas Housing Corporation from salary limitations imposed by the Commonwealth of the Northern Mariana Island (CNMI) Compensation Adjustment Act. At press time, the bill was awaiting Senate approval.

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The Wyoming Community Development Authority (WCDA) board of directors announced Nov. 20 the award of $2.8 million for affordable housing developments across the state. WCDA allocated $1.45 million in low-income housing tax credits (LIHTCs) and $1.05 million in HOME Investment Partnership program funds. Financing will go toward the development of four multifamily properties that will yield 94 rental units. The properties are Copper Mountain Apartments in Riverton, which will provide 12 units; Wolf Creek Apartments in Riverton, which will provide 12 units; Tigee Village, on the Wind River Reservation in Fort Washakie, which will provide 20 units; and CentrePoint, in Casper, which will provide 50 units. Developers will receive an annual allocation of LIHTCs for 10 years. The properties that received LIHTCs will have units available for residents earning 60 percent of area median income (AMI). The properties are expected to generate a combined $12.85 million in capital from out of state through the syndication of the tax credits.

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The West Virginia Housing Development Fund (WVHDF) announced Nov. 20 the release of the proposed 2015-2016 LIHTC qualified allocation plan (QAP). The QAP provides the criteria and requirements by which eligible low-income residential rental properties will be selected for LIHTC allocations. A public hearing discussing the QAP was held Dec. 9 at the funds offices. More information is available at www.taxcredithousing.com.

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On Nov. 24, the California Tax Credit Allocation Committee (TCAC) released a memorandum on appraisals of residential improvements on tribal property. The memo addresses questions about the applicability of these provisions to establish the value of existing residential improvements on Native American tribal land. TCAC stated regulations require that an appraisal include, at minimum, the sales comparison approach and income approach valuation methodologies, except in the case of an adaptive reuse or conversion, where the cost approach valuation methodology shall be used. TCAC said that this rule applies to all California tax credit applications, including those for existing residential properties on tribal land. The appraiser must seek and report on data regarding comparable sales in the area, as well as rental income derived from similar residential properties in the area. The appraiser may also provide cost approach data in their report, and that data may be used in determining a reconciled value. More information is available at www.treasurer.ca.gov.

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The Georgia Department of Community Affairs announced Nov. 19 the allocation of $22.4 million in federal LIHTCs for the construction and rehabilitation of 30 affordable rental housing properties throughout the state. Housing is available for working families, veterans, seniors and persons with disabilities. A total of 57 applications were submitted. Units in each development range from 36 units to 177 units. The 2014 awards will add 2,292 units to the portfolio.

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DEALMAKERS

Boston Capital announced Nov. 5 an investment in the construction of Villas at Christian Village. Located in King, N.C., the 38-unit apartment community for seniors will be developed by North Carolina Housing Foundation Inc., a nonprofit housing development organization. Construction will be financed with LIHTC equity. The property will include 38 two-bedroom apartments in 19 single-story buildings. Amenities will include a computer room, an outdoor seating area with gazebo and a 1,730-square-foot community building. Construction is expected to produce $4.1 million in local salaries and create more than 40 jobs.

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Great Lakes Capital Fund (GLCF) and Michigan Bankers Association Service Corporation (MBASC) announced Nov. 20 the closing of Michigan Community Fund, MBASC’s third equity fund for low-income seniors, families and residents with disabilities. The Michigan Community Fund, comprised of 13 Michigan banks, will provide $13 million to support the development and rehabilitation of 11 apartment communities across the state. The properties will yield 774 affordable housing units.

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Lancaster Pollard, along with Newbury Living, announced Nov. 24 the purchase and revitalization of Ligutti Tower in Des Moines, Iowa. The 139-unit affordable senior housing property was renovated with a $9.5 million loan from the Federal Housing Administration’s Section 221(d)(4) program. Lancaster Pollard aided with the acquisition, as well as secured debt financing in combination with 9 percent LIHTCs and Enterprise Zone Tax Credits.

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On Nov. 6, the Northern Marianas Housing Corporation held the groundbreaking for Ironwood Saipan, the seventh Ironwood property in the Marianas region, the archipelago in the northwestern Pacific Ocean. The 5-acre property will provide 80 affordable units and will be financed with LIHTCs provided by the Northern Marianas Housing Corporation. Jesse Palacios, corporate director of the Northern Marianas Housing Corporation, said Ironwood Saipan is the first LIHTC project in the Commonwealth of the Northern Mariana Islands (CNMI) to be funded entirely by private investors and private lenders. A total of 100 construction jobs are expected to be created, and the property is estimated to bring in $2.5 million in tax revenues. Amenities will include a 3,000-square-foot community center, a playground, covered pavilions with barbecue grills and a basketball court. Development is estimated to be completed by November 2015.

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On Nov. 11, HELP USA, a nonprofit organization providing homes, jobs and services to homeless families, veterans and victims of domestic violence, provided an update on the Hardy Williams Veterans Center in Philadelphia. The center, which broke ground in January 2014, will be at HELP Philadelphia IV, a new supportive housing development for veterans and seniors. The property will provide 61 units of permanent supportive housing for veterans, as well as transitional housing solutions and social services for residents. The Hardy Williams Veterans Center is anticipated to open in February 2015. The new center is named after Hardy Williams, former Pennsylvania state senator and Air Force officer. HELP USA operates three additional facilities in Philadelphia–Philadelphia Homes & Brady Veterans Center, Genesis Square Apartments and the Genesis Square Townhomes. A planned fifth housing development will have 56 apartments and will break ground in late 2015.

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MassDevelopment announced Nov. 18 the issuance of a $20 million tax-exempt bond to Wayne at Columbia LLC for the acquisition and renovation of seven affordable housing properties in Boston’s Dorchester and Mattapan neighborhoods. MassDevelopment also assisted Massachusetts’ Department of Housing and Community Development with the approval of federal LIHTCs, which produced $9.3 million in equity. The properties will yield 83 units of affordable housing. Renovations will include new kitchens, bathroom and heating systems, as well as new roofs, windows and refurbishing of the interior. Units will be available to households earning no more than 60 percent of the AMI.

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On Oct. 30, RBC Capital Markets’ Tax Credit Equity Group announced the closing of RBC National Fund 20. Total equity for the fund was $119.6 million. RBC National Fund 20 had five national investors and 18 LIHTC properties in 13 states, including California, Massachusetts, New York, Virginia and Washington. The fund included 1,454 units in 15 properties, which included one mixed multifamily and senior property, and two senior developments.

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PEOPLE IN THE INDUSTRY

The Non-Profit Housing Association of Northern California (NPH) announced that Amie Fishman would become executive director Jan. 5. Fishman previously worked as executive director of East Bay Housing Organizations, a nonprofit membership organization. Before that, she was director of supportive housing for Mission Housing Development Corporation, a nonprofit affordable housing developer. Fishman’s role was assumed after the retirement of Dianne Spaulding, who was with NPH for 22 years.

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BOND

On Nov. 19, Red Mortgage Capital and RED Capital Markets, the mortgage and financial industry regulatory authority investment banking arms of RED Capital Group, announced a $1.7 million Federal Housing Administration section 221(d)(4) mortgage and $5.5 million in tax-exempt bond financing for the Parqwood Apartments in Toledo, Ohio. Parqwood Apartments will be converted from public housing units into Section 8 rental-subsidized units under the Rental Assistance Demonstration (RAD) program. The property, operated by Lucas Metropolitan Housing Authority, will provide 134 units in a three-story building, with an adjoining one-story community building for seniors 55 years and older.