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Low-Income Housing Tax Credits News Briefs - January 2017

LIHTC Industry

The Office of the Comptroller of the Currency (OCC) released Community Reinvestment Act (CRA) evaluations Nov. 2, 2016, for 33 national banks, federal savings associations and insured federal branches of foreign banks. The evaluation period was for the month of October 2016. Of the 33 evaluations, two rated as outstanding, 30 rated as satisfactory and one rated as needs to improve.

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On Nov. 16, 2016, PNC announced the completion of PNC Affordable Rental Housing Preservation Fund 1 LLC, a $100 million affordable rental housing fund. PNC Fund 1 will provide the financing for the acquisition of affordable rental housing for families and seniors. PNC Fund 1 is PNC’s first multi-investor preservation fund, with seven institutional investors, including PNC Bank, and will be managed by PNC Real Estate.

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The Government Accountability Office (GAO) released Nov. 17, 2016, the report, “Federal Housing Finance Agency: Objectives Needed for the Future of Fannie Mae and Freddie Mac After Conservatorships.” In 2014, the Federal Housing Finance Agency’s (FHFA) provided a new strategic plan for the conservatorships of Fannie Mae and Freddie Mac (the enterprises) with reformulated goals and supporting actions that reflect a shift in priorities and changing market conditions. The report addresses this change and the implications for the future of the enterprises. Compared with the 2012 plan, FHFA increased its emphasis on maintaining credit availability and foreclosure prevention options, shifted away from shrinking the enterprises as a way to reduce taxpayer risk and reduced the scope of the securitization infrastructure being built. GAO found that in the absence of congressional direction, FHFA’s shift in priorities altered market participants’ perceptions and expectations about the enterprises’ ongoing role. In addition, GAO said FHFA halted several actions aimed at reducing the scope of enterprise activities and is seeking to maintain the enterprises in their current state. The full report is available at www.gao.gov.

LIHTC State

The Washington State Housing Finance Commission (WSHFC) announced Nov. 3, 2016, the approval of $328 million in tax-exempt bond and low-income housing tax credit (LIHTC) financing to construct or preserve more than 1,800 affordable housing apartments throughout the state. Financing was approved for properties in Seattle, Auburn, Des Moines, Federal Way, Mill Creek, Olympia and Spokane. Tax-exempt bond awards ranged from $2.3 million to $144 million, and estimated tax credit equity ranged from $11.8 million to $27.9 million. In addition, WSHFC approved financing for three nonprofit organizations. Sea Mar Community Center in Seattle received a $7 million tax-exempt bond, the Seattle Academy of Arts and Sciences received a $28.5 million tax-exempt bond and the Children’s Institute for Learning Differences in Renton received a $4.6 million tax-exempt bond. A complete list of properties that received awards is available at www.taxcredithousing.com.

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The Georgia Department of Community Affairs (DCA) announced $20.5 million in federal LIHTCs Nov. 15, 2016, for the construction or rehabilitation of 25 affordable rental housing properties throughout the state. The 1,628 affordable apartments will be available to working families, seniors and persons with disabilities. More than $250 million in local income is expected to be produced, as well as nearly $47.5 million in local government revenue and nearly 3,500 construction jobs and approximately 950 ongoing local jobs each year. There were 79 applications submitted requesting 2016 LIHTC awards. A complete list of awards is available at www.taxcredithousing.com.

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On Nov. 21, 2016, New Hampshire Housing awarded 2016 LIHTCs to six affordable housing properties. New Hampshire Housing stated in a press release that the LIHTC awards are expected to generate nearly $29 million in equity for the construction of 188 apartments. A total of 158 of the apartments will be affordable. The six properties that received LIHTCs were Bethlehem Workforce Housing in Bethlehem, Newfound River Apartments in Bristol, Three Meeting Place and Homestead House at the Meeting Place in Exeter, Gilford Village Knolls 3 in Gilford, and Townhomes at Whittemore Place Phase II in Londonderry.

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The South Dakota Housing Development Authority’s (SDHDA) announced Nov. 11, 2016, that the board of commissioners approved $8.2 million in funding for the construction and rehabilitation of 14 affordable housing developments throughout the state. The board approved $2.8 million in LIHTCs, $3.8 million in HOME Investment Partnerships program funding, $838,000 in Housing Trust Funds (HTF) and $835,000 in Housing Opportunity Funds (HOF) funding. A total of 191 multifamily apartments will be built and 62 will be rehabilitated.

LIHTC Dealmaker

On Nov. 1, 2016, Alden Capital Partners and the Housing Authority of the City of El Paso (HACEP) announced the closing of $6 million in low-income housing tax credit (LIHTC) equity financing for the rehabilitation of two affordable apartment complexes in El Paso, Texas. Rehabilitation for George W. Baines and Charles R. Morehead Apartments began August 2016 and is scheduled to be complete by August 2017, with apartments available to families and seniors earning at or below 60 percent of the area median income (AMI). Baines will provide 58 apartments and Morehead will provide 62. Baines will provide central laundry facilities, on-site management and a clubhouse, while Morehead will provide barbecue grills and off-street parking. Alden Capital Partners facilitated the investment of federal LIHTC equity through its multi-investor fund, Alden Capital Partners Tax Credit Fund 20. Alden also provided equity bridge financing through the purchase of unsecured, tax-exempt Series B bonds. The rehabilitation is part of HACEP’s goal of revitalizing its entire 6,100-apartment public housing portfolio through the U.S. Department of Housing and Urban Development’s (HUD’s) Rental Assistance Demonstration (RAD) program.

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ROEM Development Corporation held the groundbreaking for Evelyn Family Apartments in Mountain View, Calif., on Oct. 19, 2016. The affordable multifamily apartment community will be located on a 1.93-acre site and will offer 116 studio, one-, two- and three-bedroom apartments to families earning up to 60 percent of the AMI. Amenities for the $64 million development will include a large community room with a kitchenette, a homework center with computers, a fitness room and a private shuttle to and from the local transit and schools. Evelyn Family Apartments is receiving 4 percent LIHTCs, and Citi Community Capital provided $32 million in tax-exempt construction financing. In addition, investment support was provided by AEGON USA Realty Advisors LLC and the City of Mountain View provided $22.3 million in financial backing. Completion is slated for August 2018.

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The grand opening celebration for Linden Grove Veteran Apartments on the St. Cloud VA Health Care System campus in St. Cloud, Minn., was Dec. 14, 2016. The property features 37 fully furnished studio, one- and two-bedroom apartments in a three-story building on 6 acres of land. Amenities include a community room with kitchenette, a TV lounge area, an exercise facility, a library, a playground and a computer center, as well as on-site supportive services provided by the Minnesota Assistance Council for Veterans (MACV). These services include job-search assistance, computer skills training and health care services. The affordable, permanent supportive housing community has priority placement for homeless or at-risk of homelessness veterans earning no more than 60 percent of the AMI. Linden Grove Veteran Apartments is a public-private partnership between VA and lead developer Sand Companies Inc. Minnesota Housing Finance Agency provided LIHTCs and WNC provided approximately $2 million in LIHTC equity.

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The ribbon-cutting ceremony for Port Landing, a 100 percent affordable apartment community in Cambridge, Mass., was Nov. 14, 2016. The property provides 20 apartments, with 10 apartments to be rented to residents earning no more than 60 percent of the AMI, eight apartments reserved for residents earning no more than 50 percent of the AMI and two apartments set aside for households earning no more than 30 percent of the AMI. Development costs for Port Landing totaled $9 million and construction was financed with a $4.9 million tax-exempt bond issued by MassDevelopment and purchased by Cambridge Trust Company. In addition, Massachusetts Housing Investment Corporation provided $3.6 million in LIHTC equity, the Massachusetts Department of Housing and Community Development provided $2 million in loans, and the city of Cambridge provided $3.5 million in loans through its Affordable Housing Trust fund.

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Construction of Cornelius Place, a mixed-use development in Cornelius, Ore., was given the green light Nov. 21, 2016. The development will include an expanded Cornelius Public Library on the ground floor, a community meeting space, a YMCA center and 45 affordable apartments. The apartments will include two floors of studio, one- and two-bedroom apartments available to seniors 55 and older earning up to 50 to 60 percent of the AMI. Amenities will include a courtyard, community room and on-site laundry. Financing for Cornelius Place will come in the form of LIHTCs and grants from Oregon Housing and Community Services (OHCS), HOME funding from Washington County and project-based Section 8 vouchers from the Housing Authority of Washington County. Cornelius Place is a joint development by the city of Cornelius Public Library, Bienestar and BRIDGE Housing. The groundbreaking is scheduled for summer of 2017.

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On Nov. 3, 2016, UnitedHealthcare announced the investment of $2.3 million in LIHTC equity for Riverbend Estates Senior Community, a new 42-unit affordable-housing development in Washington, Mo. The announcement was made at the groundbreaking ceremony. Amenities will include on-site management, a community room, a fitness center and a computer center. UnitedHealthcare’s investment was made in partnership with Affordable Equity Partners (AEP). The property will be developed by MOCAP Development and managed by Fairway Management.

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The grand opening celebration of Los Angeles property Selma Community Housing was Nov. 3, 2016. The 66-apartment development, adjacent to Selma Elementary School, prioritizes homes for families and school district employees earning between 30 percent and 60 percent of the AMI. The $32.9 million property was developed by Abode Communities and financed with a 66-year ground-lease contribution from the district valued at $1.9 million, as well as a $26.5 million construction loan, a $2.8 million permanent loan and $20.7 million LIHTC equity provided by Union Bank.

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Steele Properties acquired in mid-November 2016 the Rolling Hills apartment complex in Winston-Salem, N.C., with plans to rehabilitate the property using 4 percent LIHTCs. The purchase was conducted via 4 percent LIHTCs allocated by the N.C. Housing Finance Agency and $7.6 million in tax exempt bonds issued by the city of Winston-Salem. The property, built in 1971, has 110 apartments comprising six, two-story brick buildings, all of which will undergo renovations beginning January that are expected to last approximately one year. Conversions will make apartments handicapped-accessible, flooring will be replaced and new window treatments and blinds will be installed. Upgrades will be done to the kitchens and bathrooms, and smoke and carbon monoxide detectors will be replaced. There will also be installation of LED lighting throughout the complex and a new key fob vehicle access gate. The apartment complex will be upgraded with amenities such as an upgraded laundry room, renovated community room and office, as well as a new outdoor playground and tot lot. Acquisition and rehabilitation will total $12.4 million.

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KTGY Architecture + Planning announced Nov. 2, 2016, the construction of two affordable family communities in Irvine, Calif. Luminaira at Beacon Park and Espaira at Beacon Park are a collaborative effort between FivePoint, Related California, Riverside Charitable Corporation and El Toro Housing Initiative Collaboration (ETHIC Housing). The communities provide a combined 166 two- and three-bedroom, energy-efficient affordable apartments for low-income families on 10.7 acres. Amenities will include a social services center with a kitchen, media lounge, computer center and play area. Additional amenities will include a pool, dog run, barbecue area and picnic pavilion. The on-site supportive services will include after-school programs and educational classes. KTGY was the design architect for Luminaira at Beacon Park and Espaira at Beacon Park, which are expected to be completed in 2017.

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On Nov. 15, 2016, Boston Capital announced a LIHTC equity investment in the construction of 468 homes in two affordable apartment communities for families. Copper Wood, a 228-apartment development in Lacey, Wash., and Copper Range, a 240-apartment development in Colorado Springs, Colo., will be available to families earning 60 percent or less of the AMI. Copper Wood will provide 48 one-, 124 two-, 44 three- and 12 four-bedroom apartments in nine three- and four-story garden style buildings on nearly 10 acres. Of the 228 apartments, 46 units will be set aside for large households and 46 will be set aside for households with disabilities. Amenities will include a community room with kitchen, a business center, an exercise room and a playground. Copper Range will provide 48 one-, 140 two- and 52 three-bedroom apartments in 10 three- and four-story garden-style buildings on 13.2 acres. Of the 240 apartments, 17 will be targeted to households earning 50 percent or less of the AMI. Amenities will include a community room with a kitchen, an exercise room, a business center and a playground.

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Construction of Tindall Senior Towers in Macon, Ga., is on schedule to begin this month. The Macon Housing Authority says that they will begin construction on the towers this month, with a completion date of early of 2018. There will be 76 affordable senior apartments provided along with a community center. Financing for the $14 million development includes $6.6 million in LIHTCs. Tindall Senior Towers is a multiphase development, with the construction of 64 family apartments planned for Phase 2.

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The grand opening of Ebenezer Square in West Seneca, N.Y., was Nov. 17, 2016. The three-story, 124,000-square-foot mixed-use development replaced a long vacant big box store. The property features 100 apartments for individuals with behavioral health needs and low-income families. There are three stories and 25 affordable one- and two-bedroom apartments, and 75 apartments reserved for residents with behavioral health issues. Also included are lounge areas on each floor, an outdoor picnic area and a community room. Financing for Ebenezer Square included $6.8 million in LIHTCs provided by the New York State Homes and Community Renewal and $16.5 million in tax-exempt bonds provided by the Dormitory Authority of the State of New York. In addition $1.8 million in New York state solar tax credits for solar panel installation. A 150-kilowatt solar array is expected to generate approximately 172,000 kilowatts annually, which is estimated to account for about 75 percent of the building’s electrical use. Construction costs totaled $24.4 million.

LIHTC People

Hunt Mortgage Group, a financer of commercial real estate, announced Nov. 2, 2016, that Carl Pankratz, vice president of originations, was honored by the Texas House of Representatives for his community service to the city of Rowlett. State Rep. Angie Chen Button presented Pankratz with a resolution from the House. Pankratz specializes in financing multifamily properties. Previously, he was the deputy mayor pro tem and was elected to two terms on the Rowlett City Council.

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Dominium, an apartment development and management company, announced the appointment of Siera Swedeen-Kellogg as a property accountant Nov. 14, 2016, at its Plymouth, Minn., headquarters. In this role, Swedeen-Kellogg manages financials for a portfolio of properties, assists property managers with daily accounting processes and prepares monthly bank reconciliations. Before this role at the company, she was an accounting assistant, accounts payable-cash management administrator and accounts payable intern.

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Hunt Mortgage Group announced Nov. 16, 2016, the opening of a Houston office and the hiring of Tony Talamas as vice president, who will oversee this new office. Talamas will focus on originating agency debt, primarily small balance loans under the Freddie Mac and Fannie Mae Small Balance Loan programs. Before joining Hunt, Talamas was vice president at BMC Capital. He had also founded his own firm, Fountainhead Intermediary LLC, to secure debt for multifamily and commercial real estate. Talamas also held positions with Deerpath Capital, ECOtality, Wells Fargo & Washington Mutual and Merrill Lynch. In addition, Hunt announced Nov. 22, 2016, the hiring of three new executives to its affordable housing team. KC Peterson was named vice president, William Jones was appointed managing director and Matt Meskill joined as director. Jones and Meskill will operate out of Hunt’s New York office, while Peterson will be based in Tysons Corner, Va. Jones was with Love Funding Group for 16 years before joining Hunt. Most recently he was a senior director, loan originator at Love Funding. Peterson was an underwriter and originator at Pillar Capital Finance LLC. Before that he served as an underwriter at Metropolitan Funding Corporation. Meskill was with Love Funding since 2011 and served as production analyst.

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BRIDGE Housing announced Nov. 16, 2016, that Smitha Seshadri will rejoin the company in her new role as vice president, effective this month. She will oversee construction and design standards, policies and procedures for BRIDGE’s real estate development footprint from San Diego to Seattle. Before returning to BRIDGE, Seshadri served as vice president of real estate at Habitat for Humanity Greater San Francisco. Before that, she was with BRIDGE Housing for nine years, first as a senior project manager and then as director of development.

Journal Category:

Low-Income Housing Tax Credits

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