Low-Income Housing Tax Credits News Briefs - January 2018

Tuesday, January 2, 2018

LIHTC Industry

The Office of the Comptroller of the Currency (OCC) released Nov. 8, 2017, a Policies and Procedures Manual issuance describing its framework for evaluating certain types of licensing applications when an applicant bank has an overall less than satisfactory rating (needs to improve or substantial noncompliance) under the Community Reinvestment Act (CRA) or a less than satisfactory CRA rating in one or more geographic areas. The guidance applies to all OCC-supervised banks subject to the CRA, including community banks and is available at www.novoco.com/cra.

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The Federal Housing Finance Agency (FHFA) released the 2018 multifamily lending caps for Fannie Mae and Freddie Mac Nov. 21, 2017. The caps will be $35 billion apiece. The caps are both down from $36.5 billion in 2017 and are based on projections of the overall size of the 2018 multifamily originations market. The FHFA will review its estimates on a quarterly basis and adjust them if necessary, although it will not further reduce the caps. The notice is available at www.taxcredithousing.com.

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The OCC released Nov. 28, 2017, its schedule of CRA evaluations that will be conducted during the first two quarters of 2018. The OCC encourages public comment on the national banks and federal savings associations that will be evaluated and suggests that comments be submitted to the institutions at the mailing addresses listed on the schedule. Alternatively, comments can be submitted to the appropriate OCC supervisory office before or as early as possible during the month in which the evaluation is scheduled. The schedule is available at www.novovo.com/cra.

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The FHFA released the, “Duty to Serve Evaluation Guidance 2018-2020 Plan Cycle,” Nov. 29, 2017. FHFA’s evaluation guidance communicates four FHFA’s expectations regarding the process for developing Fannie Mae and Freddie Mac’s (the Enterprises) Underserved Markets Plans. In addition, the guidance presents the standard for FHFA to issue a non-objection to the plans and the process by which FHFA will evaluate the plans and report to Congress the Enterprises’ achievements under their plans each year. FHFA wants the Enterprises to develop meaningful plans that help the three underserved markets over a three-year time period. FHFA also wants the Enterprises to carry out innovative strategies that make an impact in the underserved markets. FHFA also wants to provide transparency to the public, Congress and the Enterprises about the way in which FHFA will evaluate the Enterprises’ performance on an annual basis. FHFA wants to build in sufficient flexibility in the design of the guidance in recognition that the Enterprises’ plans and FHFA’s evaluation approach are new processes. The Housing and Economic Recovery Act of 2008 established a duty for the Enterprises to serve three specified underserved markets–manufactured housing, affordable housing preservation and rural housing–by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for mortgage financing for very low-, low-, and moderate-income families in those markets.

LIHTC State

The North Dakota Housing Finance Agency (NDHFA) awarded $32 million in low-income housing tax credits (LIHTCs) in November 2017 to seven developers for the production of affordable housing. NDHFA also awarded $2.7 million from the National Housing Trust Fund (HTF), as well as $460,000 in Neighborhood Stabilization program (NSP) funding and $2.7 million from the state’s Housing Incentive Fund (HIF). Edwinton Place in Bismarck was awarded $8.1 million in LIHTCs, $1 million from the HTF, $500,000 from HIF and $460,000 from NSP. The property will provide permanent supportive housing for 40 individuals coming directly out of homelessness. The Edge Artist Flats in Fargo received $7.4 million in LIHTCs and $1.4 million from the HTF. The development will provide 42 apartments and supportive services to disabled tenants and to households at risk of homelessness. HomeField 2 Apartments in Fargo received $5 million in LIHTCs to support the development of 39 senior apartments including eight accessible apartments. Ellendale Apartments was awarded $755,000 from HIF to support the redevelopment of a 32-apartment property including accessibility improvements that improve the livability of the property for the tenants with disabilities. Pure Downtown in Grand Forks received $1.1 million conditional commitment through HIF to reserve 25 of its 50 apartments for low- to moderate-income households. Dakota Heights in West Fargo received $4.3 million in LIHTCs. The senior housing project will have a vacancy preference for elderly veterans with Veterans Affairs Supportive Housing vouchers. Six of the 30 apartments will be reserved as permanent supportive housing for individuals with physical and intellectual disabilities. Grace Garden in West Fargo received $6.7 million in LIHTCs. NDHFA also made a commitment of $325,549 from the HTF and $500,000 from HIF. The supportive housing project will serve 30 households at risk of homelessness, many of whom are transitioning from domestic violence.

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The Idaho Housing and Finance Association (IHFA) announced Nov. 16, 2017, that two programs may close at the end of the year if tax reform legislation considered by Congress results in the elimination of tax-exempt status for private activity bonds (PABs). If the legislation repeals the tax-exempt status for PABs, the Mortgage Credit Certificate will be available on loans closed no later than Dec. 31, 2017, and all loans reserved for the First Loan program before Nov. 14, 2017, must have been delivered to IHFA no later than Dec. 11, 2017, which would allow the department to deliver the tax-exempt loans under that program. The IHFA announcement said an update would be provided when the final outcome of the legislation is known.

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The Missouri Housing Development Commission Nov. 17, 2017, voted against allocating a scheduled $140 million in state LIHTC for fiscal year 2018. The vote came after Gov. Eric Greitens called the state LIHTC a failing program. The state’s cost of the program is funded over 10 years beginning one to three years after the investors in LIHTCs fund their equity in a construction project. This vote only applies only to the state credits in Missouri and does not affect previously allocated state LIHTCs. The federal LIHTCs for the state will be allocated. At press time, another vote was needed to de-fund the 2018 round and it was expected at the commission’s Dec. 19, 2017, meeting.

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The Tennessee Housing Development Agency (THDA) announced Dec. 4, 2017, the new Tennessee Housing Online Management Application System (THOMAS) for applicants of the LIHTC program. THOMAS is the new online system that will support all aspects of the Multifamily programs division at THDA. The system will support all allocation, construction, compliance and asset management activities for the division. The 2018 9 percent LIHTC competitive application was the first phase of THOMAS that launched in December 2017. 

LIHTC Dealmaker

BRIDGE Housing announced Nov. 15, 2017, the construction of San Leandro Senior Apartments in San Leandro, Calif. The 109 apartments will be built through modular construction: factory-built modules will be craned into place and assembled on a traditionally constructed concrete podium. Construction costs will be $39.3 million and will provide affordable one- and two-bedroom apartments to households earning up to 30 percent to 50 percent of the area median income (AMI). Amenities will include a community room with an adjoining community kitchen and an exterior courtyard. BRIDGE Housing will partner with Episcopal Senior Communities to provide services to the residents. San Leandro Apartments is the second phase of a development built on a former Bay Area Rapid Transit (BART) parking lot across from the San Leandro BART station. The first phase, completed in 2017, includes modularly constructed Marea Alta. Funding included $1.6 million in low-income housing tax credits (LIHTCs) from the California Tax Credit Allocation Committee. San Leandro Senior Apartments is expected to be complete mid-year.

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A rededication ceremony was held Nov. 15, 2017, for Gateway Tower Apartments in Duluth, Minn. The 40-year-old, 14-story building provides 150 apartments, with the second floor dedicated to homeless youth with the Life House program. Renovations, which cost $18.5 million, included several upgrades, including a new heating system, sprinkler system, upgraded elevators, energy-efficient windows and siding, as well as complete renovation of the apartments. Financing for the renovations included $15.5 million in LIHTCs issued by the Minnesota Housing Finance Agency.

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Rainbow Housing Assistance Corporation and Bethel Development Inc., announced Nov. 9, 2017, the development of two affordable housing properties in Arizona. Creekview Village Apartments is a family apartment complex in Prescott and the Revello is a senior living complex in Phoenix. The developments were funded with $1.5 million each in LIHTCs allocated by the Arizona Department of Housing. Creekview Village Apartments is a 102,000-square-foot complex that will comprise six three-story walk-up residential buildings and a one-story clubhouse. There will be 72 two- and three-bedroom apartments. Amenities will include a playground, a barbecue area, a walking trail and a basketball court. The Revello will be available to seniors 55 and older. The property will be comprised of one four-story building of approximately 81,000 square feet. There will be 76 apartments with one- and two-bedrooms. Amenities will include a library, a computer room, a hair care salon, a barbecue area, a pool and a community room. Rainbow will provide supportive service including before- and after-school youth enrichment programs, computer training, financial literacy classes, job training and nutrition classes. Both are under construction and expected to be completed in 2019.

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WNC announced $13.2 million in LIHTC equity Nov. 9, 2017, for the renovation of Woodglen Vista Apartments in Santee, Calif. The property consists of 188 apartments in eight, two-story residential buildings. There is also a single-story leasing office and a community center. Amenities include a clubhouse, a computer center, social services, a laundry facility, a picnic area, a swimming pool and 286 parking spaces. Apartments will be available to families earning household incomes at 50 percent and 60 percent of the AMI.

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The Woda Group Inc. announced Nov. 3, 2017, the opening of Atz Place in Kendallville, Ind. The affordable senior apartment community will take the place of the former Atz Ice Cream Shoppe. The new two-story elevator building has 24 one- and 14 two-bedroom apartments and is situated on 2 acres. Amenities at Atz Place include a multipurpose community room with kitchenette, a grandchild room, a fitness room and a laundry area. Atz Place will have an on-site Woda manager who will coordinate supportive services. Financing included $5.3 million in federal LIHTCs allocated by the Indiana Housing & Community Development Authority (IHCDA) with permanent financing in the form of a HOME loan from IHCDA. R4 Capital provided the LIHTC equity and Huntington Bank provided the construction loan. 

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An opening ceremony was Nov. 13, 2017, for the newly renovated Chambers Crescent, formerly the JFK Apartments, in Lakewood, N.J. Renovations on the 62 apartments were conducted in partnership with the Lakewood Housing Authority and Community Investment Strategies Inc. Renovations were made through the U.S. Department of Housing and Urban Development’s (HUD’s) Rental Assistance Demonstration (RAD) program. Fifty-three of the existing apartments were substantially renovated and an additional 10 apartments were newly constructed. A clubhouse was built with activity space, a catering kitchen and management offices. Financing for the development included LIHTC equity provided by Alden Torch, as well as NJ State Economic Recovery and Growth credits from the NJ Economic Development Authority and approximately $6 million in construction and permanent financing from the New Jersey Housing Mortgage and Finance Agency tax exempt bond program.

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Development for Louisiana Lofts in Savage, Minn., got the green light Nov. 1, 2017, with the confirmation of $8.4 million in LIHTCs from the Minnesota Housing Finance Agency. The workforce housing property will provide 54 apartments, with four apartments reserved for the long-term homeless and four apartments reserved for people with disabilities. The property contains a mix of one-, two- and three-bedroom apartments. The three-story building will cost more than $12.7 million to develop. Construction is expected to start in spring to early summer 2018.

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As of early November, developer Metropolitan Housing Development Corporation was preparing to break ground on the John Pennycuff Memorial Apartments in Chicago as of early November. With $16 million in multifamily housing revenue bonds and $5.6 million in LIHTCs, the seven-story, affordable-rate LGBTQ-friendly apartment complex will provide 88 studio, one- and two-bedroom apartments homes. The transit-oriented property will include ground floor retail and 18 parking spaces.

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Development of the Peaks of Oakwood in Oakwood, Ga., received a financial boost with $23.2 million in LIHTCs from the Georgia Department of Community Affairs in early November. The $12 million Peaks of Oakwood is planned on 9 acres and would provide 84 apartments, 13 of which would be income-restricted. Amenities will include a clubhouse, a community room for resident gatherings and functions, a laundry area and a playground and gazebo. Peaks of Oakwood is expected to open July 1, 2019.

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A ribbon-cutting ceremony was Nov. 14, 2017, for Oneonta Heights. The $15.9 million affordable housing property in Oneonta, N.Y., includes 60 apartments in seven buildings at three sites throughout the city. Funding included $8.5 million in LIHTCs from the New York State Homes and Community Renewal agency, as well as a $10.5 million Community Preservation Corporation construction loan and a $550,000 private pension fund permanent loan. Additional funding included $2.6 million from the Housing Trust Fund, $300,000 from the city of Oneonta, $3.8 million in NYS HOME funds and $150,000 from the New York State Energy Research and Development Authority.

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Southview Apartments in Seven Mile Ford, Va., reopened with a ribbon-cutting ceremony Nov. 14, 2017, after extensive renovations. The 72-apartment complex received $5.4 million in LIHTCs from the Virginia Housing Development Authority and $5.5 million in equity from Stratford Capital Group to finance rehabilitation. Financing also included a $3.3 million FHA 221(d)(4) mortgage originated by Walker & Dunlop LLC. Renovations included new bathroom vanities, water-sense shower heads and toilet and hard-wired smoke detectors. External improvements included updates to sidewalks, pavement and accessible parking ramps. In addition, renovation to the existing office building provided additional space for a community room with fully accessible kitchen and bath, a computer lab, a laundry room, a leasing office and a maintenance room. 

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WNC announced Nov. 20, 2017, $8.6 million in LIHTC equity for the new construction of St. Ignatius in Sanford, Maine. The senior housing community offers 66 apartments to seniors 55 and older who earn between 50 percent and 60 percent of the AMI. Amenities include on-site management, a community room, a centralized laundry room, social services and a gazebo. 

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Steele Properties announced Nov. 21 the $41 million acquisition and renovation of Sleepy Hollow Apartments in Monticello, N.Y. Renovations on the 1970 property includes both exterior and interior work, including apartment updates, new roofs, HVAC systems and plumbing and electrical upgrades. Amenities include a new community building, a new playground and outdoor pavilion, an upgraded laundry facility and accessibility improvements. Sleepy Hollow Apartments comprises 23 buildings with 229 one-, two-, three- and four-bedroom apartment homes on 25.7 acres. Rehabilitation was financed with LIHTCs by New York State Homes and Community Renewal (NYSHCR) and LIHTC equity provided by PNC Bank. Tax-exempt bond financing was provided by NYSHCR’s SONYMA Credit Enhancement program

LIHTC People

The Massachusetts Housing Finance Agency (MassHousing) announced Nov. 14, 2017, the appointment of Thomas J. Lyons as acting executive director. He will lead MassHousing on an interim basis while the board searches for a permanent executive director. Lyons is MassHousing’s managing director of government affairs and communications. Before this role, he served for 13 years as manager of MassHousing’s community services department and before joining MassHousing, Lyons was the executive director of the New England Center and Home for Veterans. Lyons replaces Tim Sullivan.

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Penrose LLC announced Nov. 20, 2017, the addition of William F. Little as regional vice president of development in Chicago. Little will oversee the execution of the Cabrini-Green redevelopment in Chicago. He will also be responsible for the continued growth of Penrose’s development pipeline in Illinois and Indiana. Before joining Penrose, Little was with Hunt Development Group LLC. Before that, he served as executive vice president of development at the Chicago Housing Authority. 

LIHTC Bond

Steele Properties announced the $33.7 million acquisition and rehabilitation Nov. 15, 2017, of Raleigh Millbank Apartments in Raleigh, N.C. Raleigh North Apartments and Milbank Court Apartments will be combined into Raleigh Millbank. There are 43 two-story townhome-style buildings and 230 apartments with a mix of two- and three-bedroom apartment homes on 25.4 acres. Renovations includes interior and exterior work including new roofs, windows, plumbing and electrical upgrades, as well health, safety and security enhancements and energy-efficiency improvements, new kitchens and bathrooms, new flooring and interior paint. Property amenities include a renovated community building with a new laundry facility. Rehabilitation was financed with $10.8 million in 4 percent low-income housing tax credits allocated by North Carolina Housing Finance Agency, as well as $23 million in bond financing.