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Low-Income Housing Tax Credits News Briefs - July 2011

AFFORDABLE HOUSING INDUSTRY

The Internal Revenue Service (IRS) is soliciting comments concerning the low-income housing tax credit (LIHTC) regulations for federally assisted buildings. The regulation in T.D. 8302 provides guidance regarding compliance with the waiver requirement of Section 42(d)(6) of the Internal Revenue Code. There are no changes proposed to the regulation at this time; the invitation to comment was issued as part of the effort to reduce paperwork and respondent burden as required by the Paperwork Reduction Act of 1995. Written comments must be received on or before August 15, 2011 to be considered. See the June 14 Federal Register notice for more details.

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The U.S. Department of Agriculture (USDA) Rural Housing Service (RHS) announced the availability of $31 million for fiscal year (FY) 2011 under the Section 538 Guaranteed Rural Rental Housing program. Eligible projects include rehabilitation and new construction of affordable rural rental housing. RHS said it will commit program dollars first to applicants that were approved under notices of funding availability from previous years. Applications will be accepted until December 30, 2011. See the May 26 Federal Register notice for more details.

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A House Financial Services subcommittee held a hearing on a draft bill entitled The FHA-Rural Regulatory Improvement Act, which would move USDA's rural housing programs to an office under the U.S. Department of Housing and Urban Development's (HUD's) auspices. The bill would also impose fees to make the Section 538 program self-supporting and make changes in FHA and Fannie Mae. The text of the draft bill is available online at financialservices.house.gov.

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The National Affordable Housing Management Association (NAHMA) announced the winners of the second annual Vanguard Awards, which recognize substantially rehabilitated or newly constructed affordable multifamily developments. NAHMA said the awards pay tribute to developers of innovative, creatively financed developments and demonstrate that new affordable housing is a positive addition to any community. Under the new construction award category, City Arts in Baltimore, Md. received the award for small property; and the large property recipient was Commons at Buckingham in Columbus, Ohio. Ashland Village in San Leandro, Calif. received the award for major rehabilitation of an existing rental housing community. More information about the awards is available at www.nahma.org.

DEALMAKERS

Affordable Housing Associates, Enterprise and local officials celebrated the reopening of 401 Fairmount after an extensive rehabilitation on the mid-rise apartment building in Oakland, Calif. The energy-efficient property features 31 one- and two-bedroom units for low-income residents, including the formerly homeless and persons living with HIV/AIDS. On-site services are available for residents with special needs. Financing for the $11.5 million rehabilitation project was provided by the tax credit assistance program, Enterprise, Wells Fargo, the city of Oakland, the Mental Health Service Act, Alameda County, Low Income Investment Fund, Northern California Community Loan Fund and the Oakland Housing Authority.

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The Richman Group Affordable Housing Corporation has closed a $250 million LIHTC fund. The fund, U.S.A. Institutional Tax Credit Fund LXXXIV LP Fund 84, includes a portfolio of 28 properties located in 15 states; eight institutional investors contributed the $250 million in equity. Richman said the fund, which was oversubscribed by more than $100 million, will add 2,325 units to its portfolio of more than 100,000 units.

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Meridian Investments Inc. closed funding on a 13-property LIHTC fund that is expected to create more than 1,400 jobs and generate more than $40 million in revenue across 10 states. WNC Institutional Tax Credit Fund 34 LP is composed of nine institutional investors that partnered with WNC to build affordable housing in Wisconsin, Massachusetts, New Jersey, Iowa, New York, Arkansas, Indiana, Nebraska, Oregon and Illinois. As the 20th largest apartment owner in the country, WNC said it has more than $4.9 billion in real estate assets that include more than 1,050 properties in 45 states.

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National Community Renaissance held a grand opening for Vista del Cielo, a 50-unit LIHTC development in Montclair, Calif. The property offers one-, two- and three-bedroom apartments to households earning between 30 and 60 percent of the area median income. Amenities include a community center, a swimming pool and a tot lot. The $16.5 million development's financing came from Montclair Redevelopment Agency, County of San Bernardino Department of Community Development and Housing, California Community Reinvestment Corporation and JP Morgan Chase, as well as developer equity and federal LIHTC equity supplied by Hudson Housing Capital.

STATE BRIEFS

A review of Montana's draft qualified allocation plan (QAP) was conducted to ensure that the QAP's policies and procedures treated all applicants equally and did not discriminate against tribal applicants. The reviewer found that the Montana Board of Housing's policies did not appear discriminatory, but the reviewer did make several recommendations for revisions to the QAP, including adding language to specify differences in tribal development where appropriate, making zoning a threshold requirement, incorporating selection criteria under Section 42 into the QAP, and changing certain scoring preferences. See a copy of the analysis and recommendations on the QAP page at www.taxcredithousing.com.

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The Iowa Finance Authority (IFA) announced the award of more than $18 million in federal LIHTC and HOME funds to build or rehabilitate nearly 800 affordable housing units. IFA's board of directors selected 15 developments to receive more than $10.3 million in LIHTCs. The agency received 59 LIHTC applications requesting more than $37 million for fiscal year 2011. Under the HOME program, the board approved more than $4 million to support six LIHTC properties and more than $3.5 million to assist 11 homeownership and rental developments. In addition, the city of Des Moines recommended a $543,000 allocation of local HOME funds to assist three LIHTC developments. A list of recipients and award amounts is available at www.iowafinance.com.

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The New Hampshire Housing Finance Authority will commit nearly $3 million in LIHTCs to support the construction of 218 affordable rental units in five developments. The agency expects the credits to leverage $28 million in private equity investment and create approximately 500 construction jobs. The five properties selected to receive LIHTC reservations are Conway Pines, a 32-unit development in Conway; Housing at the Meeting Place Phase II, which will add 26 senior housing units to a larger mixed-use development in Exeter; Cheshire Brookbend, a 35-unit development in Keene; Cotton Mill, a 101-unit historic property in Nashua; and Plymouth Woods, a 24-unit townhouse development in Plymouth Woods.

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Oregon Housing and Community Services (OHCS) received 43 applications for its 2011 consolidated funding cycle (CFC), which includes state and federal LIHTC awards. OHCS has $10 million available under the federal LIHTC and $7 million under its Oregon Affordable Housing Tax Credit program. Of the 43 applications submitted, 17 are for new construction and 11 are for preservation projects, OHCS said, and the combined cost of all projects is nearly $256 million. More information about the CFC is available at www.ohcs.oregon.gov.

PEOPLE IN THE INDUSTRY

Former Sen. George A. Mitchell, a principal author of the low-income housing tax credit (LIHTC) component of the Tax Reform Act of 1986, rejoined law firm DLA Piper as chairman emeritus and ex officio member of the firm's global board. In his new role, Mitchell will work with firm leaders on global client development and management as well as strategic initiatives. He will also advise on significant arbitration and mediation projects. Mitchell most recently served as the U.S. Special Envoy for Middle East Peace, and before that he was partner and chairman of DLA Piper's global board and chairman of the board of the Walt Disney Company. Prior to joining DLA Piper in 2003, Mitchell spent 14 years in the Senate. He attended Georgetown University Law Center, later serving as a U.S. Department of Justice trial attorney and a U.S. District Judge for Maine.

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Freddie Mac named David Brickman as its new senior vice president in charge of the multifamily division. He succeeds Mike May, who will leave the company on July 15. Brickman will be responsible for customer relations, product development, marketing, sales, loan purchase, asset management, capital markets and securitization for the company's multifamily business, which includes its LIHTC portfolios. Most recently, Brickman served as vice president of multifamily CMBS capital markets.

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Dennis L. Mesa was named executive director of Kansas Housing Resources Corporation (KHRC). He will oversee KHRC's staff and daily operations, lead the corporation's housing and asset management programs, and work to strengthen agency partnerships. KRHC said that one of the first projects Mesa will oversee is a redesign of the agency's web site, www.kshousingcorp.org. Prior to joining KHRC, Mesa served twice as mayor of Garden City, Kan. and has held leadership positions at numerous civic organizations.

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Arnie Adler, director of the New York State Department of Housing and Community Renewal's (HCR's) LIHTC program, was named Advocate of the Year at the New York State Association of Affordable Housing's (NYSAFAH's) annual conference. Adler has worked in the office of finance and development for more than 24 years, and guides the agency's 9 percent LIHTC portfolio from application through construction and completion.

BONDS

The Internal Revenue Service (IRS) has released revised versions of Form 8038 and Form 8038-R. Tax-exempt bond issuers use Form 8038, Information Return for Tax-Exempt Private Activity Bonds, to provide the IRS with the information required by Internal Revenue Code (IRC) section 149 and to monitor the requirements of IRC sections 141 through 150. State and local bond issuers use Form 8038-R, Request for Recovery of Overpayment under Arbitrage Rebate Provisions, to request a refund of amounts paid with Form 8038-T. Download the updated forms at www.taxcredithousing.com.

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Following California Gov. Jerry Brown's budget revision allowing the Department of Housing and Community Development (HCD) to make new funding awards, the agency released a notice of funding availability (NOFA) schedule. Under the Multifamily Housing Program, $80 million is available in fiscal year 2011. Access more information and a copy of the NOFA schedule at www.hcd.ca.gov.

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The IRS Office of Tax-Exempt Bonds (TEB) initiated a questionnaire project to evaluate the post-issuance compliance and record retention policies, procedures and practices of issuers and conduit borrowers of tax-exempt advance refunding bonds. TEB distributed the questionnaire to 269 governmental entities that between July 1, 2009 and June 30, 2010 issued advance refunding bonds to refinance governmental bonds. The questionnaire also went out to 31 exempt organizations that benefitted from advanced refunding bonds that were issued during the same period to refinance qualified 501(c)(3) bonds. Advance refunding bonds are issued to refinance other outstanding bond issues prior to their redemption or retirement. The IRS said this project is the fourth time TEB has used compliance check questionnaires to measure tax compliance in the municipal bond market. More information and copies of the questionnaire and cover letter are available at www.irs.gov.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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