Low-Income Housing Tax Credits News Briefs - July 2013

Monday, July 1, 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

The National Housing Conference and Center for Housing Policy released a guide highlighting solutions to veteran homelessness in May. “Veterans Permanent Supportive Housing: Policy and Practice” highlights elements, funding and examples of developments that demonstrate how to approach serving homeless and at-risk veterans. The guide states that permanent supportive housing relies on having little-to-no hard debt, property-based rental assistance and funding for supportive services. Examples provided in the guide are Hope Manor Apartments, Chicago, Ill.; Silver Star Apartments I, Battle Creek, Mich.; New Directions Sepulveda I and II, Los Angeles, Calif.; and American Legion Apartments, Jewett City, Conn. The guide is available at nhc.org/vetsguide.

***

The National Association of Home Builders (NAHB) held its annual legislative conference in June and reported that more than 750 builders attended to discuss housing policies. Builders also met with their senators and representatives to discuss tax reform, housing finance, immigration reform, and credit for housing production. NAHB members advocated for housing tax incentives, including mortgage interest deduction. They also argued for restructuring and the housing credit it provides, and wanted the federal government to plan to back up the housing finance system.

***

The second in a series of papers on the multifamily housing market was released on May 29 by Fannie Mae and Hoyt Advisory Services. The study, “The Effect of Transportation, Location and Affordability Related Sustainability Features on Mortgage Default Prediction and Risk in Multifamily Rental Housing,” assesses the relationship between particular sustainability features and default risk in multifamily housing. The paper focuses on sustainability features that affect affordability, walkability, automobile dependency, exposure to pollution and proximity to protected open space. The study says sustainability features should be given greater consideration in the loan origination process and that sustainability features in the study may be used to improve the prediction of mortgage default. A copy of the study can be found at www.fanniemae.com.

***

The Affordable Housing Investors Council (AHIC) introduced a new tool designed to evaluate the strength of LIHTC syndicators. AHIC says the Syndicator Analysis Guidelines will help an investor assess a new or ongoing business relationship with a syndicator by examining its ability to provide investments, sound underwriting and asset management services during the 15-year compliance period. The tool includes templates that offer a framework for delving into a firm’s staff resources, geographic and developer concentration, financial sustainability and prior fund performance. The Syndicator Analysis Guidelines are available at www.ahic.org.

***

The National Apartment Association (NAA) and the National Multi Housing Council (NMHC) partnered to present testimony to Congress on behalf of the apartment industry. Tom Bozzuto, chairman and CEO of the Bozzuto Group, represented both organizations before the House Energy and Commerce Subcommittee on June 4. In his testimony, Bozzuto said that the apartment industry is a competitive $1.1 trillion industry that helps 35 million renters live in homes that are right for them. The full NMHC/NAA testimony is available at www.nmhc.org..

***

STATE BRIEFS

The Internal Revenue Service (IRS) released Notices 2013-39 and 2013-40 suspending certain requirements for qualified residential rental projects in Oklahoma that are financed with tax-exempt facility bonds. The suspension will provide emergency housing relief needed as a result of the severe storms and tornadoes in Oklahoma that occurred between May 8, 2013 and May 27, 2013. Notice 2013-39 suspends requirements for rental projects under Internal Revenue Code (IRC) section 142(d), while Notice 2013-40 suspends requirements under section 42. Both notices were effective May 20, 2013 and can be found online at www.taxcredithousing.com.

***

Minnesota Housing posted its 2014-2015 budget and consolidated request for proposals (RFP) funding amounts online, with $100 million available. For the 2013 consolidated RFP, the housing and job growth initiative will have $10 million available, $12 million in tax credits will be available and the housing trust fund will have up to eight project-based vouchers available. Applications for the 2013 multifamily RFP and the 2014 housing tax credit round 1 applications are due June 18 at 5 p.m., and the 2013 single family RFP applications are due July 11 at noon.

***

The Illinois Housing Development Authority (IHDA) celebrated the groundbreaking of a new development in Sterling in June. Country Lane Apartments will include 24 one-story residential duplex buildings featuring 48 family units, including a mix of one-, two- and three-bedroom apartments. Five housing units will be available for people with disabilities. A community building, a gazebo and a playground will be available to residents. IHDA provided $1.4 million through the federal HOME Investment Partnerships Program, and $1.3 million in Illinois Affordable Housing Trust Fund resources. More than $6.5 million in private equity was also provided through federal LIHTCs. IHDA expects approximately 58 construction jobs will be created and approximately $3.8 million in retail sales, real estate taxes and other local expenditures will result from the property’s construction. The development is anticipated to be complete by December.

***

Three new members joined the Ohio Housing Finance Agency (OHFA) board in May after being appointed by Gov. John R. Kasich. Gregory Arcaro, CEO of Frontier Community Services; Robert Alexander, senior vice president in the special assets capital recovery group of Integra Bank’s commercial real estate division; and Andre Porter, director of the Ohio Department of Commerce are now members of the OHFA board. The board also approved $2.7 million in funding through the Housing Development Assistance program (HDAP) Oakdale Estates in West Union, Abington Flats in Cincinnati, Columbus place in Xenia, Gallia Meigs Affordable Homes in Gallia and Meigs Counties, McArthur Senior Living Apartments in McArthur, and NHSGC South Euclid Land Trust Homes in South Euclid. .

***

DEALMAKERS

Salinas, Calif. will see 46 new energy-efficient affordable units in 2014. The groundbreaking was held in May for 2 Haciendas Place, which is the second part of a multi-phase project. The units will be available to residents earning up to 60 percent of the area median income (AMI). When complete, the multi-phase development will have 160 new units, a community room, a picnic area, playground and laundry room. The development will cost approximately $18 million and is being developed by the Monterey County Housing Authority Development Corporation, and is funded through tax credit equity, permanent loan, city deferred impact & processing fees, city HOME funds, housing development corporation (HDC) seller financing and HDC funds.

***

Lancaster Pollard aided Lucky Lindy Development Corporation with the refinance of Porter Plaza. The affordable rental housing property in Houston, Texas includes a 50-unit family apartment complex, consisting of eight two-story buildings and one accessory building. The development, constructed with LIHTC equity, was approaching the end of its 15-year compliance period. Lancaster Pollard worked closely with Lucky Lindy and HUD to follow the regulatory requirements and secure a $1.4 million loan insured by the Federal Housing Administration (FHA) Sec. 223(f) program. The new loan reduced Lucky Lindy’s interest rate by 6.2 percent and provides a 35-year term. The refinance will provide for more than $150,000 in owner-elected repairs.

***

City Real Estate Advisors (CREA) announced the closing of CREA Corporate Tax Credit Fund XXXII. A total of $73.2 million in capital was raised from eight investors. The fund offered three investments classes of premium (7.35 percent), class A1 (7.25 percent) and Class A2 (7.05 percent). The fund includes 16 properties located in 11 states.

***

Chelsea Investment Corporation is receiving funding from U.S. Bank for the Fairbanks Commons Apartments in San Diego, Calif. Twenty-three million in LIHTC equity will go to the development of this property. The third phase of four planned housing developments, Fairbanks Commons Apartments, is located in the Del Sur community, is the third of four planned housing phases. Fairbanks Commons will have 165 units with 13 buildings. There will be a mix of one-, two- and three-bedroom units. A central common courtyard and a swimming pool will also be on the property. The units are available to residents earning 50 percent to 60 percent of area median income. Construction is expected to be completed in early 2014.

***

Dominium acquired and renovated Somerset Properties, providing 144 units of affordable housing in Willmar, Minn. The Somerset Properties, built in 2002, includes 144 units spread across three sites. Dominium, a development and management company, anticipates renovating countertops, cabinets, major appliances and carpet and flooring. Units are also expected to receive a new commons space including new lighting and flooring. Amenities will also include a clubhouse with a community room and fitness room. Renovations are expected to be completed by October.

***

Pembrook Capital Management LLC’s PCI Investors Fund II LLC closed in April with an estimated $154 million in capital commitments. Limited partners in the fund include pension funds and national, regional and community banks. Pembrook is a commercial real estate investment manager, with investments focusing on financing for multifamily development and renovation projects as well as transitional retail, office and industrial properties.

***

PEOPLE IN THE INDUSTRY

BRIDGE Housing hired Anna (Scott) Slaby as a senior project manager for its Southern California team based in Orange County, Calif. Slaby has more than 18 years of experience in real estate development, design, planning and financing, and will oversee the development of two BRIDGE properties, Sage Park in Los Angeles and Heritage Square in Pasadena. Previously, Slaby was senior project manager for Affirmed Housing Group, where she worked with supportive housing communities. Slaby received a B.S. in finance with an emphasis in real estate from San Diego State University.

***

Centerline Capital Group announced the addition of Jonathan D. Killough to the firm. A provider of real estate financial and asset management services, Centerline appointed Killough senior vice president in the affordable housing debt division. Killough’s responsibilities will include sourcing affordable housing debt opportunities with a focus on the Southeast region of the United States. Prior to working with Centerline, Killough was vice president at Rockport Mortgage Corporation where he worked with commercial real estate loans in the multifamily and affordable housing industries. Killough earned a B.S. in business administration with a focus on marketing and finance from Auburn University.