Low-Income Housing Tax Credits News Briefs - July 2015

Wednesday, July 1, 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

On May 21, Sens. Al Franken, D-Minn., and Rob Portman, R-Ohio, introduced the Housing for Homeless Students Act of 2015 (S. 1412). The bipartisan bill would expand the eligibility criteria of the low-income housing tax credit (LIHTC) program to allow certain full-time students, including veterans, to qualify for affordable rental housing funded through the LIHTC program. S. 1412 would allow homeless or previously homeless full-time students who would otherwise qualify to live in LIHTC units to become eligible for low-income housing while they attend school full-time. Sen. Franken said in a press release that young people and veterans should not be forced to choose between housing and pursuing their education. The Housing for Homeless Students Act of 2015 is available at www.taxcredithousing.com.

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On May 26, The National Council of State Housing Agencies (NCSHA) announced plans to submit comments to the Federal Reserve System (Fed) regarding the Fed’s proposed final rule released October 2014. The proposed rule would allow large banks to count some of their municipal bond investments as high-quality liquid assets. NCSHA would request that the Fed also classify private activity bonds, including housing bonds, as high-quality liquidity assets. Comments are being accepted for its proposed rule until July 24.

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On May 19, the National Low-Income Housing Coalition (NLIHC) released its report, “Out of Reach 2015.” Results of the report concluded that the hourly wage a person working 40 hours a week would need to earn in order to afford a modest, two-bedroom rental unit is $19.35 and $15.16 for a one-bedroom unit. This is 2.7 times the federal minimum wage. According to the report, there is no state in the United States where a minimum wage worker working full-time can afford a one-bedroom apartment at fair market rent. NLIHC says the report highlights the need for affordable housing in every state, metropolitan area and county throughout the United States. This year, NLIHC enhanced the report by launching a new interactive Out of Reach website. The site features charts, infographics and maps, as well as the ability to compare data across jurisdictions. Out of Reach 2015 is available at www.nlihc.org/oor.

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On May 27, BRIDGE Housing announced it received an A+ issuer credit rating from Standard & Poor’s Rating Services. The nonprofit developer, owner and manager of affordable housing pursued the rating as part of a five-year initiative to double its production of affordable and mixed-income housing. Standard & Poor stated in the rating report that the A+ rating was given due to strong overall management, coupled with a strategic plan that supports BRIDGE’s mission to provide quality low-income housing in the least-affordable markets. The effective strategic planning that has led to a growing and diverse portfolio of attractive housing units in multiple regions along the West Coast also played a role. Cynthia A. Parker, president and chief executive officer of BRIDGE Housing, said in a press release the A+ rating validates the stability and solid business model that BRIDGE Housing demonstrated to investors and lenders for more than 30 years

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On June 3, Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced the acquisition of Capital Advisors Inc., a privately held, full-service mortgage banking firm. The acquisition will add more than $1 billion in annual loan volume, and $1.75 billion in servicing to Bellwether Enterprise. This is projected to bring the firm’s total annual loan volume to more than $4.5 billion and its servicing portfolio to $10.2 billion. Principals of Capital Advisors Inc. will receive an equity stake in Bellwether Enterprise, and Capital Advisors’ 31 current employees will be retained. The transaction is subject to Bellwether Enterprise and Enterprise Community Investment Inc. board approval. At press time, the acquisition was expected to close on or about June 30.

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Hunt Mortgage Group announced May 27 the opening of a new office in Fort Lauderdale, Fla. The commercial real estate lender hired Bill Papagno as director to spearhead efforts in the new office. He will focus on sourcing and originating small balance loans under the Freddie Mac Small Balance Loan program. Papagno previously worked at Marcus & Millichap as senior director. Before that, he was with Washington Mutual Bank as a senior loan consultant.

STATE BRIEFS

Texas H.B. 3576 was sent to the governor for approval May 30. The bill amends a 1997 law designed to establish incentives for LIHTC program applicants. H.B. 3576 allows owners to transfer the development to a new entity without triggering the right of first refusal if the new entity is under common control with the current development owner, and the purpose of the transfer is to finance rehabilitation using assistance administered through a state financing program. In addition, the time period for the right of first refusal has been reduced from two years to six months in three 60-day increments. The bill specifically states that there is no intention to modify any existing right of first refusal agreement between an owner and an intended recipient. If passed, the bill would be effective Sept. 1. The Texas House and Senate both approved the bill. H.B. 3576 is available at www.taxcredithousing.com.

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The California Tax Credit Allocation Committee (CTCAC) issued a memo May 7 providing clarification regarding redevelopment agency (RDA)-related application requirements. CTCAC explains the definition of RDA funds and also to further clarify when a final and conclusive determination letter (FCD) or other written communication from the Department of Finance (DOF) is necessary for CTCAC Application review purposes. RDA funds include assets transferred to a successor housing agency after the dissolution of RDAs. These assets include existing loans or land, among other resources. The memo is available at www.taxcredithousing.com.

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The Oklahoma Housing Finance Agency (OHFA) announced May 22 the 2015 first-round LIHTC awardees. Allocations ranged from $106,449 for Hugo Affordable Housing III to $730,497 for Northwinds Estates II for federal LIHTCs, and $106,449 for Hugo Affordable Housing III to $470,577 for Forestridge Heights for state LIHTCs. The complete list is available at www.taxcredithousing.com.

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The Colorado Housing and Finance Authority (CHFA) and the Department of Local Affairs Division of Housing (DOLA-DOH) announced May 19 the awarding of $7.2 million in federal LIHTCs for the construction of nine developments with 1,035 new affordable rental units. Funding also included $24.7 million in Community Development Block Grant-Disaster Recovery (CDBG-DR) funds and $8.3 million in state LIHTCs. The units will be constructed in areas most impacted by the 2013 floods, specifically Boulder, Larimer and Weld counties. The nine developments are expected to yield $450 million in economic impact and support more than 2,000 temporary and 350 permanent jobs.

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May 14, 2015 Pennsylvania Gov. Tom Wolf announced $36.9 million in LIHTCs and $12.5 million in PennHOMES funding for the new construction and preservation of 39 affordable multifamily properties throughout the state. These 39 properties will provide 1,864 affordable rental housing units. Awards ranged from $354,522 to $1.675 million for LIHTCs and $481,773 to $1.862 million in PennHOMES funding. The complete list is available at www.taxcredithousing.com.

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The Georgia Department of Community Affairs (DCA) announced April 21 the 2015 Tax Credit Update: Paperless LIHTC Application Pilot. DCA will accept paperless, electronic LIHTC applications for the 2015 funding round. The same requirements for the paper document will remain in place for the electronic submission. Applicants must submit their application on a thumb drive by the application submission deadline, and DCA will rely on the contents of the submitted thumb drive as the accurate and complete application submission. DCA will still require one executed original paper version of the application certification letter, 2015 submission form and the application fee calculation worksheet.

 

DEALMAKERS

Boston Capital announced June 3 an investment in the construction of Tri-Town Landing, Phase III. The 32-unit low-income housing tax credit (LIHTC)-funded affordable apartment community in Lunenburg, Mass., will be available to individuals and families earning 60 percent or less of the area median income (AMI), as well as eight families whose incomes are at or below 30 percent. Tri-Town Landing, Phase III is part of a master 9.23-acre development, which includes the 66-unit Tri-Town Landing, Phase I and the 33-unit Tri-Town Landing, Phase II. Amenities for the apartment community will include a fitness center, a community room with a kitchenette and a playground. The construction of Tri-Town Landing is expected to yield $3.5 million in local salaries and create approximately 36 new jobs.

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On June 3, WNC, a national investor in real estate and community development initiatives, announced that its subsidiary, Community Preservation Partners LLC, acquired Northgate Terrace. Rehabilitation of the 201-unit affordable senior housing community in Oakland, Calif., is part of a joint venture with Related Affordable LLC. The joint venture will provide approximately $10.5 million in financing to help rehabilitate the property. WNC will provide more than $15 million in LIHTC equity. The remaining costs will be funded with a permanent loan through Citi Bank. Acquisition and renovation costs are expected to total nearly $47 million. Renovations made to the 11-story high-rise will include but are not limited to a new façade, seismic upgrades, a new community room, medical exam space and a computer area and gym. Other amenities that will be improved include group lounges, a television and library room and a clubhouse.

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On May 15, Dominium, an apartment development and management company, announced the closing on two properties. Dominium acquired Ashton Pointe Townhomes Homes in Batavia, Ohio, and Country Lake Townhomes in Goshen, Ohio. Ashton Pointe Townhomes will be renamed Olive Branch Townhomes. The property will provide 176 units. Dominium will perform more than $1 million in capital improvements and deferred maintenance. This will include improvements to the clubhouse, landscaping upgrades, new site signs and parking lot repairs. Country Lake Townhomes will be renamed MeadowView Townhomes. The property will provide 128 units. Dominium will be investing approximately $750,000 for upgrades to the property, including exterior renovations, as well as conducting in-unit amenity upgrades.

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A 60,000-square-foot building in Pottstown, Pa., formerly known as the Leibowitz Shirt Factory, will be rehabilitated to provide 43 apartments marketed to artists thanks to $1.16 million in state LIHTCs. The LIHTCs will be applied over a 10-year period for a total of $11.6 million from the Pennsylvania Housing Finance Agency (PHFA). The four-story building will be renamed Beech Street Factory, and will also be home to ArtFusion 19464, a nonprofit art center. There will be one-, two-, and three-bedroom apartments. Amenities will include a community room/gallery space and a computer lab.

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On June 9, Community Housing Partners (CHP) and Spartanburg Housing Authority (SHA) held a groundbreaking ceremony for Highland Crossing Apartments, formerly Cammie Clagett Courts, in Spartanburg, S.C. Highland Crossing will include 72 Section 8 apartments and will be renovated with $750,000 in LIHTCs. Additional funding was provided through the U.S. Department of Housing and Urban Development’s (HUD) Rental Assistance Demonstration (RAD) program. Units will be available to households earning up to 60 percent of AMI.

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Pennrose Properties announced May 21 $1.14 million in a LIHTC allocation from the Pennsylvania Housing Finance Agency (PHFA) for the development of Sacred Heart Hospital campus in Allentown, Pa. Sacred Heart Residences will provide 61 affordable senior housing apartments. The units will be constructed above 6,000 square feet of commercial space housing medical services. There will be one- and two-bedroom apartments and the units will be age-restricted to residents 62 years and older.

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Housing Development Corporation MidAtlantic developer held the groundbreaking for phase I of the redevelopment of The Flats, an affordable housing community in Wilmington, Del. Phase I will be funded with $1.03 million in LIHTCs and will provide 72 units to individuals earning 30 to 60 percent of the AMI. Of these units, 15 will be ADA accessible. Redevelopment costs are expected to be $15.8 million.

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On June 4, Beacon Interfaith Housing Collaborative announced the beginning of rehabilitation for the historic Stevens Square apartments in Minneapolis. UnitedHealth Group provided $1.9 million in LIHTC equity for the transformation of the 100-year-old property into a 19-unit affordable housing community with support services for area homeless and people in need of permanent housing. Additional financing includes a $423,523 loan from the city of Minneapolis; a $225,000 loan and $64,000 grant from Hennepin County; and $75,000 from Plymouth Congregational Church and Westminster Presbyterian Church. Minnesota Housing Finance Agency (MHFA) will also provide a $645,445 loan. The property will be renamed The Lonoke, and renovation plans include updating the 19 existing one-bedroom apartments with upgraded mechanical, electrical and plumbing systems, new kitchens and baths, common-area upgrades and improvements and new roofing. Of the 19 units, 10 will offer supportive services for people who have experienced long-term homelessness, and the remaining units will be available for individuals earning between 30 percent and 50 percent of AMI. Renovation costs will total $3.38 million.

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On May 14, the Wyoming Community Development Authority (WCDA) board of directors approved a $580,850 LIHTC allocation for Sage Valley Apartments, an affordable housing development in Gillette, Wyo. Financing will go toward the construction of 53 multifamily units, which will be available to residents earning up to 60 percent of the AMI.

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On May 12, Sutton Real Estate Co. announced $567,676 in LIHTCs and $2.2 million in historic tax credit (HTC) financing for the redevelopment of Harbor Street Lofts in Syracuse, N.Y. The former textile factory is listed on the National Register of Historic Places and will be converted into 40 loft apartments, 35 of which will be reserved for low- and moderate-income residents. Of these 40 units, 33 will be one-bedroom units and seven will be two-bedroom units. Amenities include a community room and a computer room. Redevelopment costs are expected to total $10.84 million.

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On May 14, developer LHP announced $656,000 in LIHTCs provided by the Tennessee Housing Development Agency for the renovation of Mountain View Apartments in Bristol, Tenn. The LIHTCs will aid LHP in rehabilitating the 93 Section 8 units that comprise the affordable housing property. Renovation plans include the construction of a new playground, an improved leasing office and community-computer room.

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On May 20, WNC announced the closing of WNC Institutional Tax Credit Fund 40 LP (WNC Corp. 40). The $126.8 million institutional LIHTC fund consists of 17 properties with nearly 1,500 units. The properties are located in 12 states, California, Colorado, Iowa, Kansas, Louisiana, Massachusetts, Minnesota, Oklahoma, New Mexico, New York, Tennessee and Washington, as well as the U.S. Virgin Islands. WNC Corp. 40 has a mix of affordable housing communities, with 13 family housing properties and four senior housing properties. The properties represent approximately 450 new affordable housing units and nearly 1,000 existing affordable housing units that will be preserved.

 

PEOPLE IN THE INDUSTRY

Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced that it expanded its affordable housing group to include four new team members as senior vice presidents. The new members are Suzie Cope, Jim Gillespie, Cindy Hannon and Jon Killough. The affordable housing group leverages Bellwether Enterprise’s national lending platform to provide flexible financing resources to affordable, multifamily clients across the United States.

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BRIDGE Housing appointed Whitney Weller as senior vice president, effective mid-June. This was a newly created role, and Weller will be responsible for leading staff in the overall redevelopment of two large-scale, mixed-income, mixed-use revitalization efforts: the Jordan Downs in Los Angeles and Potrero Terrace and Annex in San Francisco. Before joining BRIDGE Housing, Weller was senior vice president of The Michaels Development Company. Before that, she completed a two-year Community Builder Fellowship at the U.S. Department of Housing and Urban Development (HUD), and then became a HOPE VI Specialist responsible for all HOPE VI and mixed-finance public housing developments in Chicago.

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KeyBank Real Estate Capital announced the appointment of Robert Likes to national manager of community development lending and investment April 30. Likes will spearhead the national expansion of KeyBank’s affordable housing platform. He has been with the KeyBank for the past 12 years. Prior to this appointment, Likes was head of the northwest income property group at KeyBank Real Estate Capital.

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On May 20, the Obama administration announced that Michael Stegman will join the national Economic Council (NEC) as the White House’s top advisor on housing policy. Before accepting this role, Stegman served as counselor to the secretary for housing finance policy at the Treasury Department. Stegman replaces Seth Wheeler, who was with the NEC for two years and who also worked for the Treasury Department as well as the Federal Reserve.