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Low-Income Housing Tax Credits News Briefs - July 2017

LIHTC Industry

Melvin L. Watt, director of the Federal Housing Finance Agency (FHFA), May 11 appeared before the U.S. Senate Committee on Banking, Housing and Urban Affairs to discuss the status of the housing finance system after nine years of conservatorship. He reviewed the FHFA’s statutory mandates to manage Fannie Mae’s and Freddie Mac’s (the Enterprises’) day-to-day operations and stated that these conservatorships are not sustainable and they need to end as soon as Congress can chart the way forward on housing finance reform. Watt highlighted important changes and reforms that have taken place during the conservatorships and said that FHFA must continue to meet its obligations while housing finance reform takes place. Watt closed by saying that the most significant challenge FHFA faces as conservator is that additional draws of taxpayer support would reduce the amount of taxpayer backing available to the Enterprises. He added that it would be a misconception for members of the committee to consider any actions that FHFA may take as conservator to avoid additional draws of taxpayer support as an effort to influence the outcome of housing finance reform or as a step toward recap and release. Watt concluded that the FHFA’s actions would be taken solely to avoid a draw during conservatorship. 

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The California Tax Credit Allocation Committee (CTCAC) released an update May 18 to its 2017 program schedule and deadlines. CTCAC updated the application deadlines for noncompetitive 4 percent tax-exempt bond financed applications seeking consideration at the Aug. 16, Oct. 18 and Nov. 15 meetings. The updated schedule is available at www.taxcredithousing.com.

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The NYU Furman Center released in mid-May a report on the Low-Income Housing Tax Credit (LIHTC) program. The report, “The Effects of the Low-Income Housing Tax Credit,” explores what is known about who the LIHTC serves and what research has shown about the impact of the program. Topics include research on the people the program houses, as well as research on the impacts of LIHTC development. The NYU Furman Center found that nearly half of tenants in LIHTC apartments are extremely low-income, with annual household incomes below the federal poverty level. The report stated that while the maximum allowable income to be considered eligible for a LIHTC unit is 60 percent of the area median income (AMI) for the metropolitan area, that nearly half of LIHTC households have annual incomes of less than 30 percent of the area median gross income (AMGI). The report also stated that new evidence suggests LIHTC development revitalizes low-income neighborhoods, with tenants living in LIHTC developments having access to slightly better schools than households receiving other forms of housing assistance. In addition, low-income housing development brings significant reductions in crime, according to the report. The report is available at www.taxcredithousing.com. 

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The Office of the Comptroller of the Currency (OCC) announced May 31 it will extend the notification period for Community Reinvestment Act (CRA) evaluations. Starting with the third quarter of this year, the OCC will post the list of financial institutions in which CRA evaluations are due for the next two quarters–a practice it began immediately. This change allows more time for parties to review and provide meaningful comments on a financial institution’s performance before a CRA examination. The OCC was previously required to publish a quarterly CRA evaluation schedule at least 30 days before the beginning of each quarter. In addition, the OCC released its schedule of CRA evaluations to be conducted in the third and fourth quarters of 2017. The OCC will consider all public comments received before the close of the CRA evaluation. The notice and evaluation schedule are available at www.occ.gov.

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The OCC released a list of CRA performance evaluations June 1 for national banks, federal savings associations and insured federal branches of foreign banks. Of the 18 evaluations made public in May, two rated as outstanding, and 16 rated as satisfactory. A list of May’s evaluations is at www.occ.gov.

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The Public and Affordable Housing Research Corporation (PAHRC) and HAI Group released its report, “How Sustainable Communities Create Resilient People–2017 PAHRC Report,” in early June. The report is the fourth annual publication and examines the ways in which housing can shape resiliency and boost sustainability for individuals and the communities in which they live. PAHRC found that investment in federal housing programs leverage dollars more effectively to promote economic mobility for low-income families, save money for communities and stimulate economic growth. In addition, the report indicated that providing more affordable housing, repairing current affordable housing properties and ending patterns of residential segregation increase the flow of money into a variety of local businesses, which in turn creates additional jobs. Improving energy efficiency could result in a savings of $9.4 billion dollars in utility costs during the life of energy efficiency improvements made to U.S. Department of Housing and Urban Development (HUD)-held rental housing stock, according to the report. Also, PAHRC found that federal housing programs help nearly 13 million people build resiliency to poverty and increasingly serve America’s working families and those that are unable to work due to age or disability. PAHRC’s goal for this publication is to further evidence-based conversation about the effectiveness of leveraging federal affordable housing investments to combat poverty and stimulate economic growth. 

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The AARP Public Policy Institute issued a fact sheet on the LIHTC program titled, “Low-Income Housing Tax Credits: Meeting the Demand for Affordable Rental Housing.” The document reports on the value of LIHTC to assist in housing for seniors. The Public Policy Institute provides background information on the LIHTC program and advocates for affordable senior housing, stating that as the population ages and some LIHTC properties approach the end of their 30-year affordability requirement, the program must consider ways to address the increasing need for affordable rental housing, particularly for older adults who overwhelmingly prefer to age and receive services in the community. Public Policy Institute stated that closing the affordable-rental gap should be a top policy priority and that Congress should also increase the annual allocation to meet the need for affordable rental housing. In addition, the fact sheet stated that states can also make structural modifications in the LIHTC program by incorporating meaningful requirements that address housing accessibility within qualified allocation plans. The report is available at www.taxcredithousing.com.

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Enterprise Community Partners released a new report June 6, “Public Benefit from Publicly Owned Parcels: Effective Practices in Affordable Housing Development.” The report identifies leading practices and recommendations for overcoming challenges to creating affordable housing and other community benefits through the publicly owned parcel development process. Enterprise states that the strategic development of publicly owned parcels of land can help communities increase access to well-designed, affordable homes and create anchors of revitalization. Michael Spotts, senior analyst and project manager at Enterprise, said in a press release that in struggling areas, publicly owned parcels offer an important opportunity to catalyze development and seed revitalization activities. The report offers recommendations for how to best address these challenges, including prioritizing community benefits such as affordable housing when developing publicly owned parcels, ensuring that there are a clearly defined, context-sensitive and reasonable set of goals and priorities for each site, being judicious in the application of infrastructure requirements for the site, with a focus on parking requirements and anticipating and addressing affordability impacts on surrounding neighborhoods.

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The Municipal Bonds for America (MBA) coalition issued May 24 a letter to the House Ways and Means Committee supporting tax-exempt bonds, including private activity bonds. Twelve state, local, investor and other MBA groups told committee members that the investments financed with the bonds have a proven track record to help the economy grow and create jobs. According to the letter, during the past decade, state and local governments made approximately $2 trillion in bond-financed infrastructure investments and are expected to invest $2 trillion to $3 trillion in infrastructure in the next decade. MBA stated that states and localities build nearly three-quarters of the nation’s core infrastructure, using tax-exempt bonds for most of the financing, and stressed that it is vital that tax reform not impose an unprecedented federal tax on these investments. The letter stated that  private activity bonds were also used to finance public-private projects, with approximately $8 billion used to finance transportation-related projects. In addition, another $6.7 billion was used for rental housing and $4.6 billion for affordable mortgages. The MBA groups told the committee that while alternatives to tax exempt bonds exist, each has substantial shortcomings, such as increased borrowing costs, added complexity and a lack of access for smaller issuers. The letter closed with MBA stating that public-private partnerships may supplement tax-exempt bonds, but these and other alternatives can’t replace them. The letter was sent after the start of tax reform hearings.

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The Affordable Housing Tax Credit Coalition announced the winners of the 23rd Annual Charles L. Edson Tax Credit Excellence Awards June 7. The awards celebrate leading LIHTC developments that create stronger, healthier communities in urban, suburban and rural areas nationwide. The winner for the metro/urban housing award was Alta Mira Senior and Family Apartments, in Hayward, Calif. The winner of the rural housing award was Sokaogon Supportive Services in Crandon, Wis. The winner of the special-needs housing award was The Arc Jacksonville Village in Jacksonville, Fla. The winner of the senior housing award was Reynoldstown Senior Residences in Atlanta. The winner of the green housing award was Cabrillo Gateway in Long Beach, Calif. The winner of the public housing award was Gloria Robinson Court Homes IV in Jersey City, N.J. The winner of the HUD preservation award was The Bronaugh Apartments in Portland, Ore. The winner of the veterans housing award was Blue Butterfly Village in Los Angeles. The awards were presented in Washington, D.C., June 7 at the Capitol Visitors Center.

LIHTC State

Connecticut Gov. Dannel P. Malloy announced May 8 nearly $10.7 million in LIHTC funding was approved to fund the development of seven affordable housing properties. The Connecticut Housing Finance Authority (CHFA) approved the LIHTCs. The seven properties will be located in six communities: Bridgeport, Hartford, Meriden, New Britain, New Haven and Windsor Locks. The developments will produce 578 apartments, with 401 designated as affordable. The remaining apartments will be available at market rate. A total of 964 jobs are expected to be created.

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Wisconsin Lt. Gov. Rebecca Kleefisch announced May 16 the award of more than $13.6 million in LIHTCs. The tax credits were distributed by the Wisconsin Housing and Economic Development Authority (WHEDA) and will aid the development of 26 properties. A total of 1,367 affordable rental apartments will be created. The properties will be located in Calumet, Dane, Dodge, Douglas, Grant, Iowa, Kenosha, La Crosse, Milwaukee Outagamie, Portage, Racine, Rock, Sauk, St. Croix, Winnebago and Wood counties. WHEDA received 43 applications requesting $25.5 million. The list of awards is available at www.taxcredithousing.com.

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The Tennessee Housing Development Agency (THDA) released a memo May 22 regarding multifamily program updates. The multifamily programs division announced that things are on track to introduce THOMAS, the agency’s new LIHTC software, Jan. 1, 2018. THDA also announced that the $210 million of multifamily tax-exempt bond authority available Jan. 10 has been entirely committed. THDA also shared information retrieved from equity pricing submitted. Pricing on new construction applications averaged $0.86 and pricing ranged from $0.83 to $0.93 while prices on acquisition rehabilitation applicants averaged $0.85 and pricing ranged from $0.84 to $0.86. In the 39 applications received, there were 29 new construction applications and 10 acquisition-rehabilitation applications. The memo is available at www.taxcredithousing.com. 

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The California Tax Credit Allocation Committee (CTCAC) issued guidance May 22 on behalf of the Division of the State Architect within the Department of General Services regarding compliance with California building code, chapter 11b. The chapter concerns CTCAC developments and the applicability of building code accessibility provisions to LIHTC developments. The guidance issued supersedes any answers or guidance CTCAC may have provided on this topic in the past. CTCAC’s accessibility requirements are independent of building code requirements and remain unchanged. Property owners must of course comply with the stricter of the two standards. The memo is available at www.taxcredithousing.com.

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The Oklahoma Housing Finance Agency (OHFA) board of trustees approved May 25 the 2017 affordable housing tax credit awards. Eleven developers received awards ranging from $1.5 million to $6.5 million. These amounts will be released over a 10-year period. A full list of awardees is available at www.taxcredithousing.com.

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The California Tax Credit Allocation Committee (CTCAC) released June 7 an update to the 2017 LIHTC estimates. CTCAC added a note to the credit estimates regarding a pending first-round application and the effect it would have on the amount of state credits available in the second round for tax-exempt bond financed developments. If recommended and approved by the Committee, the 2017 first-round final approved recommendations for tax-exempt bond financed developments would be increased from $12.6 million to $14.4 million. This would result in the remaining balance of the state credit available in 2017 second round for tax-exempt bond financed developments being decreased from $1.8 million to $66,924. CTCAC said it would inform program users via ListServ of the recommendation status before the June 28 second-round competitive application deadline. The updated estimates are available at www.taxcredithousing.com.

LIHTC Dealmaker

The grand opening of Marea Alta and groundbreaking of San Leandro Senior Apartments were held May 17. The two-phase, transit-oriented development is across from the San Leandro Bay Area Rapid Transit (BART) station in San Leandro, Calif. Marea Alta includes 115 rental apartments affordable to households earning 30 to 60 percent of area median income (AMI). There is a child care center and more than 240 parking spaces for BART transit patrons. San Leandro Senior Apartments is the second phase of development and will provide 85 affordable apartment homes for seniors earning up to 30 to 50 percent of the AMI. Developer BRIDGE Housing will partner with Episcopal Senior Communities to provide services to the residents. San Leandro Senior Apartments is expected to be completed in early 2018. The California Department of Housing and Community Development, the city of San Leandro and the Federal Home Loan Bank of San Francisco provided funding for both developments. Wells Fargo NA was the financial partner for Marea Alta, while the Housing Authority of the County of Alameda, Alameda County Community Development Agency and U.S. Bank were financial partners for San Leandro Senior Apartments. The development of Marea Alta was funded with $10.9 million in LIHTC allocations, and the development of San Leandro Senior Apartments was funded with $16.6 million in LIHTC allocations.

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WNC, an investor in real estate and community development initiatives, announced May 15 the completed renovation of Southern Oaks Apartments in Celina, Tenn. WNC provided approximately $3.1 million in LIHTC equity to fund the rehabilitation. Developed by CMS Real Estate Development LLC, Southern Oaks Apartments consists of of eight resident buildings and a clubhouse. Amenities include a laundry facility, a computer center, a playground and a picnic area. Apartments are available to families earning between 50 percent and 60 percent of the AMI.

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The Massachusetts Housing Finance Agency (MassHousing) announced $21 million in bridge loan financing May 16 for the preservation and renovation of Maple Commons Apartments in Springfield, Mass. MassHousing provided the financing to an affiliate of First Resource Companies, which will perform extensive property renovations and safety improvements at the property. These renovations will include building envelope repairs, window replacement, roof replacement, boiler replacement, HVAC upgrades and upgrades on the 173 apartments. First Resource Companies will also install a state-of-the-art security system. In addition to MassHousing’s financing, the Massachusetts Department of Housing and Community Development (DHCD) allocated $35 million in state and federal LIHTCs to the development of Maple Commons. Federal historic tax credits (HTCs) and HOME financing from HUD were also provided. Maple Commons Apartments are in 11 buildings, comprising 102 one-, 63 two-bedroom and eight three-bedroom apartments. All 173 apartments at Maple Commons are covered by a federal Section 8 Housing Assistance Payment (HAP) contract through 2021.

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Alden Capital Partners announced May 23 the closing of a $100 million national LIHTC fund. Alden Capital Partners Tax Credit Fund 24 LP (ACP 24) will provide equity to finance the rehabilitation and new construction of 14 housing developments, as well as the conversion of a historic warehouse into affordable housing. More than 2,000 apartments will be created or rehabilitated, with more than 500 apartments reserved for seniors and 50 apartments reserved for the homeless. ACP 24 closed in April 2017 with six financial institutions participating as investor partners. 

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WinnCompanies, a national multifamily development and management company, joined Greater Bergen Community Action (GBCA) to celebrate May 22 the completion of a $40.2 million rehabilitation in Jersey City, N.J. City Crossing is a townhouse-style complex featuring 18 buildings with 131 three-, four- and five-bedroom apartments. The New Jersey Housing and Mortgage Finance Agency (NJHMFA) awarded the redevelopment 4 percent LIHTCs that will generate approximately $13.2 million in private equity. NJHMFA also provided a more than $27 million construction loan and permanent conduit bond financing. Formerly Brunswick Estates, the property underwent a 15-month renovation. WinnCompanies created new community space, addressed substantial deferred maintenance needs–including damage from Hurricane Sandy and ADA compliance issues–overhauled the kitchens, bathrooms and interiors of all apartments and repaired and resurfaced the exteriors of all the buildings on the property. In addition, GBCA will provide services focused on workforce development and employment opportunities, along with early childhood and family development programs through Head Start.

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CDS Housing announced May 12 a combined $31.4 million from New York Homes and Community Renewal for the development of two senior living communities in New York. CDS received $19.5 million in state funding to construct 96 affordable apartments in Webster, as well as $11.9 million to construct 50 affordable apartments in Elmira. The Webster facility will provide 82 one- and 14 two-bedroom apartments, with 15 apartments reserved for frail elderly. In addition, Warrior Salute Veteran Services will provide on-site programs and services for veteran residents. The Elmira facility will have 50 one-bedroom apartments, reserved for seniors aged 55 older, and the remaining 10 apartments are reserved for people with intellectual and developmental disabilities. AIM Independent Living Center will provide on-site support services, including Medicaid service coordination, individualized planning and health education programming. Funding for the construction of the Webster facility includes $3.8 million in Housing Trust Funds, $1.2 million in LIHTCs and $355,197 in New York State LIHTCs from New York State Homes and Community Renewal (HCR), as well as $200,000 from the Monroe County HOME program and $150,000 from the CDS Wolf Foundation. Funding for the Elmira facility includes $2 million in Housing Trust Funds and $865,000 in LIHTCs from HCR, as well as $1.2 million from state Office for People with Developmental Disabilities and $75,000 from the CDS Wolf Foundation.

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MassHousing announced $9.3 million in financing awarded to the nonprofit Retirement Housing Foundation (RHF) May 30 for the preservation and renovation of Binnall House in Gardner, Mass. Binnall House provides 134 apartments to senior citizens and residents with disabilities. Binnall House is an eight-story building that comprises 118 one- and 16 two-bedroom apartments for residents 62 and over. Planned renovations include building and room upgrades as well as accessibility improvements. RHF used $6 million in LIHTC equity for renovations of the property. The transaction for the Binnall House refinancing was conducted through the Federal Housing Administration’s (FHA’s) Housing Tax Credit Pilot program. In addition, MassHousing refinanced Binnall House through the Agency’s Multifamily Accelerated Processing (MAP)/Ginnie Mae Joint Venture Initiative.

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The ribbon-cutting ceremony for the Huntington Gardens Apartments was May 10. The senior apartment community in Huntington, Va., is made up of townhouses with 40 apartments available to seniors aged 62 and older. Huntington Garden Apartments replaces the Northcott Court public housing complex, which opened in 1940. The cost of rehabilitation was $6.5 million, with financing including approximately $5 million in LIHTCs and funds from the HOME Investment Partnership program and the Huntington Housing Authority. Other financing partners included United Bank, the West Virginia Housing Development Fund, the Cabell-Huntington-Wayne Housing Consortium and the Housing Development Corporation Partners.

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The Wisconsin Housing and Economic Development Authority (WHEDA) awarded $4.9 million in LIHTCs to the Walnut Street Flats. The LIHTCs for the Reedsburg, Wis., property were awarded in late May. Walnut Street Flats is a three-story development that will provide one-, two- and three-bedroom apartments. Construction costs are expected to be $6.3 million. WHEDA received 43 LIHTC applications requesting $25 million. A total of 26 developments received $13.6 million in credits.

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KeyBank’s Community Development Lending & Investment (CDLI) team announced May 31 that it will provide $16.3 million in financing to Christopher Community Inc. for the construction of Harborbrook Apartments. KeyBank will provide a $7.3 million construction loan and up to $9 million in LIHTC equity. The mixed-income senior housing development in Geddes, N.Y., will feature 60 apartments for seniors 55 and older earning 30 percent, 50 percent or 70 percent AMI. Of those apartments, 20 will be set aside for individuals with disabilities and three apartments will be set aside for individuals with hearing or visual impairments. The Centers at St. Camillus will provide rental assistance and subsidize supportive services to seniors making 30 percent of the AMI. Additional financing will be provided by the NYS Supportive Housing Initiatives program, the NYS Middle Income Housing program and the NYS Energy Research and Development program.

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The Federal Home Loan Bank of Chicago (FHLBC) announced June 1 that Cinnaire was named a Community First Fund (CFF) partner. The community development financial institution and member of the FHLBC received a $3 million, 10-year loan. The CFF is a $50 million revolving loan fund that provides direct support to non-depository CDFIs, community development loan funds and state housing finance agencies in Illinois and Wisconsin. Katey Forth, Cinnaire lending president, said in a press release that “the Community First Fund partnership will strengthen [Cinnaire’s] ability to drive economic development in these communities, creating jobs, supporting affordable housing and serving individuals by providing access to education, job opportunities and the arts.”

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The grand opening of Sacred Heart Residences in Allentown, Pa., was June 5. Nearly $11.2 million in LIHTC equity was awarded to the development by the Pennsylvania Housing Finance Agency. The development provides 61 one- and two-bedroom affordable apartment homes available to seniors 62 and older earning between 20 and 60 percent of the AMI. The first floor includes 6,000 square feet of space that will be used by Sacred Heart Hospital for geriatric, physical therapy and other senior focused medical functions. The services will be available to both building residents and the public. Amenities include a community room with a kitchen, a fitness room, game room, library, a lobby lounge, common laundry rooms and a roof terrace. Development costs were $14.6 million. Sacred Heart Residences was developed in collaboration with Sacred Heart Hospital. 

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The Woda Group Inc. announced June 6 the adaptive reuse of Willow Commons, an affordable senior housing complex in Erie, Pa. Willow Commons will occupy the former The Wesleyville Public School, which was built in the 1920s. The three-story building is situated on a 2.5-acre parcel. There will be 29 one- and 16 two-bedroom apartments, for seniors 62 and older earning below 60 percent of the AMI. Of those 45 apartments, six will be fully accessible and one additional apartment will be reserved for hearing/vision impaired residents. Amenities will include a community room with kitchen, a common laundry, a library/craft room and an exercise room. In addition, there will be full-time on-site property management and maintenance and a service coordinator/visiting nurse to assist residents as needed. The $9.5 million development was financed with the allocation of $7.5 million in LIHTCs and a $1.1 million PennHOMES loan from the Pennsylvania Housing Finance Agency. In addition, $228,643 was contributed through the Pittsburgh Federal Home Loan Bank’s Affordable Housing Program (AHP). Construction is scheduled to be completed this fall.

LIHTC People

The California Debt Limit Allocation Committee (CDLAC) appointed Jeree Glasser-Hedrick as deputy treasurer for retirement security and housing policy April 26. As deputy treasurer, Glasser-Hedrick will oversee finances for the CDLAC and the California Tax Credit Allocation Committee (CTCAC). Before joining the Treasurer’s office, she worked at HUD as a presidential management fellow. She later joined the Sacramento Housing and Redevelopment Agency. Glasser-Hedrick served as executive director of CDLAC and in the interim, Geoff Palmertree will assume this role. 

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Hunt Mortgage Group announced the hiring of Matthew Frank to oversee the newly opened Phoenix production office May 15. Frank was named vice president in Hunt Mortgage Group’s small balance loan group. Before joining Hunt, Frank was a commercial loan officer at AlaskaUSA Federal Credit Union, and before that he was vice president, commercial lending at Unison Bank. Frank has also held positions with Unum Group, Infinity Software Solutions and Union Bank of California.

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BRIDGE Housing announced May 24 that Chuck Weinstock was elected to the board of directors. Weinstock retired from JPMorgan Chase Bank, where he had served as vice president/senior banker-community development banking since 2007. Before working at Chase, he was the executive director of Capitol Hill Housing. Weinstock has also held positions at Common Ground, the Neighborhood Reinvestment Corporation, the Fremont Public Association and was director of community sponsored projects for the Office of the Mayor of Philadelphia. Weinstock’s board affiliations have included board chairman of the Housing Development Consortium and chairman of the Seattle Planning Commission. He was also a governor-appointed member of the Affordable Housing Advisory Board of Washington state.

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Love Funding announced June 5 the hiring of Brad Tucker as a director of loan originations. Tucker will work out of the Overland Park, Kan., office. Before joining Love Funding, he was a Federal Housing Administration (FHA) originator at Berkadia, and more recently at NorthMarq Capital. He also underwrote FHA transactions at Grandbridge Real Estate Capital, worked as an analyst and underwriter for Key Bank and was an asset manager for Cohen Financial. 

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Hunt Mortgage Group announced June 6 the appointment of Misty Read as director. She will be responsible for originating small balance and conventional agency business as well as placing Hunt Mortgage Group’s proprietary products in the Midwest. Read will operate out of the firm’s New York office. Read joined Hunt from after serving as regional sales director and vice president at EverBank Commercial Real Estate. Before EverBank, Read was a national sales manager and senior vice president at Pipeline Medical, and before that, she was regional sales director, vice president at Indymac Commercial Lending Corporation.

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Pennrose announced June 8 the addition of Jill Sommer Lesher as vice president of asset management. Lesher will lead the processes of maximizing the financial performance and increasing the value of the Pennrose portfolio, as well as lead the organization’s activities related to monitoring the physical and financial condition of Pennrose assets and properties. Before joining Pennrose, Lesher most recently served as vice president, asset management for Resource Real Estate. She is a member of the Delaware Valley Green Building Council and is a LEED AP with a concentration in existing buildings. 

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Low-Income Housing Tax Credits

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