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Low-Income Housing Tax Credits News Briefs - June 2010

AFFORDABLE HOUSING INDUSTRY

A report from the National Low Income Housing Coalition (NLIHC) concluded that the recession has worsened an already severe housing crisis. Released in April, "Out of Reach 2010" calculated the amount a full-time worker must earn to afford the fair market rent (FMR) on a two-bedroom unit for every state, metropolitan and non-metropolitan area, and county in the country. The report found that a family needs to earn $18.44 an hour to afford a modest rental home, while the estimated average wage for renters in 2010 is $14.44. Another key finding is that the average household earning the federal minimum wage of $7.25 an hour must work 102 hours a week to afford the nation's average FMR of $959 for a two-bedroom home. The collected data for each area and the report are available at www.nlihc.org/oor2010.

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The Federal Housing Finance Agency (FHFA) announced a final rule that expands from three to 17 members the number of directors on the board of the Federal Home Loan Bank's (FHLB) Office of Finance. The restructured board will be composed of the president of each of the 12 FHLBs, along with five independent directors who will serve as the Office of Finance's audit committee. The rule, effective June 2, gives the audit committee increased authority over the form and content of the information that the FHLBs provide to the Office of Finance for use in the combined financial reports.

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Fannie Mae announced its top 10 loan originators of multifamily debt financing in 2009. Listed in descending order, the following lenders produced the highest volume by contributing at least $700 million each through the Delegated and Underwriting and Servicing (DUS) platform: PNC Financial Services Group Inc.; Deutsche Bank Berkshire Mortgage; Prudential Multifamily Mortgage Inc.; Wells Fargo Bank NA; Walker & Dunlop LLC; Greystone Servicing Corporation Inc.; Grandbridge Real Estate Capital LLC; Arbor Commercial Funding LLC; AmeriSphere Multifamily Finance LLC; and CB Richard Ellis Inc. According to Fannie Mae, its DUS lenders were responsible for more than 90 percent of the Fannie Mae multifamily debt business in 2009, and nearly 90 percent of the units financed by Fannie Mae DUS lenders and affordable for families at or below their area median income.

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DEALMAKERS

The Alaska Housing Finance Corporation (AHFC) recently helped finance Lumen Park Senior Housing, a 20-unit affordable housing development in Anchorage. Lumen Park Associates, the property's owner and operator, received $1.8 million under AHFC's Senior Citizens' Housing Development Fund and a $2.6 million low-income housing tax credit (LIHTC) award, along with an AHFC mortgage loan. Lumen Park will be a three-story building containing eight one-bedroom apartments and 12 two-bedroom units. Five units will be reserved for residents earning 30 percent or less of the area median income (AMI), another five for residents earning 50 percent or less, and nine for residents earning 60 percent or less. An on-site property manager will live in the remaining unit. Rents will range between $412 and $887 per month. Lumen Park Senior Housing is the eighth affordable housing development in Alaska developed by Trapline-CDI Developers LLC and financed by AHFC.

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PNC Real Estate announced the completion of PNC Real Estate Tax Credit Capital Institutional Fund 42, a $71 million investment limited partnership that closed in February. The fund includes investments in 10 operating partnerships involving multifamily affordable housing developments located in eight states. A single institutional investor acquired the limited partnership interests in the fund, and will derive a return based primarily on LIHTCs and passive losses from estate depreciation.

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Not-for-profit LIHTC syndicator the National Equity Fund (NEF) announced that it has joined forces with State Farm Insurance to support development that creates healthy living spaces, eliminates blighted and vacant lots, and generates jobs. State Farm made an expanded $25 million commitment to help revitalize low-income communities by financing affordable housing through the Good Neighbor Fund, which was created by State Farm and NEF. The investment is expected to support the creation of as many as 300 affordable rental homes with green features, with the first development slated for Milwaukee, Wis.

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Raymond James Tax Credit Funds partnered with JPMorgan Capital Corporation to provide more than $20 million in LIHTC equity to construct two multifamily housing developments in Madison, Wis. Scheduled for completion in October, Midtown Place is a planned four-story family development with 88 one-, two- and three-bedroom units reserved for households earning less than 60 percent of AMI. City Row Apartments in downtown Madison is also scheduled to be completed in October and will feature 83 studio, one-, two- and three-bedroom units for residents earning less than 60 percent of AMI. Both developments will keep residents' utility costs low by installing solar systems, including solar water heaters.

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STATE

The Georgia Department of Community Affairs (DCA) announced in April that it will have approximately $18 million in federal low-income housing tax credits (LIHTCs) to allocate for 2010 if the Section 1602 LIHTC cash grant exchange program is renewed. If the exchange program is not renewed, DCA will have approximately $23 million for the 2010 round, including the approximately $5 million in unallocated 2010 funds that would carry over into the 2011 round. Applications for the 2010 round are due July 22.

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The New Hampshire Housing Finance Authority (NHHFA) announced that its board of directors approved a conditional commitment of $2.7 million in LIHTCs for five developments with a total of 140 new units. The five developments are South Porter Street, phase II, in Manchester; Harriman Hills, phase I, in Wolfeboro; Theatre Street, in Concord; Town and Country, phase II, in Littleton; and Whitehall Road, in Hooksett. The cumulative development cost is more than $28 million and NHHFA expects the projects will support approximately 300 construction-related jobs.

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Minnesota Housing announced that approximately $75.8 million is available under its 2010 multifamily and single-family programs as well as its 2011 housing tax credit program. Applications, materials and instructions for the requests for proposals (RFPs) are available on the agency's web site. Under this funding round, Minnesota Housing will prioritize projects that are transit-oriented and focus on foreclosure remediation, economic integration and job stimulation. Applications for round one of the LIHTC program and the multifamily RFP are due at 5 p.m on June 15. Visit the Minnesota Housing web site, www.mnhousing.gov, for additional information.

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The Colorado Housing and Finance Authority (CHFA) completed the first round of its 2010 competitive LIHTC allocation process and announced the developments that will receive LIHTC reservations of more than $4.7 million. The developments are Point of the Pines Gardens, an 89-unit assisted living facility in Colorado Springs; Bluff Lake, a 92-unit project offering 46 units for homeless individuals and families in Denver; Dahlia Square, with 88 units for low-income seniors in Denver; Glenwood Family, a 56-unit project for low-income households in Glenwood Springs; and Pikes Peak Senior, with 70 units for seniors in Colorado Springs. For more information about the recipients, see the 2010 status report on CHFA's web site at www.chfainfo.com.

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The Sacramento County Superior Court ruled that California's governor has the right to redistribute more than $2 billion in local redevelopment funds to help balance the state's budget, the Associated Press (AP) reported. California has a projected budget deficit of approximately $20 billion for the fiscal year beginning in July. The judge ruled that Gov. Arnold Schwarzenegger can divert the money, which local governments use for public works and downtown rehabilitation projects, to school operations within those districts. Local governments objected to shifting the money and expressed concern that underfunding of local redevelopment projects would slow job creation.

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Gov. Bob McConnell announced an initiative to establish an executive housing policy framework and form a housing policy advisory committee to reduce homelessness and expand affordable housing in Virginia. The policy framework will guide decision-making and bring coordination in housing matters throughout executive branch agencies. State and local representatives, private industry groups, not-for-profit housing developers and consumer representatives will serve on the advisory committee, which will be chaired by Bob Sledd.

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PEOPLE

MassHousing announced that its executive director, Thomas Gleason, will serve on Fannie Mae's first affordable housing advisory council, formed to advise Fannie Mae on how the corporation can best support affordable housing creation. The council will meet twice a year, with its first meeting scheduled in June. Gleason advocated for reform of Fannie Mae and other government-sponsored entities in April when he testified on behalf of the National Council of State Housing Agencies before the House Committee on Financial Services.

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Gov. Arnold Schwarzenegger appointed Steven Spears as executive director of the California Housing Finance Agency (CalHFA). Spears has served as the agency's acting executive director since December 2008. His previously held positions that include managing director of The SAER Group, deputy state treasurer for public finance from 1995 to 1998 and as legal counsel for then-State Treasurer Matt Fong on the State Board of Equalization. Spears holds a juris doctor from the McGeorge School of Law of the University of the Pacific, a master's degree in business administration and a second master's degree in accounting.

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Centerline Capital Group announced that Marc D. Schnitzer, its chief executive officer and president, will retire from the board of trustees of Centerline Holding Company to join an affiliate of Island Capital Group LLC. Robert L. Levy, chief financial officer since 2006, was appointed to Centerline's board of trustees and named chief operating officer. He will also assume the role of Centerline president, effective upon Schnitzer's resignation. Levy will focus on expanding and diversifying Centerline's multifamily finance and asset management platforms.

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Mark Williams was appointed as director in Arbor Commercial Funding LLC's Denver office. He will be responsible for originating loans in the Rocky Mountain region, concentrating on Fannie Mae DUS and Federal Housing Administration transactions. Williams previously served as the director of Red Capital Group, where he managed the Denver multifamily production office. Prior to joining Red Capital, he closed more than $400 million in debt and equity transactions as vice president of GMAC Commercial/Capmark Finance.

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Alison Badgett was appointed as the executive director of the New York State Association for Affordable Housing (NYSAFAH). Prior to joining NYSAFAH, Badgett was New Jersey Gov. Jon Corzine's senior policy advisor on housing, land use and development. Her past positions include executive director of Homes for New Jersey and executive director of the Mercer Alliance to End Homelessness. Badgett holds a bachelor's degree in politics from Princeton University.

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BONDS

The Internal Revenue Service (IRS) released Notice 2010-35, which provides interim guidance for the new federal refundable tax credit subsidy option for certain qualified tax credit bonds, including Build America Bonds, under the Hiring Incentives to Restore Employment (HIRE) Act. The IRS and the Treasury Department will implement the refundable credit payment procedures for Direct Pay Tax Credit Bonds promptly so that enable issuers can begin to issue those bonds for qualified purposes. Notice 2010-35 can be found online at www.taxcredithousing.com.

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The California Department of Housing and Community Development (HCD) issued a notice of funding availability (NOFA) in May, announcing the availability of $35 million under its general multifamily housing program (MHP) and $23 million under the MHP for homeless youth housing. MHP general funds are available as permanent financing for affordable multifamily rental and transitional new construction, acquisition/rehabilitation and conversion housing developments. MHP homeless youth funds are available as permanent financing for projects that include at least five units for homeless youth. A complete, original application is due to HCD no later than 5 p.m. on July 23, and HCD expects to issue awards in November. To read the full NOFA or receive an application package, visit HCD's MHP web site at www.hcd.ca.gov/fa/mhp or call MHP staff at (916) 323-3178.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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