Low-Income Housing Tax Credits News Briefs - June 2013

Saturday, June 1, 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

The National Council of State Housing Agencies (NCSHA) released a statement to the House Ways and Means Committee in response to the call for comments on tax code provisions. In the letter, NCSHA discussed the importance of low-income housing tax credits (LIHTCs) and tax-exempt housing bond programs. In “Support of Preserving and Strengthening the Low-Income Housing Tax Credit and Tax-Exempt Housing Bond Programs,” NCSHA asks the House Ways and Means Committee to preserve and strengthen these programs in any tax reform plans. The NCSHA provided examples of successful program results, the reasons for their success and reasons for why they are needed. Reasons listed include that the programs’ results cannot be replicated through a federal spending program and that the critical housing needs they address are great and growing. A copy of the report is available at www.taxcredithousing.com.

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Moody’s Investors Services released a report in April regarding the U.S. Public Finance Office. “State HFA Multifamily Mortgage Loans Continue Strong Performance in 2012” is based on a June 30, 2012 survey, conducted to obtain updated loan characteristics and performance information. It rated 41 multifamily bond programs that were sponsored by 19 state and two local housing finance agencies (HFAs). The report stated that in 2012, delinquencies stayed low and losses were minimal. In total, bonds outstanding of $15 billion financed 423,116 units and 4,540 projects. The report also found that only 0.99 percent of HFA multifamily mortgage loans were delinquent by more than 90 days, down from 1.47 percent a year earlier. Moody’s presented information on losses, stating that only two HFAs reported losses on real estate owned sales over the prior five years, totaling $2.9 million. The prior year, six HFAs reported losses totaling $14 million over the past five years. Moody’s report also stated that 38 percent of mortgage loans included financing through the LIHTC equity program, and that 33.5 percent of the loans have rental subsidies from HUD, USDA or other federal programs. A copy of the report is available at www.ncsha.org.

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The Center for Housing Policy’s Housing Landscape 2013, released in May, looks at housing cost burdens among working renters. Results showed that 26.4 percent of working renters spent more than half of their household income on housing costs, the number rising for the third straight year. The report stated that the causes of rising housing cost burdens among working renters include a difficult economy and an increased demand for rental housing. National findings include that nearly one in four working households spend more than half of its income on housing, declining incomes have exacerbated housing affordability problems for working renters and severe housing cost burdens were most prevalent among working households earning less than 30 percent of area median income (AMI). Housing Landscape 2013 studies the American Community Survey data from 2011, with The National Housing Conference (NHC) charting trends in housing cost burdens among working households from 2008 to 2011.

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The Affordable Housing Tax Credit Coalition announced the winners of the 19th Annual Charles L. Edson Tax Credit Excellence Awards in April. Winners included Union Rowe, Baltimore Md., for metropolitan/urban housing; Cottages and Gardens at Chesapeake, Elkton, Md., for rural housing; Luna Lodge, Albuquerque, N.M., in special needs housing; Victory Square, Washington, D.C., in senior housing; Oak Street Lofts, Portland, Maine, for green housing; Westlawn Renaissance, Milwaukee in public housing; and Poway Villas, San Diego, for Department of Housing and Urban Development preservation properties.

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Ways and Means Committee Chairman Dave Camp, R-Mich., and ranking member Sander Levin, D-Mich., released a statement regarding the Joint Committee on Taxation (JCT) report on the Ways and Means Committee Tax Reform Working Groups. Released in May, the report includes a summary of present law and suggestions for reform submitted to the 11 Tax Reform Working Groups. A copy of the statement and the report can be viewed at waysandmeans.house.gov.

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STATE BRIEFS

The Wisconsin Housing and Economic Development Authority (WHEDA) will provide 23 properties with $11.5 million in LIHTCs for affordable housing. An estimated 1,000 construction jobs will be created and a total of 1,006 units of affordable housing will be available for rent. The LIHTCs will help finance units in the Antigo, Bayfield, Burlington, Hayward, Madison and Wisconsin Rapids communities, among others. WHEDA received 59 applications for this round, representing nearly $33 million in requests. The credits will be awarded over a 10-year period.

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The South Dakota Housing Development Authority (SDHDA) awarded 12 developments a total of $2.78 million in LIHTCs, $5.64 million in HOME Investment Partnership funding and $1.09 million in Neighborhood Stabilization Program 3 (NSP3) funding for housing development and rehabilitation. The SDHDA received 14 LIHTC applications requesting more than $5.4 million, and 18 HOME program applications requesting more than $11 million. A total of 206 multifamily housing units and 17 single-family housing units will be constructed, while a total of 200 multifamily housing units and a single-family home will be rehabilitated.

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The Local Initiative Support Corporation (LISC) is providing loans for California’s Golden State Acquisition Fund, which helps developers acquire property for affordable housing. LISC is offering a total of $13.9 million in loans at 5.15 percent for up five years. In order to qualify for the LISC loans, developments must focus on low-income residents. To qualify for the GSAF funds, developments must demonstrate local government support, the availability of leveraged funds, organizational stability and capacity, and a track record of developing affordable housing.

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The Minnesota Housing Finance Agency (MHFA) announced its request for proposals for 2014 multifamily and single-family rental housing. Applications, materials and instructions are available on the agency’s website. MHFA anticipates that approximately $12 million in credits will be available. Applications for the 2014 Multifamily Housing RFP and the first housing tax credit round are due June 18 at 5:00 p.m.

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BOND

The Washington State Housing Finance Commission released a memorandum in April detailing proposed changes to streamline the multifamily housing bonds and 4 percent tax credit program. Because of a merger between the commission’s capital projects and tax credit divisions (the multifamily housing and community facilities division), the Multifamily Housing Bond program and the 4 Percent Tax Credit program will now have a single set of policies. Three areas have had changes proposed to them: point scoring, minimum threshold requirements and application fees. The new combined program will be called the Multifamily Housing Bonds with 4 Percent Tax Credits, or the Tax Credit/Bond Program.

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DEALMAKERS

Huntington Bank will continue its partnership with Ohio Capital Corporation for Housing (OCCH), and will invest $150 million in new construction and preservation of affordable housing developments. The partnership, renewed through 2015, will create 2,000 affordable homes throughout Ohio. Huntington Bank and OCCH will invest more than $1 million for a health and wellness initiative, which will provide services to affordable housing residents. Also noted is Ohio Equity Fund for Housing XXIII, with investment partners contributing $180 million. The fund will assist in the financing of affordable housing in Ohio and Kentucky. Fund XXIII is anticipated to include 34 developments with more than 1,700 units of affordable housing. Development types include single family homes, new construction and rehabilitated properties for families, persons with special needs and the elderly.

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Many Mansions’ new $24 million Hillcrest Villas, which include 60 new units of affordable housing, in Thousand Oaks, Calif., held its grand opening in April. The property received $12.4 million in financing from U.S. Bank, more than $11.4 million of LIHTC equity from the U.S. Bancorp Community Development Corporation, and an Affordable Housing Program grant. Hillcrest Villas comprises five residential buildings with a separate community building, where Many Mansions, a nonprofit affordable housing and service provider, will offer service programs. The city of Thousand Oaks, Ventura County, California Housing Finance Agency and the State of California also provided funding, including HOME funds to the development. The Mental Health Services Act (MHSA) program is subsidizing rent and expenses.

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Highlands Apartments, a 59-unit senior development will begin construction thanks to LIHTC investments from Boston Capital. Located in Boulder, Colo. Highlands Apartments will comprise 38 one-bedroom and 21 two-bedroom units situated in a three-story building. Each unit will feature a washer and dryer and an emergency call system, among other amenities. Units will be available to seniors ages 62 and older earning 60 percent or less of the area median income. Senior services will also be provided on-site. The apartments are designed to meet the Enterprise Green Communities high performance building criteria. The construction of Highlands Apartments is anticipated to produce $5.7 million in local income and create nearly 85 jobs.

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Boston Capital’s Tax Credit Fund XXXVII is closing. The fund has 25 affordable apartment properties in 16 states and a fund size of $130 million in equity. The fund includes nine developments for senior citizens and 16 properties for families. Fund XXXVII is expected to create roughly 1,400 jobs and generate nearly $104 million in local income. Though Fund XXXVII is closing, Boston Capital has launched Corporate Fund XXXVIII, a $175 million equity fund that is expected to close in fall 2013.

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Merritt Community Capital Corporation, a company providing equity capital for affordable housing throughout California, recently closed Fund XV, a $65 million multi-investor fund. Fund XV has 12 acquisition rehab properties with 702 units of affordable housing statewide. Developer partners for this fund include Mercy Housing, the Housing Authority of Santa Clara County, Eden Housing and Terra Corporation, among others. Four new investors in Fund XV are Redding Bank of Commerce, Bank of Marin, Boston Private Bank & Trust Company and Farmers, and Merchants Bank of Central California.

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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.

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RBC Capital Markets’ Tax Credit Equity Group announced the closing of the RBC Tax Credit Equity Fund 17 in April, with a total equity of roughly $127 million. The fund comprises 19 affordable housing properties across 15 states, with 15 multifamily developments and four senior housing developments. The properties have a total of 1,046 units and are estimated to have created 1,265 construction jobs and 316 permanent jobs.

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The Hawaii Housing Finance & Development Corporation, Stanford Carr Development, the Hawaii Community Development Corporation and the U.S. Department of Housing and Urban Development (HUD) brought the private and public sectors together by partnering up for the development of Halekauwila Place. The affordable rental development broke ground in April and will provide 204 new units in Kakaako, Oahu.

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PEOPLE IN THE INDUSTRY

Affirmed Housing Group added two new team members, Jimmy Silverwood and Jeanne Blake. Silverwood will take on the role of assistant project manager. His responsibilities will include property assessment and acquisition, construction timeline and budget management. Silverwood previously worked for general contractor, Turner Construction. A graduate of the University of Colorado, Silverwood earned a degree in finance, with a minor in real estate. He was also part of the university’s Leeds School of Business. Blake will also join the company as assistant project manager, and will support the project managers and acquisition manager. Blake will be in charge of public funding applications. She has almost a decade of experience in affordable housing and experience with development of family, mixed-use and special needs projects. She is a graduate of the LISC Affordable Housing Training Program.

Journal Category: 
Low-Income Housing Tax Credit