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Low-Income Housing Tax Credits News Briefs - June 2017

LIHTC Industry

The Rural Housing Service released a notice in the May 3 Federal Register announcing a series of teleconferences and/or web conference meetings concerning the U.S. Department of Agriculture (USDA) multifamily housing program. The objectives of the series is to enhance the effectiveness of the multifamily housing program, establish a two-way communications forum to update industry participants and Rural Housing Service (RHS) staff, enhance RHS’ awareness of issues that impact multifamily housing and to increase transparency and accountability in the multifamily housing program. Discussion topics will include updates on USDA multifamily housing program activities, perspectives on the multifamily housing notice of funds availability processes and comments on multifamily transaction processes. The meetings are scheduled to occur quarterly during 2017, with the dates and times to be announced via email to registered parties. The notice can be viewed at www.taxcredithousing.com. 

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The Office of the Comptroller of the Currency (OCC) released Community Reinvestment Act (CRA) performance evaluations May 2. The evaluations are for national banks, federal savings associations and insured federal branches of foreign banks for April. Of the 18 evaluations released, one rated as outstanding, 16 rated as satisfactory and one rated as needs to improve.

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The Federal Housing Finance Agency (FHFA) announced May 8 that it will extend the period for public input on its proposed evaluation guidance for the Duty to Serve program (DTS program) from May 15 to June 7. The FHFA requested public input on Fannie Mae’s and Freddie Mac’s proposed Underserved Markets Plans under the DTS program, which compels those agencies to serve three underserved markets: manufactured housing, rural housing and affordable housing preservation. The Underserved Markets Plans were also released May 8 and discuss how Fannie Mae and Freddie Mac might participate in the LIHTC market and the LIHTC equity market. The FHFA requests public input through its webpage at www.fhfa.gov/dts by July 10.

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The National Affordable Housing Management Association (NAHMA) announced April 18 the launch of its initiative, Cities Where You Can Afford to Work and Live, with the publication of its report, “Five Cities Taking Steps to Improve Access and Availability.” NAHMA’s report provides case studies of Atlanta; Columbus, Ohio; Denver; Minneapolis and San Diego, cities NAHMA says are making progress in implementing policies to address the shortage of affordable housing in their locales. The report explores the efforts of these cities to improve access to rental housing and reduce the rent burden incurred by residents in targeted income groups. Five Cities Taking Steps to Improve Access and Availability can be found on NAHMA’s website, www.nahma.org.

LIHTC State

The Vermont Housing Finance Agency (VHFA) board of commissioners announced April 17 a combined $33 million in federal low-income housing tax credits (LIHTCs) and Vermont affordable housing credits for the new construction and renovation of 11 affordable apartment communities throughout the state. VHFA allocated $25 million in LIHTCs and $610,000 in 10-year federal uncapped bond credits, as well as $485,000 in five-year state credits. In addition, five of the properties were approved for a combined $7.2 million in permanent and construction financing. Properties in Burlington, Putney, South Burlington, Brattleboro, Bristol, Hardwick, Middlebury, Montpelier, Newport, Poultney and Springfield will provide a total 272 apartments. 

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The Washington State Housing Finance Commission (WSHFC) approved $269.5 million in LIHTCs and bonds April 27. The financing will go to the new construction and rehabilitation of more than 1,100 affordable apartments throughout the state. Some of the properties to receive awards include Aberdeen Manor Apartments, in Aberdeen, which will receive approximately $14.4 million in LIHTCs to rehabilitate 160 apartments in two buildings. Bicycle Apartments in Yakima will receive approximately $16.5 million in LIHTCs for 80 new apartments. Holy Names Homeless Families in Spokane will receive approximately $14.3 million in LIHTCs for 75 new apartments. North 96th Supportive Housing in Seattle will receive approximately $15.8 million in LIHTCs and will provide 99 studios. Renton Commons in Renton will receive $9.8 million in LIHTCs for 47 new apartments. 

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The Colorado Housing and Finance Authority (CHFA) announced the first round of the 2017 LIHTC allocations April 26. A total of 12 developments constructing or preserving 1,290 affordable rental apartments received funding. Properties were located in Denver, Evergreen, Longmont, Lakewood, Aurora, Colorado Springs and Fort Collins. In the first round, 20 applications were received, requesting $16.4 million.

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The California Tax Credit Allocation Committee (CTCAC) released May 4 a memo and a redlined version of the leasehold rider agreement. CTCAC issued the documents to CTCAC stakeholders, stating that LIHTC property owners with ground leases must execute a CTCAC lease rider. Both the memo and the agreement are available at www.taxcredithousing.com. 

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The California Debt Limit Allocation Committee (CDLAC) announced May 11 that a LIHTC allocation meeting will be scheduled for either Oct. 18 or Nov. 15. CDLAC is asking those who are interested in submitting an application for a tax-exempt bond allocation to indicate which of the dates best meets the needs of their development. CDLAC also seeks the name of the development and the number of housing units planned. Responses are requested by email at [email protected] by June 21.

LIHTC Dealmaker

Bellwether Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced April 26 the closing of more than $62 million in financing for the preservation of affordable housing. The Larkspur, in New York City, is an eight-story mixed-income and mixed-use property with 116 residential apartments and seven ground-floor commercial spaces. Bellwether Enterprise provided a $37 million competitive, fixed-rate mortgage-backed security loan with a 12-year lending term through Fannie Mae. 

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The dedication of Walnut Avenue Homes in Niagara Falls, N.Y., was May 1. The development provides 41 new apartment homes, with developer Housing Visions and the Young Women’s Christian Association (YWCA) of Niagara working to reserve 13 apartments for formerly homeless women and their children. Funding for development included $6.9 million LIHTC equity. Financing also included $1.1 million from the State Housing Trust Fund and $1 million from the State HOME program, as well as $1.7 million from the State Office of Temporary and Disability Assistance’s Homeless Housing Assistance Program; $577,000 in federal historic tax credits (HTCs) and $364,408 in state HTCs. There was also a $300,000 Community Development Block Grant and $102,500 from the state Energy Development and Research Authority. Development costs totaled $12.2 million. 

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BRIDGE Housing celebrated the rededication of Ocean View Senior Apartments April 19. Renovations for the 100-apartment Pacifica, Calif., property included replacing aging building systems with more efficient and higher-performing alternatives, as well as the restoring and enhancing the building’s physical condition. Energy efficiency upgrades included the installation of solar photovoltaic panels. Property amenities include a clubhouse, two outdoor courtyards and newly created community garden beds. Recapitalization also provided funding to expand on-site services, giving residents access to programs such as wellness and nutrition classes and referral services. Financing for the $34 million recapitalization was provided by the County of San Mateo Department of Housing, the Housing Authority of the County of San Mateo, Merritt Community Capital Fund XVII, the California Housing Finance Agency, HEART of San Mateo County, the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee. The nonprofit affordable housing developer acquired the property in 2015. 

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MassHousing announced March 22 a $16.6 million investment including LIHTCs and funding for the renovation of the Oak Terrace Apartments in Boston. MassHousing provided the Asian Community Development Corporation with a $12.5 million construction and permanent loan, as well as a $4.1 million bridge loan. The Oak Terrace Apartments is comprised of 14 one-, 32 two-, 33 three- and nine four-bedroom apartments in a 10-story building with connecting three- and four-story townhomes. Of those 88 apartments, 60 will remain affordable, and 30 are subsidized by a U.S. Department of Housing and Urban Development (HUD) housing assistance payment (HAP) contract for at least 15 years. The remaining 28 apartments will be rented at market rate. Property improvements for both complexes include building envelope repairs, roof replacement, major systems replacement, kitchen and bathroom upgrades, window refurbishment, new flooring, common area upgrades and accessibility modifications.

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KeyBank’s Community Development Lending & Investment (CDLI) team announced April 6 a $15.5 million bridge-to-HUD-loan for Royal Hills Apartments. The HUD loan will allow for the construction of the Renton, Wash., multifamily property. There will be 284 apartments, of which 281 will be designated affordable housing for individuals and families making at or below 45 percent of the area median income (AMI). Of the 281 apartments, 57 will be set aside for individuals and families with disabilities making at or below 50 percent of the AMI. Amenities will include a central laundry, a playground and a community room. 

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Pembrook Capital Management LLC announced May 1 the acquisition of $11.4 million of debt for two California affordable housing complexes. The acquisition is the first step for the preservation of the properties in Los Angeles and Sacramento. The resyndication of both properties will be under the LIHTC program. The cost of capital improvements on 571 apartments is estimated at more than $9 million. One property has 386 apartments in an affordable housing complex built in 1972. The other property has 185 apartments in an affordable housing complex built in 1950.  

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Ground broke April 7 on a five-story, $19 million apartment complex in Chicago. The McCrory Senior Apartments will be an affordable apartment complex and will provide 62 one-, two- and three-bedroom apartments reserved for residents 62 and older earning no more than 60 percent of the AMI. There will also be a community room, a fitness center, theater space, offices, laundry facilities and a patio. The property is being financed with $13 million in LIHTCs from the Illinois Housing Development Authority, as well as $600,000 from the Federal Home Loan Bank. Additional funding includes $4.1 million from the area’s tax increment financing (TIF) district. A 0.25-acre of land valued at $697,000 was provided for the development for $1 by city officials. McCrory Senior Apartments, named for the Rev. Henry McCrory, the founding pastor of the First Baptist Congregational Church, is expected to open May 2018. 

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A groundbreaking ceremony was held April 18 for Downtown View. Construction on the $17 million, five-story housing complex in Minneapolis is funded with $8.3 million in LIHTCs. Additional funding includes $12 million in public funding, $6 million collected in a fundraising campaign, with a donation to the campaign of $500,000 from the Pohlad Family Foundation. The property is for people in their late teens and early 20s who are homeless. There will be 46 residential apartments, as well as support services for people ages 18 to 24. Urban Works Architecture designed the property, which will be developed by YouthLink and Project for Pride for Living and constructed by Greiner Construction. Construction is slated for completion in late 2017. 

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Ingerman, a New Jersey development company, announced plans in mid-April to break ground in the next few months on an affordable housing complex in Westampton, N.J. The Willows at Westampton will provide six, three-story residential buildings with 72 one-, two- and three-bedroom apartments. There will also be a single-story community building. Ingerman received $12 million in LIHTCs for the development. 

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KeyBank’s Community Development Lending & Investment (CDLI) team announced May 2 a LIHTC equity investment of $20.1 million for the redevelopment of 152 affordable apartments in Lakewood, Colo. The complete financing package for Metro West Housing Solutions property also included a forward-starting $10.8 million Freddie Tax Exempt loan and a $26.3 million construction loan. Apartments will be available to workforce households and families earning between 30 and 60 percent of the AMI. Of those apartments, 75 percent are reserved for those earning 60 percent of the AMI and the remaining 25 percent are for residents earning between 30 and 50 percent of the AMI. Amenities include a community room, a business center, a fitness center, a rooftop deck, a community garden, barbecue and picnic areas and free Wi-Fi. Metro West Solutions will also coordinate supportive services such as emergency needs, computer skills classes, job search assistance, career planning, support with first-time home buying, financial fitness classes and cooking and nutrition classes. Metro West Housing Solutions broke ground April 27, with redevelopment expected to be completed in the fall of 2018.

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Lancaster Pollard announced May 3 the refinancing of South Oak Crossing in Charlotte, N.C. Assisting Charlotte-Mecklenburg Housing Partnership (The Housing Partnership) with the refinance, Lancaster Pollard secured an FHA Section 223(f)-insured loan with a 35-year term and low fixed interest rate for the $10.2 million refinance of the 192-apartment LIHTC multifamily property. In addition, loans from the city of Charlotte and from HUD’s HOPE VI program were subordinated to the new HUD loan, while the Charlotte Housing Authority conducted a Rental Demonstration Assistance (RAD) program conversion on 20 of the apartments. 

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Candeur Group, an investment banking firm for the affordable housing industry, announced April 27 the closing of a $7.6 million LIHTC equity investment in an Aurora, Ill., property. Sage Crest Apartments is a 102-apartment property built in 1977 under HUD’s Section 8 Housing program. Developers Preservation Partners Development (PPD) will invest approximately $60,000 per apartment in the rehabilitation of the property. Additional funding included $650,000 of subordinate bonds, $9 million in short-term bonds underwritten by Citigroup Global Markets Inc., and an $11.45 million FHA 221(d)(4) loan provided by Red Mortgage Capital LLC. 

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Ground broke on Parkdale Villas May 5. The affordable apartment complex in Denison, Texas, will provide 140 homes to low- and moderate-income tenants and residents. There will be one-, two- and three-bedroom apartments available to residents earning between 30 and 60 percent of the AMI. The $21 million Parkdale Villas development will be redeveloped with $1.5 million in federal LIHTCs from the Texas Department of Housing and Community Affairs. 

LIHTC People

Keith A. Noreika assumed May 5 the role of acting comptroller of the Office of the Comptroller of the Currency (OCC). Noreika, who was appointed by U.S. Treasury Secretary Steven T. Mnuchin, is a partner at Simpson Thacher & Bartlett LLP. Before that, he was a partner at Covington & Burling. He has experience advising regional, multinational and other banks on structuring their operations. This includes compliance with the Volcker Rule and Consumer Financial Protection Bureau regulations, as well as Bank Secrecy Act and anti-money laundering rules. Noreika serves as acting comptroller after the departure of Thomas J. Curry, whose five-year term ended April 9.

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Pennrose, a multifamily housing development and property management company, announced May 5 the addition of Barry Weaver to its property management executive team. Weaver is the vice president of operations at Pennrose. He will oversee the regions in eastern Pennsylvania and New Jersey, which includes nearly 60 properties and 3,500 apartments. Weaver has extensive experience with such programs as the low-income housing tax credit (LIHTC), U.S. Department of Housing and Urban Development (HUD) Section 202, Section 8, Bond, HOME, Hope VI, ACC, Housing Choice Voucher and RAD programs. Before joining Pennrose, Weaver served as president of property management for Columbia Residential. Before that, he held several executive positons with Westlake Housing LP and Volunteers of America. 

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BRIDGE Housing announced the promotion of Joanna Yong April 24 as vice president of compliance. In this role, Yong oversees an asset management team responsible for ongoing compliance for BRIDGE’s portfolio of more than 11,000 apartments. Before this promotion, Yong was the director of asset management at BRIDGE. She joined BRIDGE in 1986, and worked in several offices for the nonprofit developer, owner and manager of affordable housing, including office management, accounting, IT and human resources. Yong is based in BRIDGE’s San Francisco office. 

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The Oklahoma Housing Finance Agency (OHFA) board of trustees announced Deborah Jenkins as executive director designee April 17. She will succeed Dennis Shockley when he retires Oct. 2. Before this appointment, Jenkins served as director of OHFA’s statewide Housing Choice Voucher rental assistance program since 1999, and held other positions in OHFA before that. Jenkins is a member of the housing committee for the National Association of Housing and Redevelopment Officials, a former member of the board of governors for National Association of Housing and Redevelopment Officials (NAHRO), a member of the Oklahoma Disaster Housing Task Force and a member of the Oklahoma Health Care Authority Living Choice Advisory Committee.

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Georgia Department of Community Affairs (DCA) Commissioner Camila Knowles announced Rusty Haygood as DCA’s new deputy commissioner of community development and finance April 1. Before this role, Haygood was division director for community development at DCA. Before that, he served as the director of field services for DCA’s economic development and finance division, economic development director for Oconee County and held several roles with the Middle Georgia Regional Development Center, with his final role being director of public administration. Haygood’s appointment follows the departure of Christopher Nunn.

Journal Category:

Low-Income Housing Tax Credits

Authors:

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