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Low-Income Housing Tax Credits News Briefs - March 2011

AFFORDABLE HOUSING INDUSTRY

Federal Housing Finance Agency (FHFA) director Edward J. DeMarco announced that the agency will restructure its office of safety and soundness and its mission office. The reorganization will include the establishment of an integrated supervision structure and a revamped housing mission and policy division. The agency said changes in the supervision program structure will promote greater uniformity and consistency in the examinations of the government-sponsored enterprises and Federal Home Loan Banks. The new housing team will focus on policy matters involving the government sponsored enterprises (GSE) conservatorships, including loss mitigation activities, public reporting on the activities of FHFA's regulated entities, affordable housing, the state of the secondary mortgage market and Dodd-Frank-related activities. FHFA plans to implement the new structure by the end of the first quarter. In a separate notice, the FHFA announced that beginning in November it will consolidate its three office locations into one, moving from Northwest Washington, D.C. to Constitution Center at 400 Seventh Street, Southwest. More details about FHFA's reorganization and relocation are available at www.fhfa.gov.

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The National Affordable Housing Management Association (NAHMA) announced that the submissions deadline for its 2011 Affordable Housing Vanguard Award is April 15. The award, which complements NAHMA's Communities of Quality awards, highlights the results of public-private partnerships and demonstrates that exceptional affordable housing is a positive addition to a neighborhood. Awards will be presented in four categories: new construction, major rehabilitation of an existing rental housing community, major rehabilitation of a non-housing structure into affordable rental housing, and major rehabilitation of an historic structure into affordable rental housing. Affordable multifamily communities that are less than three years old as of the April 15 deadline may apply. NAHMA will recognize winners at its summer meeting in Las Vegas, Nev. More information about the awards and the application process is available at www.nahma.org.

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The Affordable Housing Tax Credit Coalition (AHTCC) is accepting entries for the 17th annual Charles L. Edson Tax Credit Excellence Awards. AHTCC presents the annual awards to the most outstanding low-income housing tax credit (LIHTC) properties in seven categories: metropolitan area development, rural development, special needs housing, senior housing, green housing, public housing revitalization and disaster relief housing. AHTCC is encouraging nominations. Projects must have been placed in service on or after January 1, 2010 to qualify. Entries must be postmarked by March 21 and sent directly to AHTCC. Each winner and honorable mention will be honored at an awards ceremony in Washington, D.C. A complete application, judging criteria and other requirements can be found at www.taxcreditcoalition.org.

DEALMAKERS

National Equity Fund (NEF) posted record LIHTC investing in 2010 with a preliminary estimate of $835 million in LIHTC equity investments. Last year's activity included support for 105 affordable housing developments that contain more than 6,000 units and generated approximately 11,500 jobs. NEF was also able to make a $7.8 million grant to Local Initiatives Support Corporation (LISC), its parent company, to help LISC stimulate revitalization in disadvantaged neighborhoods. NEF reports that it has invested $8.8 billion in more than 2,000 projects with more than 121,000 affordable units, while at the same time supplying $105 million in community development capital to LISC.

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Preservation of Affordable Housing Inc. (POAH) closed a refinancing for Sugar River Mills Apartments in Claremont, N.H., a 19th century textile mill that was converted to affordable housing in 1982. The property includes 139 units for low-income seniors and 23 units for families. POAH used LIHTCs to preserve the property's affordability and fund rehabilitation work, which includes window replacement, and new heating and water system installations. POAH will also use a $500,000 grant from TD Bank to improve indoor air quality and reduce the building's carbon emissions and propane gas consumption; it will install a solar thermal system and a living wall of plants specifically chosen for their air purification abilities as well as provide a resident smoking cessation program.

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Watts Labor Community Action Committee (WLCAC) and Affordable Housing CDC Inc. celebrated the grand opening of Dolores McCoy Villa, a 64-unit affordable community in the Los Angeles, Calif.'s Watts neighborhood. McCoy Villa will provide supportive services including case management, budget counseling, employment training and counseling to help low-income and formerly homeless or incarcerated residents. The fully furnished apartments include 40 two-bedroom and 24 three-bedroom units, walk-in closets and energy-efficient appliances. The complex also includes common areas, a laundry room, a community room, athletic center, playground and underground parking area. Financial assistance was provided by the city and county of Los Angeles, the LIHTC program and U.S. Bank. Rental subsidies from the Los Angeles Housing Authority's Permanent Supportive Housing Program will ensure affordability.

STATE

The Colorado Housing and Finance Authority (CHFA) announced that it has received 26 letters of intent requesting a combined total of more than $27 million for the first LIHTC allocation round of 2011. CHFA has posted a list of the letters of intent on its web site at www.chfainfo.com.

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Standard & Poor's Rating Services (S&P) raised its issuer credit rating for the Alaska Housing Finance Corporation (AHFC) from AA to AA+. S&P's January report cited AHFC's high equity levels, prudent debt management policies, experienced management team, a dividend plan that limits transfers of net income from AHFC to the state, and Alaska's strong creditworthiness. AHFC's Joe Dubler said the rating is a testament to the corporation's swift and appropriate handling of its first net operating loss – $9.8 million – caused by the recession.

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New York Gov. Andrew Cuomo revealed his 2011-2012 Executive Budget, which he said will eliminate a $10 billion deficit without tax increases or borrowing. Highlights include $307.8 million for the Division of Housing and Community Renewal, a figure that represents a 34 percent decrease from last year's budget; Cuomo said the reduction in part reflects the expiration of one-time American Recovery and Reinvestment Act funds and various program reductions. Funding for the state low-income housing tax credit program will remain at $4 million under the proposal. The budget also recommended consolidating the Neighborhood and Rural Preservation programs into a single program and cutting the programs' funding by half.

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The Arizona Department of Housing issued its final utility allowance guidelines for LIHTC properties. LIHTC properties must demonstrate that the utility allowance charged for a rent‐restricted unit complies with one of the methods described in the regulations to maintain compliance. The guidelines, which are effective immediately, can be found online at www.taxcredithousing.com.

PEOPLE IN THE INDUSTRY

New York City Department of Housing Preservation and Development (HPD) Commissioner Rafael E. Cestero resigned from HPD to become managing director of L+M Development Partners, The New York Times reported. He will focus on creating housing in New Jersey and on the Gulf and West coasts. Cestero has worked in the housing industry for 21 years. At the time of this writing, HPD had not yet named his replacement.

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Cindy Chetti has been named senior vice president of government affairs for the National Multi Housing Council (NMHC). She will be responsible for developing and implementing strategy for all legislative and regulatory issues of interest to NMHC and its joint legislative partner, the National Apartment Association. Chetti, who most recently served as the House Financial Services Committee's lead housing policy expert, brings more than 20 years of legislative experience to NMHC. She served for 10 years as a member of the senior professional staff for the Committee's Republicans, and prior to that she served in a similar capacity for the Committee's Financial Services and Consumer Credit subcommittee. Chetti holds a bachelor's degree from Virginia Polytechnic University. She replaces Jim Arbury, who is stepping down to focus on expanding NMHC's student housing initiative.

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Members of the National Association of Home Builders (NAHB) elected four senior officers to top leadership positions. Bob Nielsen, president of Shelter Properties in Reno, Nev., was selected as chairman of the board. Nielsen was part of NAHB's effort to strengthen the residential construction industry in response to the economic downturn, working with the banking industry and its regulators to restore the flow of credit to builders for sound projects. Barry Rutenberg, president of Barry Rutenberg and Associates Inc. in Gainesville, Fla., was elected first vice chairman of the board. Rutenberg has more than 35 years of experience in the housing industry and has developed more than a dozen communities in the Gainesville area. Rick Judson, owner of the Charlotte, N.C.-based Evergreen Development Group, was elected to the post of second vice chairman. Kevin Kelly, a Delaware-based builder and developer with Leon Weiner & Associates, will serve as third vice chairman. Bob Jones, president of Robert R. Jones Homes, will remain on the leadership ladder as immediate past president.

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Minnesota Gov. Mark Dayton selected Mary Tingerthal to head the Minnesota Housing Finance Agency (MHFA) as acting commissioner. Tingerthal, president of Capital Markets Companies for the Housing Partnership Network, has both public and private sector experience, and helped establish the National Community Stabilization Trust, a nationwide company dedicated to helping local organizations return vacant and foreclosed properties to productive use.

BONDS

MassDevelopment issued a $10.8 million tax-exempt bond on behalf of Heritage 195 Pleasant Street LLC, which will use the bond proceeds to purchase and renovate a 176-unit, 10-story affordable senior community in downtown Malden, Mass. The bond financing will preserve 156 units of affordable housing for seniors earning less than 60 percent of the area median income. Renovations for the Heritage Apartments will include converting studios to one-bedroom units, repairing balconies, upgrading the heating system, and installing energy-efficient windows and appliances. In addition to the bond, which was purchased by Wainwright Bank, MassDevelopment and the Department of Housing and Community Development approved an allocation of LIHTCs to generate $3.3 million in equity for the property. In a separate announcement, MassDevelopment issued a $3.2 million bond for Bowdoin Manor LLC, a single-room occupancy housing facility in Boston. Bowdoin will use the bond proceeds to preserve the affordability of all 115 units and perform various upgrades and improvements.

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The Treasury Department is instituting a series of data collection requirements to be completed by housing finance agencies (HFAs) that participated in the New Issue Bond Program and Temporary Credit and Liquidity Program. The data is to be furnished to the Treasury by GSEs. Treasury is seeking comments on the proposed information collection by March 21. See the January 19 Federal Register notice for more information.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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