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Low-Income Housing Tax Credits News Briefs - March 2012

AFFORDABLE HOUSING INDUSTRY BRIEFS

The U.S. Department of Agriculture (USDA) announced that $130 million is available for loan guarantees under the Section 538 Guaranteed Rural Rental Housing Program. The department published in February a notice of funding availability (NOFA) for fiscal year (FY) 2012. Eligible lenders may submit responses for new construction and rehabilitation of affordable rural rental housing. A complete application may be submitted with the response but it is not required. Selected responses that develop into complete applications and meet all eligibility requirements will receive conditional commitments until all funds are expended. The response deadline is 12 p.m. on December 31, 2012. See the February 6 Federal Register notice for more information.

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USDA Secretary Tom Vilsack announced a plan to increase efficiency in the agency's operations. The agency, under its new Blueprint for Stronger Service initiative, will close 259 domestic offices, facilities and labs across the country as well as seven foreign offices. The move is expected to provide efficiencies valued at $150 million annually. USDA plans to close 43 Rural Development division area and sub offices in 17 states and U.S. territories; 450 offices will remain. The agency is also moving toward centralized civil rights, human resource, procurement, and property management functions. Fact sheets on the initiative are available at www.usda.gov.

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The Office of the Comptroller of the Currency (OCC) is seeking comment on a proposed rule regarding annual stress tests. The proposed rule implements a Dodd-Frank Wall Street Reform and Consumer Protection Act provision that would require national banks and federal savings associations with total consolidated assets of more than $10 billion to conduct an annual stress test. Section 165(i)(2) of the Act requires certain companies to conduct these annual stress tests in accordance with the regulations prescribed by their respective primary financial regulatory agencies. In addition to the annual stress test requirement, these institutions would be subject to annual reporting and disclosure requirements. Comments will be accepted until March 26. Read the notice of proposed rulemaking in the January 24 Federal Register.

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Fannie Mae issued $7.2 billion in multifamily mortgage-backed securities (MBS) in the fourth quarter of 2011, the highest quarterly issuance since the company jumpstarted its MBS business in 2009. Total new issuance for 2011 was $23.8 billion, up from $16.4 billion in 2010. Freddie Mac reported that it transacted $20.3 billion in volume for its multifamily business in 2011, compared to $15.4 billion in 2010. The multifamily volume includes Freddie Mac's targeted affordable housing products, which finance apartments that receive some form of government subsidy. In total, Freddie Mac financed approximately 1,300 properties amounting to approximately 321,000 apartment units, most of which are affordable for moderate- or low-income families.

DEALMAKERS

Boston Capital provided LIHTC equity for the construction of Pearl Place II, a 54-unit multifamily development for families in Portland, Maine. The downtown five-story building will comprise 26 one-bedroom, 17 two-bedroom and 11 three-bedroom units. Pearl Place II will also feature a community room with a computer area, central laundry and on-site resident services. Units will be available to families earning 60 percent or less of the area median income (AMI). Approximately 11 units will be reserved for homeless or displaced residents. Pearl Place II will adjoin a 60-unit first phase, which is fully leased. The property's construction will generate $3.9 million in local income and create approximately 82 jobs.

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UnitedHealth Group invested $15 million to finance the construction of Connections Housing, a development in San Diego, Calif. that will provide permanent supportive housing to the region's homeless. The financing is part of UnitedHealth Group's partnership with Enterprise Community Investment that is intended to provide as much as $50 million to finance affordable housing using federal low-income housing or historic tax credit equity. The Connections Housing development includes acquiring, rehabilitating and converting the historic World Trade Center in downtown San Diego to create a permanent, year-round shelter and housing for homeless persons. The residential portion will consist of 73 studio units of permanent supportive housing, 16 transitional units and 134 additional transitional housing beds. Support resources will include a primary health-care clinic, a multiservice homeless center, a large commercial kitchen and dining facilities.

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Homeword held a grand opening for Solstice, the developer's ninth LIHTC development. The $5.6 million property in Missoula, Mont. includes 34 studio, one-bedroom and two-bedroom apartments; a commercial component called Confluence; and underground parking. Solstice is Montana's first combined commercial and affordable housing development to pursue LEED certification and the first to use both LIHTC and new markets tax credit financing.

STATE BRIEFS

The California Tax Credit Allocation Committee (CTCAC) in February finalized 16 regulation changes for program year 2012. The changes include a process for evaluating projects for extraordinarily high costs; consistent treatment of the developer fee in tax credit basis among all 4 percent projects, regardless of the presence of state credits; requiring disclosure in the executed letter of intent on all financial and other substantive benefits from the syndicator to the developer; and permitting developers of high-rise projects to return year one of credits and receive an equal amount of year two credits to afford more time for project completion. Read the adopted regulations on CTCAC's web site at www.treasurer.ca.gov.

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Maryland Gov. Martin O'Malley announced a $15 million housing initiative designed to support jobs and provide affordable housing. Called Rental Housing Works, the new initiative nearly doubles the amount of funding in the capital budget for rental housing. It is expected to fund as many as 20 affordable housing developments, create or retain more than 1,100 jobs and generate $36 million in state and local taxes over 15 years. The new housing will help address Maryland's affordable housing shortage, which it is estimated will reach 127,000 units by 2015.

PEOPLE IN THE INDUSTRY

The Louisiana Housing Corporation (LHC) board of directors at its first meeting selected an interim presiding officer and an interim president of the Louisiana Housing Finance Agency (LHFA). State Treasurer John Kennedy was elected as the interim presiding officer. Formal elections for board chairman and vice chairman will be held after the board approves its bylaws. Don Hutchinson was named the interim LHFA president, succeeding Alesia Wilkins-Braxton who stepped down in January. Hutchinson previously worked at the Louisiana Division of Administration Office of Community Development Disaster Recovery Unit.

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Rafael E. Cestero, former commissioner of the New York City Department of Housing Preservation and Development (HPD), was named president and CEO of the Community Preservation Corporation and its subsidiary, CPC Resources Inc. He succeeds Michael Lappin, who announced his retirement in November after leading the not-for-profit for 31 years. Cestero most recently held the position of managing director of L+M Development Partners after leaving HPD. Prior to his appointment as deputy commissioner, and later commissioner, he held key leadership positions at Enterprise Community Partners. Cestero received a master's degree in urban planning from the University of Illinois and his bachelor's degree from Cornell University.

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The New York City Housing Authority (NYCHA) appointed Frederick S. Harris as executive vice president for development. He served previously as senior vice president for development for AvalonBay Communities, where he spent 14 years overseeing the development of 5,330 apartments. According to a NYCHA press release, Harris' appointment will advance the organization's effort to develop mixed-use and mixed-income housing as part of its strategic Plan NYCHA. Before his work with AvalonBay, Harris served as vice president of the Trotwood Corporation and as the New York City Metropolitan Transit Authority's director of real estate. He holds a law degree from New York University and a master's in transportation planning and engineering from Polytechnic University.

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Alan Baer joined Eden Housing as its chief financial officer (CFO). In his new role, Baer will be responsible for Eden Housing's corporate and real estate development accounting, finance and asset management, and information technology operations. He gained more than 28 years of experience in finance, asset management, customer service and human resources from working in the real estate and hospitality industries. Baer served for eight years as a senior vice president for Kimpton Hotels & Restaurants, where he oversaw accounting, finance, treasury, partnership development and risk management functions. He also worked for nearly 20 years as the CFO of the Waterford Hotel group, and as senior vice president of finance and administration for Outrigger Lodging Services.

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LIHTC syndicator City Real Estate Advisors (CREA) announced the addition of three employees in its Indianapolis, Ind. office and one in its Austin, Texas office. Susan Calhoun will serve as asset manager in the Indianapolis office. She has an extensive LIHTC compliance background and will be working with the asset management department to closely monitor investments. John Sullivan was also added to the Indianapolis office in the role of vice president, account manager for the acquisitions department, and Matt Urbanski joined the Indianapolis office as assistant vice president of the credit and underwriting team. Urbanski has worked in the real estate development industry for more than 20 years. Teresa Shell assumed the role of senior acquisitions analyst in the firm's Austin, Texas office.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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