Low-Income Housing Tax Credits News Briefs - March 2013

Friday, March 1, 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

The Office of the Comptroller of the Currency (OCC) revised, effective Jan. 1, the asset-size thresholds used to define “small bank,” “savings association,” “intermediate small bank” and “intermediate small savings association” for purposes of the Community Reinvestment Act (CRA). The thresholds are based on the annual percentage change in the consumer price index for urban wage earners and clerical workers (CPI-W). The CPI-W increased by 2.23 percent during the period ending November 2012. The OCC then adjusted the thresholds to reflect the increased CPI-W. An institution with less than $1.186 billion as of Dec. 31, in either of the prior two calendar years, is considered a “small bank” or “small savings association.” A small bank or small savings association with assets between $296 million and $1.186 billion is considered an “intermediate small bank” or “intermediate small savings association.” More information is available at www.occ.gov.

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On Dec. 18, the National Multi Housing Council (NMHC) and the National Apartment Association (NAA) testified before a congressional subcommittee on tax incentives that promote energy efficiency. NMHC and NAA argued that many rental properties built before the 1990s, the decade in which the first building energy codes were mandated, haven’t been able to take full advantage of energy tax incentives like the commercial building tax credit because it’s often technically or financially unfeasible for older developments to meet high energy standards required. NMHC and NAA advocated for future legislation that would include a predictable tax credit available for at least 10 years and that would leverage private investment capital in qualified building retrofits.

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NMHC and NAA announced they will continue to operate their joint legislative program for another five years. For two decades, the program has advocated legislative and regulatory policies that support the development and preservation of quality, affordable rental homes.

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In January, the National Association of Home Builders (NAHB) announced the winners of the National Green Building Awards during its International Builders’ Show in Las Vegas. The annual awards honor individuals, companies and organizations for excellence in residential green design, practices and advocacy efforts. Seabourn Cove in Boynton Beach, Fla. received the award for multifamily project of the year. Dan Wise of Wise Construction in Boalsburg, Pa. won for builder advocate of the year. Paul Sullivan of The Sullivan Company Inc. in Newton, Mass. won for remodeler advocate of the year. Drew Smith of Two Trails in Sarasota, Fla. won for individual advocate of the year. Maryland Residential Green Building Council won for group advocate of the year. Build San Antonio Green won for state/local government advocate of the year. A complete list of winners is available at www.nahb.org.

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Panelists at the NAHB International Builders’ Show reported that the multifamily market has been recovering substantially since 2010 and will continue to lead recovery of the housing market overall. The multifamily sector now stands about 70 percent of the way back to a sustainable level. Experts estimated that nearly 300,000 multifamily residences will be built in 2013, but the number still falls below the 350,000 units needed to keep supply and demand in balance. Challenges to development include lack of sufficient capital and increasing material and labor costs.

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The newest edition of the ICC 700 National Green Building Standard (NGBS) was released during the International Builders’ Show in January. The NGBS is the basis of many programs that allows builders to certify new homes and remodeling projects that meet certain energy efficiency criteria. The new edition of NGBS brings a minimum 15 percent increase in energy efficiency. It expands remodeling criteria, making it possible to certify certain kitchen, bathroom and basement renovations less than 400 square feet. It also provides an incentive for choosing lots in green communities. More information is available at www.nahb.org.

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DEALMAKERS

AEGON USA Realty Advisors LLC, an affiliate of AEGON Community Investments (AEGON), announced the closure of a $65 million guaranteed tax credit fund with Microsoft Corporation. The Garnet LIHTC Fund XXXV LLC will own a portfolio of LIHTC properties across the country. AEGON will oversee the fund and manage the assets. To date, AEGON has invested nearly $3 billion in more than 120,000 units of affordable housing.

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Boston Capital announced the closing of its $150 million Boston Capital Tax Credit Fund XXXVI. The fund includes a portfolio of nearly 2,500 units in 22 affordable housing properties across 15 states. Fund XXXVI will create 1,220 local jobs and nearly $95 million in local income.

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U.S. Bank and developer McCormack Baron Salazar announced the close of financing for the second phase of the North Sarah Apartments mixed-use, mixed-income development in St. Louis. The recent closing of $22 million in funding includes an $11.5 million construction loan, a $1.6 million first mortgage, a $1.8 million Affordable Housing Assistance Program (AHAP) donation and more than $7 million in low-income housing tax credits (LIHTCs). U.S. Bank’s subsidiary U.S Bancorp Community Development Corporation provided the LIHTC equity. The U.S. Department of Housing and Urban Development (HUD) and the St. Louis Housing Authority provided $18.27 million through a $7.86 million HOPE VI grant and other programs. The second phase of North Sarah Apartments will include constructing 103 mixed-income housing units in 10 buildings. It is scheduled to open in 2014. The first phase opened in October and consisted of 120 housing units, 7,000 square feet of commercial and retail space and nearly 5,000 square feet in management and community space.

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Avesta Housing received the U.S. Green Building Council’s 2012 LEED for Homes Outstanding Affordable Developer award for Oak Street Lofts, a LIHTC property in Portland, Maine. It is the first affordable housing development in the state to receive a LEED Platinum certification. The 37-unit multifamily building features solar panels that heat up to 60 percent of its hot water annually, condensing boilers that provide up to 93 percent efficiency and an air recovery ventilation system that recovers 76 percent of energy in the air exhaust and transfers it to the air supply stream. Oak Street uses locally sourced and low volatile organic compound building materials, low-flow plumbing, LED lights and CFL lighting on motion sensors. The units are 40 percent more energy efficient than the average multifamily unit.

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Eden Housing hosted a groundbreaking ceremony in January for Orinda Senior Apartments in Orinda, Calif. The 67-unit apartment community will be available to seniors earning at or below 30 to 50 percent of the area median income (AMI). Amenities include on-site management offices, a large community room and kitchen, an exercise room, a library and computer learning center, laundry facilities, a large courtyard and a community garden. Funding partners include the City of Orinda, the Contra Costa County Department of Conservation and Development, Union Bank, Housing Authority of Contra Costa County and the Ernest and Lola Poll Trust.

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Centerline Capital Group provided a $4 million Freddie Mac early rate-lock loan to refinance 55 Hudson Street, a cooperative multifamily property in the Tribeca area of New York City. The transaction is the first one funded through Freddie Mac’s new cooperative early rate-lock program. The 10-story, 34-unit building was originally a commercial warehouse in 1890 and was converted to residential use in the 1980s. The borrower is Tribeca Owners Corporation and the property is managed by Cooper Square Realty Inc.

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The Guam Housing and Urban Renewal Authority (GHURA) and CoreTech International hosted a groundbreaking ceremony for Summer Green Residence, a new, 72-unit affordable housing development in Tamuning. The $28.1 million low-rise apartments will receive more than $3.3 million in LIHTC. The site will consist of four buildings with units containing a dishwasher, refrigerator, stove and a washer/dryer. Residents will have access to a community gym. Construction is slated for completion in 2014.

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Boston Capital announced its investment in the rehabilitation of two multifamily apartment communities for seniors in West Virginia. Lowe Gardens Apartments in Shepherdstown features 24 units with central air conditioning, ceiling fans and Energy Star appliances. Community amenities include laundry facilities and a community room with a kitchen and patio. Tucker Manor Apartments in Parsons features 30 units with patios or balconies, central air conditioning, emergency call buttons, ceiling fans and Energy Star appliances. Community amenities include laundry facilities and a community room with a kitchen and elevator. Both properties will be available to seniors over the age of 62 who earn 60 percent or less of the AMI. General partners include T.M. Associates Inc. and Telamon Corporation. Rehabilitation of both properties will generate $1.6 million in local income and will create 20 local jobs.

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Centerline Capital Group provided more than $4 million in a Fannie Mae affordable preservation loan to refinance senior housing in Stoughton, Wis. Rosewood Apartments consists of 90 units in two connected three-story buildings. It has 94 parking spaces, six laundry facilities, a large community room, business center, kitchen, library and central mailbox. The property is outside the 15-year tax credit compliance period, but is still within the 15-year extended use compliance period. Part of the refinancing proceeds will pay off existing hard debt and unsecured debt held by Centerline.

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HUD has approved Arbor Commercial Mortgage LLC to participate in its LIHTC pilot program, which was launched in early 2012 to streamline the approval process for mortgage loans on LIHTC properties insured by the Federal Housing Administration. It allows for closings within 90 days, increases the amount of repairs and rehabilitation allowed under Section 223(f) and establishes a separate application platform and processing track for Section 223(f).

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EAH Housing received a $40,000 grant from the JPMorgan Chase Foundation to preserve affordable housing across 41 municipalities in California. The grant will support the EAH Housing Stewardship Program, which assists owners with management, rehabilitation and permanent preservation of their affordable housing properties. When the program started in 2010, it worked with California Housing Partnership Corporation to compile a database of more than 6,000 at-risk affordable housing communities facing compliance, maintenance and financing challenges. EAH Housing has worked with more than 60 organizations to preserve affordable housing.

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STATE BRIEFS

The North Carolina Housing Finance Agency (NCHFA) posted on its web site two lists of the 150 preliminary applications it received for the 2013 housing credit cycle. The first list contains basic project information and is sorted by county then city. The second list details rental production program (RPP) loans and housing credits requested. It is sorted by self-score and credits per unit. More information is available at www.nchfa.com.

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Utah Housing Corporation announced awardees of its 2013 round for competitive federal low-income housing tax credits (LIHTCs). Utah Housing awarded $6.1 million in tax credits to 14 developments out of $11.6 million requested by 24 applicants. The tax credits are expected to raise more than $59 million in equity investments. The awarded developments will create $70 million in construction activity and 1,600 jobs during the construction period. A full list of awardees is available at www.taxcredithousing.com.

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The Missouri Housing Development Commission awarded $1.1 million in state LIHTCs for the renovation of the St. Regis Hotel in Kansas City, Mo. Built in 1915 as senior housing, the 85-unit building is still occupied but has not undergone renovation in 20 years. The $13.5 million restoration will include complete repair of all major systems. Construction work is scheduled to begin this summer.

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Maryland Gov. Martin O’Malley announced $25 million in support of Rental Housing Works (RHW) as part of his proposed fiscal year (FY) 2014 capital budget. The investment is an increase from the $17.5 million invested in the program in FY 2013. RHW was launched last year to create jobs and preserve affordable housing for developments funded through the state’s multifamily bond and 4 percent LIHTC programs. The investment will preserve more than 1,100 new affordable multifamily units and will create 1,900 jobs.

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In January, Massachusetts Gov. Deval Patrick filed legislation that will consolidate the state’s 240 housing authorities into six regional housing authorities (RHAs). Each RHA will have its own executive director, governing board, central and regional management staff and local site managers. The legislation allows communities to retain control over land use and significant redevelopment decisions. The new system will be implemented July 2014. The Massachusetts chapter of the National Association of Housing & Redevelopment Officials (MassNAHRO), which represents the state’s local housing authorities, announced a counterproposal to Gov. Patrick’s plan that it said will promote greater cost efficiency without eliminating local control. The MassNAHRO reform plan includes provisions for tools to identify troubled housing authorities, mandatory annual independent public audits and a revised method for capital funds delivery.

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On Jan. 16, the Wisconsin Housing and Economic Development Authority (WHEDA) announced the removal of a requirement in its 2013 qualified allocation plan (QAP) mandating LIHTC applicants to provide high-speed Internet service to all units. The requirement was originally listed in Appendix M of WHEDA’s QAP. WHEDA said this practice is recommended but no longer required in 2013. The updated appendix can be found at www.taxcredithousing.com.

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A recent study released by Iowa Finance Authority (IFA) found a great demand for rental housing in the state. It also recommended greater flexibility and control of housing issues at the local level, including collaborations with local nonprofit service providers. The report found that the LIHTC is often the only means of support for multifamily housing development and that additional state-funded programs are necessary to meeting the growing housing demand. A copy of the study can be found at www.taxcredithousing.com.

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GHURA has drafted a new 2013 QAP that will award more points to affordable housing developments in Guam that cater to seniors and residents with special needs. Another amendment to the QAP requires those with developments in progress to have completed 70 percent of construction before applying for a new development. GHURA will award $3.3 million in credits for 2013 by July.

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The Virginia Housing Development Authority (VHDA) announced a reorganization of its staff. Toni Ostrowski was promoted to assistant director for single family originations and will report to Michelle Watson. The program compliance and asset management groups were merged and Neal Rogers became director. The risk management and organizational performance measurement functions were moved to the audit division. Judson McKellar will be the temporary deputy for legal and finance and Don Ritenour will be the temporary deputy for programs over multifamily rental housing, community outreach and single family homeownership. Paul Brennan was promoted to general counsel and Art Bowen is now the managing director of rental housing. Tom Dolce is the director of the single family servicing department and the managing director of homeownership until his scheduled retirement in June. John Hastings will retire in the fall as the director of multifamily originations. VHDA is recruiting to fill open positions within the next few months. Organizational changes went into effect Feb. 20.

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PEOPLE IN THE INDUSTRY

The Federal Housing Finance Agency (FHFA) announced the appointment of Sandra Thompson as deputy director of the division of housing mission and goals. She will oversee the agency’s housing and regulatory policy, financial analysis, policy research and analysis of housing finance and financial markets. Thompson was most recently the director of the division of risk management supervision at the Federal Deposit Insurance Corporation (FDIC). She is a graduate of Howard University in Washington, D.C. and will join the agency this month. FHFA also announced the appointment of Nina Nichols to the position of deputy director of the division of supervision policy and support. She was formerly the assistant deputy director of the division of Enterprise regulation at FHFA. Nichols graduated from Yale University and holds a J.D. from Harvard Law School. She assumed her new position in January.

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Indiana Gov. Mike Pence named Jacob Sipe as the new executive director of the Indiana Housing & Community Development Authority (IHCDA). Sipe has been with IHCDA since 1999 and was previously the chief real estate officer and director of production. Sipe has served as interim executive director since former executive director Sherry Seiwart stepped down in July 2012.

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The OCC named Amy Friend as its new chief counsel. Friend was a former assistant chief counsel at the OCC and left in 2008 to become chief counsel to the Senate Committee on Banking, Housing and Urban Affairs. She joined Promontory Financial Group in 2011 as managing director. Friend received a B.A. in psychology from the University of Pennsylvania and a J.D. from Georgetown University Law Center.

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New Hampshire Housing Finance Authority announced that Pauline Ikawa was appointed to its board of directors by the governor and confirmed by the executive council. Ikawa is vice president and Community Reinvestment Act (CRA) administration manager for TD Bank N.A. She specializes in oversight and monitoring of departmental governance, policies and procedures. She holds the designation of certified regulatory compliance manger (CRCM) and will serve on New Hampshire Housing’s board until July 2016. New Hampshire Housing also announced the appointment of John A. (Jac) Cuddy to its board of directors. Cuddy is president of the Mount Washington Valley Technology Village and executive director of the Mount Washington Valley Economic Council. He is a graduate of St. Anselm’s College and the school of banking at the University of Wisconsin.

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Raymond James Financial Inc. announced that executive vice president and director of investments Steve Kropf was appointed president of Raymond James Tax Credit Funds (RJTCF). Ron Diner, RJTCF’s previous president, will serve as executive chairman. Diner joined Raymond James Financial in 1983 and started RJTCF in 1986. Kropf was a senior manager in the financial advisory services practice at PricewaterhouseCoopers before joining RJTCF in 2000.

Journal Category: 
Low-Income Housing Tax Credit