Low-Income Housing Tax Credits News Briefs - March 2014

Saturday, March 1, 2014

AFFORDABLE HOUSING INDUSTRY BRIEFS

On Nov. 12, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced the affordable housing properties that will receive grants through the USDA Rural Development (RD) Housing Preservation Grant program. Properties in 45 states, the western Pacific and the Common Wealth of Puerto Rico will receive grants ranging from $12,000 to $100,000. Grants may be used for general repairs including but not limited to installing or improving plumbing, providing access for people with disabilities and making homes more energy efficient.

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On Jan. 10, the Federal Housing Finance Agency (FHFA) announced the annual adjustment of the cap on average total assets that defines community financial institutions (CFI). The CFI asset cap for 2014 is $1.18 million, previously $1.095 million. Changes took effect Jan. 1.

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The Housing Assistance Council (HAC), a nonprofit corporation that supports the development of rural low-income housing nationwide, released its USDA RD Housing Obligations Fiscal Year (FY) 2013 Year-End Report in January 2014. The report covers rural single-family and multifamily housing programs, provides a summary of housing obligations, provides information on Section 502 for individual states and describes activity for state programs. The report found that in FY 2013, RD provided approximately $23.4 billion in loans, grants and loan guarantees that were used to build, purchase, repair or support nearly 200,000 units of affordable housing for low- and moderate-income families in rural areas. The report is available at www.taxcredithousing.com.

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During the February National Association of Home Builders (NAHB) International Builders’ Show (IBS) in Las Vegas, NAHB panelists stated that there is a strong demand for apartments and that will increase over the next several years. David Crowe, NAHB chief economist, said at the event that the multifamily market has rebounded significantly from a low point in 2009 at 82,000 multifamily housing starts to 340,000 in 2013. He added that NAHB is forecasting 363,000 multifamily housing starts in 2015. He said the strong demand for apartments is because of a rising demographic of echo boomers that will continue to grow in size, and that young adults increased the number of households that rent rather than own, and that will likely continue until jobs are more secure, mortgages more accessible and careers more stable.

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STATE BRIEFS

Colorado H.B. 14-1017, introduced on Jan. 8, would expand the availability of affordable housing in the state and would make modifications to establish the Housing Investment Trust Fund, the Housing Development Grant Fund and a new section of the state LIHTC. In addition to the existing state LIHTC, the bill adds two new requirements. For qualified developments containing 100 or more total residential units, at least 10 percent of the residential units in the development must be occupied by qualified residents. For developments containing less than 100 total residential units, at least 15 percent of the total number of residential units in the development must be occupied by qualified residents. HB 14-1017 would also expand affordable housing opportunities by increasing the allocation amount to $250,000, or 20 percent of the balance of moneys in the fund calculated as of July 1 of any fiscal year. Limitations on entities allowed to borrow money from the fund would also be removed, and the bill would clarify that the Division of Housing can make loan guarantees as well as loans. H.B. 14-1017 is available at www.taxcredithousing.com.

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N.Y. Gov. Andrew M. Cuomo proposed a $100 million investment towards building and preserving 3,000 affordable housing units in multifamily developments. The proposal was announced in his FY 2014 agenda, released Jan. 8. More than 3,500 new construction jobs are expected to be created because of the investment. And, on Jan. 21, Cuomo released the 2014-2015 executive budget, which included additional information about the proposal. Under the proposal, $100 million in storm recovery funds will be allocated to affordable housing by the New York State Association for Affordable Housing (NYSAFAH). The budget included a $2 million increase to $9 million for Homes for Working Families, a $9 million increase to $44.2 million for the Low Income Housing Trust and a $1.4 million increase to $6.75 million for the Community Investment Fund.

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The Delaware State Housing Authority (DSHA) announced on Jan. 14 that the 2014 LIHTC qualified allocation plan (QAP) was approved. LIHTC applications must be submitted no later than 3 p.m. April 30. The 2014 Delaware QAP and related documents are available at www.taxcredithousing.com.

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Based on clarification and additional guidance from the U.S. Department of Housing and Urban Development (HUD) regarding HUD’s HOME program final rule, the Ohio Housing Finance Agency (OHFA) announced Jan. 31 that it will only award HOME funds to community housing development organization (CHDO)-eligible developments. This change is expected to affect the outcome of applications submitted for HOME funds in the 2014 LIHTC round. In the announcement, OHFA said that to qualify, the general partnership interest must be 100 percent owned by the CHDO or it must be a 100 percent managing member to qualify for HOME funds. OHFA will not issue an amendment for the scoring criteria for CHDOs. Points will still be awarded to applications where CHDOs are 51 percent owners/managing members. At press time, OHFA was arranging for a public forum to discuss the new rules.

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The North Carolina Housing Finance Agency (NCHFA) announced on Jan. 24 that it received 152 preliminary applications in the 2014 LIHTC cycle. Applications were received from 56 counties and NCHFA anticipates funding between 35 and 40 developments in FY 2014. NCHFA published two lists of applications. The first includes basic development information and is sorted by county, then city. The second list indicates the estimated amount of LIHTCs available for each region. NCHFA also anticipates awarding approximately $15.5 million in rental production program (RPP) funds. Details are available at www.taxcredithousing.com.

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The Minnesota Housing Finance Agency held a hearing Feb. 20 regarding the draft of the proposed amended 2014/2015 QAP. The amended QAP would provide clarification on areas that created confusion during round one, and would apply only to 2015 round one and two LIHTCs. At press time, it was expected that the 2016 QAP would be published by Feb. 27, with a tentative hearing scheduled for March 20. The notice and the proposed amended 2014/2015 QAP are available at www.taxcredithousing.com.

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The California Tax Credit Allocation Committee (CTCAC) announced on Jan. 29 that the final proposed regulation changes for 2014 were adopted. Changes include the removal of the final reservation submittal requirement as required by CTCAC regulations. The adopted changes are retroactive to both 2012 and 2013 9 percent competitive LIHTC recipients. The regulations are available at www.taxcredithousing.com.

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On Jan. 31, Ohio Capital Corporation for Housing (OCCH) announced the creation of the Ohio Capital Impact Corporation (OCIC). This new 501(c)(3) nonprofit affiliate will administer funding designed to benefit neighborhoods and residents of those neighborhoods where OCCH has invested in affordable housing. The OCIC will focus on residents through the Carol Mount Peterson Resident Development Fund, neighborhoods through the Place-Based Strategies Fund, and partners through the Capital for Partners Program and Community Properties Impact Fund.

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On Jan. 28, the Kentucky Housing Corporation (KHC) announced the winners of the 2013 LIHTC application round. KHC received 50 applications requesting more than $30 million in LIHTCs. KHC funded 20 developments with more than $10 million in LIHTCs. KHC resources from the HOME Investment Partnerships program and the Affordable Housing Trust Fund also provided more than $4 million. KHC also received 10 applications requesting more than $4 million in non-credit resources. Of these, six developments were funded with nearly $3 million of KHC’s resources. A total of 986 units of affordable housing in 21 counties were funded. Listings of funding awards are available at www.taxcredithousing.com.

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DEALMAKERS

Project Freedom Inc. received a $442,500 affordable housing program (AHP) grant from the Federal Home Loan Bank of New York on Jan. 15. The grant will be used to construct Freedom Village at Toms River, a 72-unit affordable rental housing community on 10 acres in Toms River, N.J. The units are available to low- and very low-income residents. Additional financing was provided by the National Equity Fund, federal LIHTCs, the New Jersey Mortgage and Housing Finance Agency Fund for Restoration of Multifamily Housing, the Sandy Special Needs Housing Fund Community Development Block Grant program, TD Bank and Toms River Affordable Housing Funds.

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The Pilipino Workers Center and the Little Tokyo Service Center (LTSC) Community Development Corporation joined for the grand opening of the Larry Itliong Village on Dec. 13 in Los Angeles. Financed by Bank of America with $9 million in a tax credit equity investment, the affordable housing development will have 45 affordable units available for residents earning between 30 and 50 percent of area median income (AMI). The property will reserve nine units for transition-aged youth and 22 units for homeless individuals. The development will also provide assistance in accessing affordable health care, immigration-related case management services and job skills workshops. The Larry Itliong Village was also financed with a $6 million construction loan and a $2.25 million permanent loan. A $200,000 Brownfield Cleanup grant from the Environmental Protection agency was used to cap underground petroleum tanks and remove contaminated soil.

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St. Martin’s Place, an affordable housing community in Miami, received more than $24 million in LIHTC financing from U.S. Bank in late January. The multifamily apartment complex will be 12 stories and have 94 one-, two- and three-bedroom units. Half of the housing units will be reserved for formerly homeless individuals. Amenities will include a library and computer lab. St. Martin’s Place will be built on an urban infill site and is expected to open in mid-2015.

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In late January, U.S. Bancorp Community Development Corporation provided $17.5 million in LIHTCs to Chinook Wind Apartments. The senior housing development, located in Greely, Colo., will provide 60 units to seniors age 55 and older. Of these 60 units, 12 will be wheelchair accessible. Amenities include a library, lounge, business center, computer lab and exercise facilities. Chinook Wind Apartments also received LIHTCs from the Colorado Housing and Finance Authority. Construction is expected to be completed by the end of 2014.

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A grand opening celebration for 2 Haciendas Place was held Jan. 31. The multifamily affordable housing development is located in Salinas, Calif. There are 160 units, all energy efficient, and the units are available to families earning up to 60 percent of AMI. Amenities include two children’s play areas, a computer lab, property management offices and a community center built on a 2.46 acre site. Development totaled more than $18 million. 2 Haciendas was developed by the Monterey County Housing Authority Development Corporation (HDC) and was funded with LIHTCs, a permanent loan, city HOME funds, city deferred impact and processing fees and HDC seller financing and HDC funds.

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Dominium announced in late January the development of Legacy at Silver Lake Village, a senior housing facility in St. Anthony, Minn. The four-story building will provide 169 units to seniors earning up to 60 percent of AMI. Amenities will include a cards and crafts room, theater, library, salon and underground parking. Construction is expected to be completed by mid-2015.

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PEOPLE IN THE INDUSTRY

On Jan. 8, Lancaster Pollard announced that Michelle (Shelly) A. Harvey has been appointed chairperson of the Mortgage Bankers Association (MBA) Multifamily Council’s Federal Housing Administration Services Subcommittee. Harvey, Lancaster Pollard’s vice president and servicing manager, has led the mortgage servicing department for construction and permanent loans since 2001. She has served on the subcommittee for the past 10 years and will serve as chairperson for one year. MBA is the national association representing the real estate finance industry. The council is a policy-making body on multifamily finance issues. It identifies issues and provides a discussion forum for member firms involved in multifamily finance executions.

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Centerline Capital Group, a provider of real estate mortgage services for conventional and affordable multifamily housing, announced Jan. 13 the promotion of Darrell Clark to regional director for the western region. His responsibilities will include originating Fannie Mae Small Loan transactions in California and Arizona. Clark worked as a senior underwriter for Centerline, joining the company in 2010. He then moved to deputy chief underwriter in 2012. Before Centerline, Clark worked for Greystone, a multifamily mortgage lender. He will be based in the Irvine, Calif. office.

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On Jan. 14, Mercy Housing, a nonprofit affordable housing organization, announced that Sister Lillian Murphy, CEO, will retire in June. Murphy became CEO in 1987. Prior to joining Mercy Housing, Murphy worked in the health care field. She currently serves on the boards of the National Housing Trust and the editorial advisory board of Affordable Housing Finance magazine. She was previously a member of the Affordable Housing Advisory Council for the Federal Home Loan Bank and the Fannie Mae National Housing Advisory Council. Mercy Housing selected current president Jane Graf as the new CEO. Graf has been president since January 2013, and was previously Mercy Housing’s chief operating officer. Her appointment will be effective July 1.

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Hal Keller was selected to serve a second term as director of the Federal Reserve Bank of Cleveland. Keller, president of OCCH, first joined the board in May 2011. He began working for OCCH in 1993 as director of development. Keller is on the boards of the Affordable Housing Trust for Columbus and Franklin County, the Ohio Housing Council and the National Association of Affordable Housing Lenders.

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The North Dakota Housing Finance Agency (NDHTA) appointed Jennifer Henderson to lead its planning and housing development division. Henderson will be responsible for overseeing the division’s work, for providing community leaders and housing developers with technical and financial assistance and for working on development strategies. Prior to joining the agency, she was a housing outreach officer within the division. Before working with NDHFA, Henderson was a compliance review officer at American Bank Center.

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Bryan Cave LLP, a law firm specializing in business and entrepreneurship, selected Megan Palmer to join the Washington, D.C., office as an associate. Palmer will be in the tax advice and controversy group, with her focus on historic, new markets, low-income housing and energy tax credit-advantaged real estate transactions. Prior to joining Bryan Cave, she worked as a staff attorney in the housing development unit of the Legal Aid Society. She is also a board member of both the Hill Center and the DC Preservation League.

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On Feb. 5, Nixon Peabody announced the appointment of Rajesh Bandla to the firm’s newest tax credit finance and syndication practice in New York City. Bandla will focus on LIHTCs. Previously, he was an associate with Proskauer Rose LLP, an international corporate finance firm, and prior to that, he worked at Invest Detroit, an organization that promotes economic development within the city of Detroit.

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BOND

Mission Hill Neighborhood Housing Services Inc., a nonprofit housing and economic development organization, received an $8.5 million tax-exempt bond from MassDevelopment in January for the construction of a 40-unit rental housing facility in Boston. The Roxbury Crossing Senior Building Limited Partnership will be an affordable housing development for seniors age 62 and older. The building will comprise four stories and will have one-bedroom units, all affordable. Of the 40 units, 20 units will be reserved for households earning no more than 30 percent of AMI and 19 units will be reserved for households earning no more than 50 percent of AMI. The Massachusetts Department of Housing and Community Development provided $5.4 million in federal LIHTCs. This property is the first phase of a revitalization plan sponsored by Mission Hill Neighborhood Services.