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Low-Income Housing Tax Credits News Briefs - March 2016

Industry Briefs

The Office of Inspector General (OIG), Department of the Treasury released the audit report, OIG-16-026 Domestic Assistance Recovery Act: Audit of North Dakota Housing Finance Agency’s Payment Under 1602 Program, on Jan. 5. As part of its ongoing oversight of the Department of the Treasury’s payments to states for low-income housing properties in lieu of low-income housing tax credits (LIHTCs) for 2009, OIG conducted an audit of awards made to the North Dakota Housing Finance Agency (NDHFA). OIG found that NDHFA complied with Treasury’s program terms and conditions, and that NDHFA met the applicable requirements for receiving its $7.4 million award, as well as requirements for sub-awarding funds to eligible low-income housing developments. The audit report is available at www.taxcredithousing.com.

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On Jan. 27, R4 Capital, a national affordable housing tax-credit syndicator and asset manager, announced the launch of R4 Capital Funding. The new business is a tax-exempt debt platform that provides mortgage capital for affordable multifamily housing properties throughout the United States. R4 Capital Funding will provide mortgage capital by originating, structuring, acquiring and securitizing tax-exempt mortgage revenue bonds issued by state and/or local housing agencies and authorities. This will be used to finance the new construction or acquisition/rehabilitation of affordable multifamily housing properties. In addition, R4 Capital Funding will provide offer a direct purchase bond program.

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The National Affordable Housing Management Association (NAHMA) announced Jan. 22 the winners of its annual Industry and Affordable Housing Management Association Awards. The award winners includes both individuals and organizations whose professionalism, dedication and accomplishments in assuring quality housing for low-income Americans raises the standards of the multifamily affordable housing industry. The awards ceremony was scheduled to take place March 7 in Washington, D.C. The complete list of winners is available at www.nahma.org.

State

On Feb. 4, the North Dakota Department of Revenue released a new issue of its Income Tax Newsletter announcing the North Dakota Housing Incentive Fund was extended two years, making it available for the 2015 and 2016 tax years. The maximum amount of credits allowed under the program for the 2015 and 2016 tax years is $30 million and, if a contributor is unable to use the entire credit in the tax year in which the contribution was made, any unused credit may be carried over and used on subsequent tax years’ returns for up to 10 years. The extension was effective Jan. 1.

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On Jan. 28, MassHousing announced its new Construction Contract Financing program, which will aid minority- and women-owned subcontractors in building capacity and obtaining work. Companies that successfully apply for funds from MassHousing’s new Construction Contract Financing program can borrow between $25,000 and $200,000. Financing can be used to advance material and labor costs that will help these subcontractors obtain work on housing construction developments financed by MassHousing. MassHousing has provided $1 million for the pilot program and partnered with the Massachusetts Growth Capital Corporation (MGCC), which will process applications and administer the program.

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The Michigan State Housing Development Authority (MSHDA) announced Feb. 1 more than $11.7 million in low-income housing tax credit (LIHTC) reservations for the construction or rehabilitation of 18 developments located throughout the state. The developments will provide 1,077 affordable housing units. Awards ranged from $127,480 to Meadow Park in Big Rapids, to $1.49 million to Jefferson Oaks, in Oak Park.

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On Jan. 28, the (San Francisco) Bay Area Rapid Transit (BART) board of directors voted 6-3 to adopt a policy that requires that 20 percent of all housing developed on BART land must be affordable to very low and low-income households. To qualify, properties must cumulatively have 20 percent of the units be reserved as affordable units at each station where new housing is built. Properties at BART locations will include Marea Alta at the San Leandro station, a 115-unit apartment home property for families. There will also be Mural, a 90-unit rental apartment property at MacArthur station in Oakland. Mandela Gateway will be located near the West Oakland BART Station and will provide 168 new affordable rental apartments.

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On Jan. 11, the Ohio Housing Finance Agency (OHFA) released an updated Frequently Asked Questions (FAQ) document for the 2016-2017 LIHTC program. The FAQ is available for review by applicants intending to submit applications in the 2016 LIHTC round.  Answers have been organized by topic and new updates to the FAQ are shaded for clarity and ease of identification. Applicants may continue to submit 2016-17 QAP questions. The FAQ is available at www.taxcredithousing.com.

Dealmakers

Evergreen Real Estate Services announced Dec. 17 the completion of Sangamon Terrace in Chicago. Developers received $4.3 million through the U.S. Department of Housing and Urban Development’s (HUD) Section 202 program. Funding also included $3.1 million in low-income housing tax credits (LIHTCs) administered by the Illinois Housing Development Authority (IHDA) and $1.4 million through a city of Chicago HOME loan. Construction costs totaled $8.8 million. The four-story affordable senior housing complex will provide 24 units to seniors 62 and older. Amenities include a community room and laundry facilities. Sangamon Terrace is connected by a ground-level corridor to the 123-unit Bethel Terrace, an existing senior housing community.

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On Dec. 4, Rise Community Development received $625,000 in federal LIHTCs and $625,000 in state LIHTCs from the Missouri Housing Development Commission (MHDC) for Adams Grove in the Forest Park Southeastern neighborhood in St. Louis. The development will provide 50 townhomes and garden apartments to families, with four one-bedroom apartments, 16 two-bedroom apartments and four four-bedroom apartments. A goal for neighborhood leaders is to increase Forest Park Southeast neighborhood’s population to 5,000 by 2020. The population plunged to 2,900 by 2010. Construction costs for Adams Grove are expected to total $11.5 million, with construction lasting 12 to 14 months.

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Related Beal, a real estate firm, began construction Jan. 13 on Parcel 1B in the Bulfinch Triangle in Boston. Related Beal secured financing Dec. 22 and entered into a 99-year land lease with the state. Financing for this development included a $52 million tax-exempt and $33.75 million taxable bond from MassDevelopment. Massachusetts Housing and Community Development provided LIHTCs that will result in $7.4 million in LIHTC equity. The mixed-use development will include a 239-unit, 14-story workforce building in downtown Boston with a 220-key hotel, street level retail and on-site parking, totaling approximately 484,000-square-feet. Construction is expected to be complete in 2018. This will be the first development under Mayor Martin J. Walsh’s housing plan, “Changing City: Boston 2030,” which calls for the creation of 53,000 new residential units by 2030, with 44,000 set aside for workforce units. Units will be available to individuals, couples and families with incomes ranging from 30 percent of the area median income (AMI) up to 165 percent AMI. In addition, 10 percent of the residential units will be three-bedroom units providing affordable family housing in downtown Boston.

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The Washington State Housing Finance Commission (WSHFC) approved $89 million for low-income housing, including complexes in Everett and Federal Way Dec. 17. Gateway Apartments in Everett, will provide 177 townhome-style-units to families. WSHFC provided $34 million in tax-exempt bond financing for construction. Celebration Senior Living West in Federal Way will provide 189 units, and is the second phase of development. WSHFC provided $21 million in tax-exempt bond financing.

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The District of Columbia Housing Finance Agency (DCHFA) announced Dec. 22 the closing of financing for Bowen Flats. DCHFA provided $3.4 million in long-term and $3.2 million in short-term tax-exempt bonds. DCHFA also provided $5.1 million in LIHTC equity. Bowen Flats will provide 41 units in a three story apartment building. There will be one-, two- and three-bedroom units.

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On Jan. 8, the National Equity Fund (NEF) and National Church Residences announced a new partnership to create a $50 million affordable housing investment fund. NEF is providing $45 million for the fund and National Church Residences is providing $5 million. The fund will be used to acquire existing affordable senior housing communities for renovation and preservation. The first investment from the fund was the $3.7 million purchase of Big Bethel Village in Atlanta. This transaction was finalized Dec. 31, 2015. In addition to Big Bethel Village, investment in Antioch Tower in Cleveland and Clinton Place in Mt. Clemens, Mich., is also expected during the first quarter of 2016. The fund gives National Church Residences, a nonprofit organization, the ability to streamline the acquisition and preservation of affordable housing for seniors.

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Boston Capital announced Jan. 21 the closing of Boston Capital Corporate Tax Credit Fund XLI. The nationally diversified portfolio includes 2,119 affordable apartment units, divided between 31 apartment properties in 17 states. Of those properties, there are 23 properties for families and eight properties for senior citizens. Fund XLI is expected to result in the creation of more than 2,100 local jobs and will generate nearly $201 million in local salaries. The fund provides $225 million in equity. Boston Capital also recently launched Corporate Fund XLII, a $125 million fund that is expected to close in March.

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City Real Estate Advisors (CREA) announced Jan. 16 the closing of CREA Fund 45. The $126.6 million multi-investor fund includes 17 properties located in 10 states. CREA Fund 45 closed in two tranches Dec. 18, 2015, and Jan. 8, 2016. CREA Fund 45 expanded the company’s investor group by adding six new investors in 2015, and reaching $500 million in investor equity that year. CREA has seen $2.9 billion in investor equity raised since inception in 2001.

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On Jan. 26, U.S. Bank announced $8.8 million in LIHTC equity for Station 162 in Gresham, Ore. Station 162 will provide 44 apartments, with 17 reserved for quadriplegics. The remaining 26 units, minus the manager’s unit, will be designated for seniors 55 and older. U.S. Bank also provided a $7.8 million community lending construction loan and is donating $10,000 to help complete the nearly $11.3 million development. Units will be available to occupants earning between 30 and 60 percent of the AMI. Construction is expected to finish within a year.

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MassHousing announced Feb. 1 that it will provide $3.5 million in permanent financing for Mass Mills III. Mass Mills III will be the third phase of redevelopment of the former Massachusetts Mills complex in downtown Lowell, Mass. Built in the early 20th century, the historic five-story Picker Building will be converted into affordable housing to provide 70 new apartments for low- and moderate-income families. Approximately one-third of the building will be demolished, and in its place will be a new courtyard. Mass Mills I and II feature 281 units of mixed-income housing. The first two phases received approximately $28 million in MassHousing financing. Additional financing for the $27.8 million third phase includes federal LIHTCs, and federal and state historic tax credits (HTCs).

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The Woda Group Inc. announced Jan. 6 the completion of Penn Square II Apartments, also known as Fulton-Gethsemane Village, in Baltimore. Penn Square II Apartments is the second and final phase of the Penn Square Apartments development. This second phase provides  61 one-, two-, and three-bedroom apartments. Development was officially complete in the fall 2015. Amenities include a community room, a computer room and a library. The first phase was completed in the spring of 2011 and consists of 91 one-, two-, and three-bedroom apartments.

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Steele Properties announced Jan. 8 the acquisition of two affordable housing properties, Burlington Manor in Burlington, Colo., and Georgetown Square in Georgetown, Texas. Steele Properties plans for large-scale property renovations at each community to begin in early 2017. Burlington Manor is a 54-unit, project-based Section 8 community. Steele Properties received more than $4.2 million of LIHTC equity from PNC Bank to support the redevelopment. There will be significant interior upgrades in the kitchens and bathrooms, as well as new amenities such as a playground, an upgraded management office and a building expansion to include a community center, a fitness facility, a computer lab and expanded laundry room. Georgetown Square is a 55-unit project-based Section 8 community. PNC provided $4.7 million in LIHTC equity for redevelopment. PNC also originated a $3.5 million Fannie Mae permanent loan. There will be a $2.5 million renovation of the community, including interior and exterior upgrades to the kitchens and bathrooms. Development costs are expected to be more than $14 million.

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Greystone Affordable Housing Initiatives LLC, a provider of affordable housing recapitalization and rehabilitation services, announced Jan. 11 the closing of a $64.4 million multifamily housing transaction in Kentucky. The 18 USDA Rural Development Section 515 properties are located in 14 counties and provide 563 apartment homes to low-income households. The Kentucky Housing Corporation (KHC) tailored an equity bridge loan that provided $5 million. Additional financing included $500,000 from the HOME Investment Partnerships program and $21.2 million in multifamily private activity tax-exempt bonds. The rehabilitation plan is estimated to be complete within 12 months.

People in the Industry

McCormack Baron Salazar Inc. announced Jan. 13 the appointment of Vince Bennett as president. Bennett will be responsible for the overall performance of the development company, overseeing operations and managing a team of design, construction, legal, finance and management staff. Before his promotion, Bennett served as chief operating officer the company, having originally joined in 1993 as a project manager for a mixed-income development. Before that, Bennett managed commercial and economic development activities for a community development corporation in the Pittsburgh.

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On Jan. 12, Thomas R. Gleason, executive director of MassHousing announced that he would retire effective Dec. 31, 2016. Gleason began his role as executive director in 2001. Gleason is also president of the National Council of State Housing Agencies (NCSHA), a Washington, D.C.-based trade organization that represents the housing finance agencies in all of the states and territories. He was elected to a two-year term as the president in September 2014, and plans to serve the remainder of his term, which ends in September. The MassHousing board named Timothy C. Sullivan, MassHousing’s deputy director for finance and rental programs, as Gleason’s successor. Sullivan has served in this role since 2013.

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Bellwether Enterprise Real Estate Capital LLC, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced Feb. 1 the addition of Kip Kimble as senior vice president. Kimble will be based in the company’s Boston office. He will be involved in the origination of multifamily and commercial real estate debt financing. Kimble most recently served as a principal loan originator at Prudential Mortgage Capital Company. Before that, he was a director-loan originator and vice president at Deutsche Bank Berkshire Mortgage.

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On Jan. 5, BRIDGE Housing announced the election of Ronald C. Nahas as chairman of the board of directors. Nahas joined the BRIDGE board in 2005 and has served as vice chairman and finance committee chairman. Nahas is a partner of the real estate firm Rafanelli & Nahas, which specializes in the development, ownership and management of market-rate multifamily housing in the East Bay area of California. The board also presented emeritus status to Kent Colwell, a principal of Parthenon Associates, who joined the board in 1988, and Peter Palmisano, a partner at Pacific Union Development Co., who has served as a board member since 1995.

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Lancaster Pollard announced Jan. 19 the promotion of Padam Singh to expand the firm’s investment banking and mortgage banking finance activities for market-rate, income-restricted and subsidized rental properties. He will be responsible for clients in the Southeast, with an emphasis on Georgia, North Carolina, South Carolina and Tennessee. Before accepting his new role, Singh was an associate with the firm, providing support on a range of bond transactions and mortgage loans for construction and refinance projects. Previously, Singh served as the director of urban design and planning with HNTB.

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On Jan. 6, the Woda Group Inc. announced the appointment of Chris LaGrand as senior vice president and corporate counsel and the promotion of James Zambori, CPA, to director of accounting, management. LaGrand joined The Woda Group Inc., Dec. 2, 2015. LaGrand will be responsible for support and direct development activity with focus on legal and policy, and assist with deal selection, housing credit application and administration issues. Before joining Woda Group Inc., LaGrand was with Michigan State Housing Development Authority for 10 years, first as an attorney, then as the director of legal affairs, and most recently as chief housing investment officer. Zambori will be responsible for all day-to-day accounting and annual reporting for the management division, Woda Management and Real Estate. Zambori joined the company in 1997. He has worked at the Woda Group Inc. in several positions, including financial reporting controller, senior property accountant, compliance accounting manager and most recently director of development reporting. Before joining the company, Zambori was senior accountant McManis and Associates Inc.

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Conifer Realty announced Jan. 8 the promotions of Teresa Rudd, Kim Beaumont and Brandi Johnson. Rudd was promoted to risk manager. Rudd has been with Conifer for more than seven years. Beaumont was promoted to senior paralegal, having joined Conifer in 2013. Johnson was promoted to accounts payable supervisor and has been with Conifer since 2013. Their promotions were effective in January.

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Nixon Peabody announced the promotion Feb. 1 of several of its real estate and community development members to partnership. Meghan Altidor, affordable housing, Washington, D.C., represents nonprofit and for-profit developers in acquiring, constructing, rehabilitating and operating affordable housing developments across the country. Ashley Champion, real estate and community development, Rochester, N.Y., focuses on commercial real estate, land use and zoning, retail leasing and medical facilities, representing local and national property owners, investors, developers and tenants. Stephanie Seiffert, private clients group, Rochester, N.Y., specializes in estate planning and trust and estate administration. Aaron Yowell, affordable housing, New York City, represents private, public and nonprofit developers, investors and real estate owners, with a focus on affordable and supportive housing developers. He provides advice on project development, rehabilitation and operation, including tax exemptions, acquisitions, dispositions, public and private financings and joint ventures.

Journal Category:

Low-Income Housing Tax Credits

Authors:

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