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Low-Income Housing Tax Credits News Briefs - March 2017

LIHTC Industry

Randy Hultgren, R-Ill., and Dutch Ruppersberger, D-Md., issued a dear colleague letter Jan. 23 to all House members in support of tax exemption for municipal bonds. The dear colleague letter, issued in response to a House sign-on letter sent to Ways and Means Chairman Kevin Brady, R-Texas, and Ranking Member Richard Neal, D-Mass., states that with bipartisan agreement on the need for infrastructure financing, it is important to remember the vital role of the tax-exempt municipal bond. The sign-on letter says that nearly two-thirds of core infrastructure investments in the United States are financed with municipal bonds and that in 2015 alone, more than $400 billion in municipal bonds were issued to finance development. Authors of the letter state that if simply left alone, municipal bonds likely will finance another $3 trillion in new infrastructure investments by 2026. The letter closes with the statement that any changes under consideration to the tax-exempt status that would increase the cost of financing for states and local government should be provided very careful consideration. 

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On Jan.17, the Office of the Comptroller of the Currency (OCC) launched the new Central Application Tracking System (CATS), the OCC’s new Web-based system for banks to file licensing and public welfare investment applications and notices. CATS is designed to help authorized national banks, federal savings associations and federal branches and agencies to draft, submit and track licensing and public welfare investment applications and notices. In addition, the system allows OCC analysts to receive, process and manage those applications and notices. This is the first of three phases, with the second and third phases scheduled to begin this spring. CATS replaced e-Corp and CD-1 Invest, the current OCC electronic filing systems.

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The OCC published revisions Jan. 19 to Community Reinvestment Act (CRA) regulations that define “small bank,” “small savings association,” “intermediate small bank” and “intermediate small savings association.” The OCC defines a “small bank” or “small savings association” as an institution that had assets of less than $1.226 billion as of Dec. 31, 2015, or Dec. 31, 2016. The regulations define as an “intermediate small bank,” or “intermediate small savings association,” an institution with at least $307 million on both dates and less than $1.226 billion in assets on either date. The regulations were effective Jan. 18.

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The OCC released Feb. 1 the CRA performance evaluations for 20 national banks and federal savings associations. The evaluations were for the period of Jan. 1-31. The list contains national banks, federal savings associations and insured federal branches of foreign banks. Of the 20 evaluations, two rated as outstanding and 18 rated as satisfactory. A list of the evaluations is available at www.occ.gov.

LIHTC State

Utah state Rep. Rebecca Edwards introduced Jan. 24 H.B. 36, a bill that would nearly triple the state low-income housing tax credit (LIHTC). H.B. 36 would boost the annual statewide cap from 12.5 cents per person to 34.5 cents per person, effective Jan. 1. Based on 2015 population figures, that would mean a jump from $375,000 annually to $1.03 million per year. At press time, the bill had passed in the state House and moved to the Senate for approval. The bill is available at www.taxcredithousing.com.

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The Minnesota Housing Finance Agency (MHFA) announced Feb. 28 as the extended deadline to submit Round 2 LIHTC program applications. MHFA has approximately $201,000 in tax credits available for Round 2.  Before submitting the full application Feb. 28, an intent to apply form had to be submitted by Feb. 14. Participants must have previously received tax credits, and have an annual tax credit shortfall of at least 5 percent but not more than 33.3 percent of the total qualified annual tax credit. Both of these qualifications must be met in order to have priority in the second round. 

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The California Department of Housing and Community Development (HCD) released the report, “California’s Housing Future: Challenges and Opportunities (Public Draft).” The draft report analyzes housing needs and conditions throughout the state, and provides recommendations to address housing challenges. HCD states the majority of Californian renters (more than 3 million households), pay more than 30 percent of their income toward rent, and nearly one-third pay more than 50 percent of their income toward rent. In addition, overall homeownership rates are at their lowest since the 1940s. HCD says that for California’s vulnerable populations, discrimination and inadequate accommodations for people with disabilities are worsening housing cost and affordability challenges. The report lists challenges such as how the existing system of land-use planning and regulation creates barriers to development, and that unstable funding for affordable home development hinders California’s ability to meet the state’s housing demand. Options to remedy the situation include reforming land-use policies to advance affordability, sustainability and equity; addressing housing and access needs for vulnerable populations through greater interagency coordination, program design and evaluation; and investing in affordable home development and rental homeownership assistance and community development. Comments on the draft report are accepted through March 4. 

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The Tennessee Housing Development Agency (THDA) board of directors approved Jan. 24 two amendments to the 2017 LIHTC qualified allocation plan (QAP). The initial application deadline for the 9 percent LIHTC was changed to May 1 (this change does not apply to innovation set-aside round applications), and provisions were added to provide relief to Sevier County as a result of the 2016 federal disaster declaration. More information is available at www.taxcredithousing.com.

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The Michigan State Housing Development Authority (MSHDA) announced Jan. 24 the allocatees of the Oct. 3, 2016, LIHTC funding round. A total of $11.6 million was awarded for developments. Allocation amounts ranged from $146,188 to $1.5 million. The full list of developments is available at www.taxcredithousing.com.

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Montana Gov. Steve Bullock announced $27.1 million in federal LIHTCs Jan. 26 that will fund the construction of eight developments throughout the state. Roosevelt Villas in Culbertson-Wolf Point, received $2.5 million for the acquisition and rehabilitation of 16 apartments. There will be eight one- and eight two-bedroom apartments for families. Polson Landing in Polson, received $6.7 million for the new construction of 35 apartments. There will be three one-, 19 two- and 12 three-bedroom apartments for families. There will also be one manager’s apartment. Blackfeet Homes VI in Browning received $6.7 million for the new construction of 30 apartments for families. There will be 20 three- and 10 four-bedroom apartments. Gateway Vista in Billings received $4.2 million for the new construction of 24 apartments. There will be 11 one- and 13 two-bedroom apartments for families. Rockcress Commons in Great Falls received $6.7 million for the new construction of 124 apartments for families. There will be 60 one-, 38 two- and 26 three-bedroom apartments. Construction is expected to create 534 jobs. The allocation list is available at www.taxcredithousing.com.

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The California Franchise Tax Board released a roundup Feb. 1 of “What’s New for 2016 Returns” with mentions of the LIHTC program. Topics in the roundup include allocations to partners and the transfer of credits. Regarding allocations, the previous law exception that requires a partnership to allocate the credit among partners based upon the partnership agreement is re-enacted for partnerships owning developments that receive a preliminary reservation of the LIHTCs before Jan. 1, 2020. Regarding the transfer of credits, for developments that receive a preliminary reservation of the LIHTC beginning on or after Jan. 1, 2016, and before Jan. 1, 2020, a taxpayer may make an irrevocable election in its application to the California Tax Credit Allocation Committee to sell all or any portion of the LIHTC allowed to one or more unrelated parties for each taxable year in which the credit is allowed. 

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On Feb. 3, California Tax Credit Allocation Committee (CTCAC) provided announced an update to both the 9 percent competitive application and the 4 percent competitive tax-exempt bond application. Cell C56, under the size factor section of the final tie breaker self-score worksheet, was modified so that an applicant no longer needs to enter in the number of tax credit units. More information is available at www.treasurer.ca.gov.

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On Feb. 8, the Mississippi Home Corporation (MHC) issued a bulletin to 2016 LIHTC recipients, announcing an extension for the 2017 LIHTC cycle, as well as options for reduced equity pricing. The 2017 LIHTC cycle deadline was moved to April 4. There are also three options to help recipients in recovering from reductions in credit pricing. Option one allows developers to return their 2016 tax credit awards until March 10. The developer will receive a full refund of servicing fees and the penalty barring the developer from participating in the subsequent funding cycle will be waived. Option two allows developers to return their 2016 tax credit awards until April 1. The developer will receive a refund of their servicing fees (less $20,000 or 15 percent, whichever is less) and the penalty of barring the developer from participating in the subsequent funding cycle will be waived. Option three allows developers to request additional tax credits that will be issued from a future tax credit cycle or from returned 2016 credits. There are several stipulations to the available options. For developers that request additional tax credits, there must be evidence of a deferred developer fee of at least 40 percent of the original developer fee. Developers requesting additional credits will not be eligible to participate in the 2017 LIHTC round, if requesting more than the $750,000 in total credit awards per application. Additional awards of tax credits are contingent on the developer submitting a demonstration of efforts made to close the equity funding gap from the original application and will be brought to the board for final approval. Requests for additional credits must be submitted by March 22.

LIHTC Dealmaker

Boston Capital announced Jan. 10 its investment in the development of Trinity Tower South and Trinity Towers East, two senior affordable apartment communities in Melbourne, Fla. The properties are being renovated with low-income housing tax credit (LIHTC) equity. Trinity Tower South Apartments will provide 130 studios and 32 one-bedroom apartments in a four-story building. Renovations will include the remodeling of nine apartments to full accessibility, with four equipped for the hearing- and vision-impaired. Interior renovations will also be done on 78 apartments. Trinity Towers East Apartments will provide 52 studios and 104 one-bedroom apartments in a 14-story building. Renovations will include the remodeling of eight apartments to full accessibility, with four apartments equipped for the hearing- and vision-impaired. Interior renovations will be done in 115 apartments. Amenities for both properties will include on-site management, a community room with kitchen, an exercise facility, a computer lab, a library and a card room. Rental homes will be available to seniors 62 and older who are earning 60 percent or less of the area median income (AMI). 

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The Connecticut bond commission released $6.5 million in funding Feb. 2 for the new construction and renovation of Center Village, an affordable apartment community for seniors in Glastonbury, Conn. The two-story building will have 34 freshly rehabilitated apartments and 38 newly constructed apartments. The approved funding is part of an $18 million development which will include the renovation of six existing buildings with apartments expanding from 350 square feet to 650 square feet. Construction is expected to begin this spring, and work is expected to take 17 months with a completion date of August or September 2018. Financing for Center Village includes $500,000 from the Connecticut Housing Finance Authority (CHFA), with additional financing for the overall development to include a $3.2 million mortgage from CHFA and $1.2 million from the Housing Authority of the Town of Glaston.

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Alden Capital Partners, in partnership with the Puerto Rico Housing Finance Authority, announced Jan. 17 the closing of $27.6 million in LIHTC equity financing for the construction of Puerta de Tierra in San Juan, Puerto Rico. Puerta de Tierra, a mixed-income, mixed-finance development, will provide 174 townhouse and garden-style apartments with 92 public housing apartments, 43 LIHTC apartments and 39 market-rate apartments. Amenities will include a fitness room, a business center, a playground and a garden. There will also be 6,000 square feet of commercial space. The Puerto Rico Housing Finance Authority allocated $29.2 million in federal LIHTCs, with equity facilitated through its Tax Credit Fund 19. Citi also provided a construction loan, with additional financing for the development provided through a public partnership with the Puerto Rico Department of Finance. Development costs are expected to reach $41.3 million. Construction is scheduled for completion summer 2018. Puerta de Tierra is the second development in Puerto Rico’s affordable housing revitalization plan.

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The Woda Group Inc. announced Jan. 17 that Kreider Commons in Lebanon, Pa., earned LEED Platinum Certification. The former A.S. Kreider Shoe Company manufacturing warehouse, built in 1919, received the status from the U.S. Green Building Council (USGBC). The six-story, 63,000-square-foot building was renovated to provide 50 one- and two-bedroom apartments for independent seniors 62 and older, as well as a community room, a library and a play area for visiting children. All apartments have energy-saving windows, individually controlled heating and cooling systems and all new Energy Star appliances. Development costs for Kreider Commons were approximately $12 million and it was financed with the help of $9.6 million in LIHTCs from the Pennsylvania Housing Finance Agency, as well as $450,000 in PennHomes funding.

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Boston Capital announced Jan. 24 the closing of Boston Capital Corporate Tax Credit Fund XLIII, a $260 million LIHTC fund that features 32 affordable housing communities in 15 states. Of those 32 properties, 22 are for families and 10 are for seniors. An additional 2,514 apartments are added to Boston Capital’s portfolio with Fund XLIII. Boston Capital also announced it is preparing to launch Corporate XLIV, a $150 million fund, in the second quarter of 2017.

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The Woda Group Inc. announced Jan. 24 the beginning of construction for Wheatland Crossing Senior Apartments in Columbus, Ohio. The three-story building will offer 42 one- and two-bedroom apartments, daily meal programs, health and wellness classes, health screenings and referrals, planned social activities and personal finance and credit counseling. There will also be on-site property management and a supportive services coordinator. Financing for the property includes the allocation of federal LIHTCs from the Ohio Housing Finance Agency (OHFA), approximately $4.1 million LIHTC equity from the Ohio Capital Corporation for Housing (OCCH), approximately $4.6 million from Key Bank, more than $4.1 million in equity from Huntington National Bank, $500,000 in HOME funds from the city of Columbus, and a bridge loan of $2.5 million from the Affordable Housing Trust of Columbus and Franklin County. Construction costs are expected to be $8.6 million, and the completion of Wheatland Crossing is scheduled for late 2017.   

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On Jan. 18, Eastern Pacific Development LLC announced the start of construction on Landis Square Senior Apartments, an affordable rental property in Vineland, N.J. The three-story building will provide 71 one- and two-bedroom LIHTC apartments for seniors 55 years and older. Of those apartments, 10 will be reserved for individuals with disabilities. There will also be more than 11,000 square feet of retail space. JP Morgan is providing $14.9 million in LIHTC equity for construction, which is scheduled for completion in November. Construction costs are expected to total $25 million. Landis Square Senior Apartments is part of Landis Square East, a larger redevelopment effort. The first stage of Landis Square East is the restoration of the historic Landis Theater.

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The groundbreaking for Rolling Hills II in Templeton, Calif., was Jan. 17. The affordable housing community, developed by Peoples’ Self-Help Housing (PSHH), a nonprofit that creates affordable housing and self-sufficiency programs on California’s Central Coast, will provide an additional 30 affordable apartments to the existing 53. Rolling Hills II will be constructed on a 2-acre site. There will be two one-, 18 two- and 10 three-bedroom apartments, with three apartments available at or below 30 percent AMI, eight apartments available at or below 45 percent AMI, 12 apartments available at or below 50 percent AMI and six apartments available at or below 60 percent AMI. Amenities will include a barbecue area and a tot lot. Residents will also be able to access additional community facilities at the adjacent Rolling Hills development. Financing for the $7.4 million development includes $7.9 million in federal LIHTCs from the California Tax Credit Allocation Committee (CTCAC). Additional financing was provided by the County of San Luis Obispo, City Real Estate Advisors, the Housing Authority of the City of San Luis Obispo, the San Luis Obispo County Housing Trust Fund and Wells Fargo Bank. Rolling Hills II is expected to open spring 2018.

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Developer Three Diamond Development broke ground Jan. 12 on Diamond Senior Apartments, an affordable housing property in Iowa City, Iowa. The property will have 36 apartments available to seniors 55 years and older. There will be one- and two-bedroom apartments, with four available to households earning below 30 percent of the AMI, 12 apartments will be available to those earning below 40 percent of the AMI and 20 apartments will be available to households earning below 60 percent of the AMI. Three Diamond Development received $5.6 million in LIHTCs from the Iowa Finance Authority, and the Iowa City Council approved a $600,000 cash contribution to the development. Construction costs are expected to total $7.4 million.

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The Santo Domingo Tribal Housing Authority provided a development update Jan. 9 for an affordable housing property in Santo Domingo Pueblo, N.M. The property is scheduled to open in May. There will be 41 one- and two-bedroom apartments. The property serves veterans, tribal members and nontribal members earning between 30 and 60 percent of the AMI. Financing for the property included $8.4 million in LIHTC equity from Raymond James Tax Credit, as well as a $414,000 Affordable Housing Program grant from the Federal Home Loan Bank of Chicago. Construction costs are expected be $10.2 million.

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Community Development Trust announced Jan. 4 the investment of $1.8 million in LIHTC equity for the renovation of Kensington Heights Apartments in Kansas City, Mo. The nine-story, 126-apartment community serves low-income senior citizens 62 years or older, and individuals with disabilities. Together with The Millennia Companies, Community Development Trust plans to complete $580,000 of capital improvements including upgrades to all of the community areas, as well as installing new high-efficiency boilers. Of the 126 apartments, 123 are one-bedroom, and the remaining three are two-bedrooms. 


LIHTC People

Preservation of Affordable Housing (POAH), a national nonprofit organization that creates and preserves affordable housing, announced Jan. 27 the appointment of Randy Parker as managing director, chief financial officer. Parker will work closely with the senior team and POAH’s board to develop and implement financial policies. He will maintain POAH’s lender, banking, investor and foundation relationships. Before joining POAH, Parker held senior positions at Beacon Capital Partners, TA Associates Realty and the nonprofit Housing Partnership Network. POAH also announced Printice Gary as a new board member. Gary is the founder and currently managing partner of Carleton Residential.

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Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc. (Enterprise), announced Jan. 18 the expansion of its affordable housing lending group to New York City, with the hiring of Hadley Bressman, John Mannix and Nicole Bressman. The three new team members will focus on Federal Housing Administration (FHA) lending in the New York region. They will report to Phil Melton, executive vice president and national director of affordable housing and FHA lending. Bressman joins Bellwether Enterprise as senior vice president, loan originator. He was a founding partner of the Metropolitan Funding Corporation, a New York City-based real estate lending firm specializing in HUD financings. Mannix joins as senior vice president, loan originator, and most recently worked as a managing partner and founder of Merchant Equity Group LLC. Bressman joins as an analyst, previously working at the Metropolitan Funding Corporation.

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The Delaware State Housing Authority (DSHA) announced Jan. 26 that Delaware Gov. John Carney confirmed the continued appointment of Anas Ben Addi as director of DSHA. As director of DSHA, Ben Addi was involved in creating several successful initiatives, such as the Loans for Heroes program, offering reduced rates for qualified veterans, and the Home Again program for qualified repeat homebuyers. He also pushed for and secured state funding to create the Statewide Rental Assistance Program (SRAP), which serves low-income residents who require affordable housing and supportive services to live safely and independently in the community. Ben Addi also worked to streamline access to DSHA programs such as the Housing Development Fund (HDF), the low-income housing tax credit and DSHA homeownership programs. He serves on several state committees including the Governor’s Commission on Community-Based Alternatives for Individuals with Disabilities, the Cabinet Committee on State Planning Issues, the Delaware Interagency Council on Homelessness and the Delaware Workforce Investment Board. As a member of the board of directors for the National Council of State Housing Agencies, he is working with his fellow housing directors to shape national housing policy.

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Elizabeth Young joined Nixon Peabody as partner, effective Feb. 1. Young’s focus is on tax credit finance and syndication. She provides tax counsel to public and private real estate investors, private equity sponsors and tax-exempt organizations to finance community development projects throughout the country. In addition, Young advises U.S. investors on a range of private equity and venture investments. She also serves as chairwoman of the pass-throughs and real estate committee of the District of Columbia Bar Association Tax Section.

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On Jan. 31, the Colorado Housing and Finance Authority (CHFA) announced Jaime G. Gomez as the new deputy executive director and chief operating officer (COO). Gomez joined CHFA in 1999 and has served as COO since March 2010. Gomez was promoted from his role as COO, a role and title he will retain with his new position. Gomez oversees CHFA’s business operations. This includes CHFA’s affordable housing and community development loan programs, loan servicing, asset management, research and strategy and marketing and community relations functions. Before joining CHFA, Gomez was with U.S. West Dex, the print and online directory publishing arm of U.S. West Inc., the Colorado Office of Economic Development and the Department of Bank Supervision at the Federal Reserve Bank of Kansas City. 

Journal Category:

Low-Income Housing Tax Credits

Authors:

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