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Low-Income Housing Tax Credits News Briefs - May 2012

AFFORDABLE HOUSING INDUSTRY

The Federal Housing Finance Agency (FHFA) released the 2012 Conservatorship Scorecard, which includes specific objectives and timetables for Fannie Mae and Freddie Mac. The goals are based on FHFA’s Strategic Plan announced earlier this year. The main objectives are to build a new infrastructure; simplify and shrink center operations to contract the enterprises’ presence in the marketplace; maintain foreclosure prevention activities and credit availability for new and refinanced mortgages; and manage efficiently in support of conservatorship goals. Scoring is based on cooperation, collaboration and effectiveness in addition to the ultimate accomplishment of results. Most goals have a target completion date of December 31. View the scorecard at www.fhfa.gov.

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New energy codes could sharply increase the construction costs of each unit in a multifamily building, according to research from the National Multi Housing Council (NMHC) and the National Apartment Association (NAA). The report, “Impact of the 2009 and 2012 International Energy Conservation Code (IECC) on Multifamily Buildings,” examines the costs of adopting the latest versions of the IECC. The new versions represent a significant departure from the 2006 IECC, the report said. For example, complying with the 2012 code could add as much as $2,160 to the construction cost of a low-rise building unit. A copy of the report is available at www.nmhc.org.

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As the country’s population ages, the share of the population with severe housing cost burdens is likely to rise, according to a Center for Housing Policy (CHP) study. The report, titled “Housing an Aging Population: Are We Prepared?” also found that many older adults lack access to housing choices and affordable services that could help them age in place. It covers trends affecting older adults in terms of demand, housing costs, finances, location and housing type. To address the housing crisis, CHP recommended policies such as home modification subsidies and adoption of more flexible zoning policies to expand housing choices. Access the report on the National Housing Conference’s web site at the National Housing Conference.

DEALMAKERS

EAH Housing and the city of Turlock broke ground on Avena Bella, an 80-unit affordable housing property in Turlock, Calif. The community will consist of eight Mediterranean-themed buildings on a 4.3-acre site and offer a mix of two- and three-bedroom garden-style apartments. Residents will have access to a community center, communal kitchen, swimming pool, tot lot and community garden. Avena Bella also features solar power, advanced ventilation systems and a storm water retention system. When completed in June 2013, the property is expected to attain LEED certification. The $19 million development received funding from JP Morgan Chase Bank, the Turlock Redevelopment Agency and the Federal Home Loan Bank, along with a 9 percent LIHTC allocation from the California Tax Credit Allocation Committee.

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Boston Capital Finance closed on a 24-month construction loan for Ardsley Commons, an affordable senior community in Locust, N.C. The 36-unit building will feature an elevator, central air, dishwashers, laundry hookups and walk-in closets. The property will also include a storage area and laundry room on each floor, a community room with a computer center, a fitness center and a picnic area. Units will be available to seniors earning between 40 and 60 percent of the area median income (AMI). Boston Capital provided the development with both LIHTC equity and the construction loan, which closed into the Boston Capital Intermediate Term Income Fund. Ardsley Common’s construction is expected to generate nearly $3.5 million in local income and create approximately 52 jobs.

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Jamboree Housing Corporation celebrated the grand opening of Courier Place Apartment Homes in Claremont, Calif. The three-story, garden-style community was built as part of Claremont’s Village expansion, a shopping and entertainment district on former industrial land near downtown. Courier Place stands on the former site of the Claremont Courier newspaper building. The multigenerational community offers 38 two- and three-bedroom units to families and seniors earning between 30 and 50 percent of AMI. WNC & Associates provided nearly $13.3 million in LIHTC equity for the development. Other financing partners include the city of Claremont, Claremont
Redevelopment Agency, U.S. Bank, Los Angeles Community Development Commission and the U.S. Department of Housing and Urban Development (HUD).

STATE

The California Solar Initiative (CSI) Thermal Low-Income program began accepting applications in late March. The program is intended to promote the installation of gas-displacing solar water heating systems on low-income single-family and multifamily homes in the service territories of Pacific Gas & Electric, Southern California Gas and San Diego Gas & Electric. As much as $500,000 in incentives is available for a qualifying multifamily property. More information about the CSI-Thermal program is available from the CSI.

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John A. Henry Jr. and MacKenzie S. Kembel joined the Colorado Housing and Finance Authority’s (CHFA’s) Low Income Housing Tax Credit Allocation Committee. The committee reviews LIHTC applications and makes recommendations for approval to CHFA’s executive director. Henry and Kembel have filled two new positions that CHFA created for representatives from Colorado’s affordable housing community. Henry, a partner at Kutak Rock LLP, has experience in affordable housing transactions using bond financing and 4 percent LIHTCs. His expertise also includes NMTC projects. Kembel, a Bank of Colorado loan officer, assists clients seeking affordable housing options. She has served on committees responsible for reviewing and approving affordable housing funding requests, as well as crafting policy for mortgage lenders.

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Huntington Bank has committed $100 million in investment and financing for Michigan affordable rental housing through 2015. The bank will invest $50 million of that amount in LIHTCs and lend the other $50 million to directly finance affordable housing developments. The funds will provide approximately 3,000 new or refurbished affordable housing units for more than 9,500 state residents, and are also expected to support 1,600 construction jobs during the life of the partnership.

PEOPLE IN THE INDUSTRY

Raleigh, N.C.-based Community Affordable Housing Equity Corporation (CAHEC) announced several leadership changes arising from its corporate expansion. Jim Rieker was appointed to the syndication firm’s newly created executive vice president position. He has 25 years of experience with the LIHTC program and previously served as president and CEO of the Midwest Housing Equity Group (MHEG) in Omaha, Neb. Prior to joining MHEG, Rieker was the assistant housing director at the Nebraska Investment Finance Authority. At CAHEC, his responsibilities will include operational oversight of acquisitions, risk management, fund management, and asset management and compliance. Also, Chuck Newcomer has assumed the role of vice president of CAHEC’s new risk management department. Before joining CAHEC, Newcomer worked as a project manager, a vice president with a not-for-profit housing developer, and an independent consultant performing market studies. In addition, Greg Mayo was promoted to vice president, acquisitions. Mayo has experience closing adaptive reuse projects and other projects using a combination of federal and state tax credits.

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SNR Denton elevated Sean Leonard to partner in the real estate practice of its Boston, Mass. office. Leonard concentrates on representing participants in the equity financing of tax-advantaged transactions, focusing on those generating federal and state low-income housing, new markets, historic rehabilitation, and renewable energy tax credits. Leonard earned his juris doctor from Suffolk University Law School.

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Deborah L. Dixon has joined Gorman & Company as its Illinois market president, based in the development firm’s Chicago office. In her new role, Dixon will direct all affordable housing activities in Illinois. She has more than 27 years of experience in urban real estate development and finance, and previously directed real estate development for Neighborhood Housing Services of Chicago.

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William Mulrow was appointed chairman of the New York State Housing Finance Agency (HFA) and the State of New York Mortgage Agency (SONYMA), two agencies within New York State Homes and Community Renewal. Mulrow is a senior managing director at Blackstone and has served in executive positions with Citigroup, Paladin Capital Group, Gabelli Asset Management, Rothschild Inc. and Donaldson Lufkin & Jenrette. He has also served on the boards of the Taubman Center for State and Local Government at Harvard University and the Federal Home Loan Bank of New York. He holds a bachelor’s degree from Yale University and a master’s degree from Harvard University’s Kennedy School of Government.

BONDS

RED Capital Group structured a $7.5 million tax-exempt bond financing for the construction of Franklin Station, a 100-unit apartment property in Columbus, Ohio that will serve the elderly and special needs populations. The development sponsor, Columbus Metropolitan Housing Authority, broke ground on the $15 million project in March. The development will include a computer resource room, wellness center, food pantry, elevator, library, laundry facilities, training center and meditation garden. Franklin Station will partner with the YMCA of Central Ohio to provide residents access to medical and mental health services, employment training, case management, financial training, transportation, food and other services. In addition to RED Capital Group, financing partners included the Federal Home Loan Bank of Cincinnati, Ohio Capital Corporation for Housing, Franklin County and the Ohio Housing Finance Agency.

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San Diego Housing Commission (SDHC) and Chelsea Investment Corp. opened Park Terramar, a 21-unit affordable community in San Diego, Calif. The property is located in Torrey Highlands, a master-planned neighborhood in the north of the city. The $7.6 million complex includes three two-story buildings that share a tot lot, and recreation and picnic areas. Units are leased to families earning 60 percent or less of AMI. SDHC provided the site and a $2 million loan, while the Housing Authority of the City of San Diego issued $4 million in bonds and U.S. Bank provided nearly $3 million in LIHTC equity and $4 million in construction and permanent loans.

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The Internal Revenue Service (IRS) has formed a compliance practice research team to find signs of suspicious tax-exempt bond activity, The Bond Buyer reported. The team will target transactions in which there are indications of bid-rigging, price-fixing or any other signs of mispricing. One of the team’s goals is to create a public resource tool that would help issuers avoid problems by helping them identify red flags as they track the life of a bond issue.

Journal Category:

Low-Income Housing Tax Credits

Authors:

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