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Low-Income Housing Tax Credits News Briefs - May 2013

AFFORDABLE HOUSING INDUSTRY BRIEFS

The IRS released the calendar year 2013 resident population figures in April. Notice 2013-15, specifies that the amount for calculating the low income housing tax credits (LIHTC) ceiling is the greater of $2.25 multiplied by the state population, or $2,590,000. The amount for calculating the volume cap is the greater of $95 multiplied by the state population, or $291,875,000. The notice is meant to inform state and local housing credit agencies that allocate LIHTCs and tax exempt bonds.

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Standard and Poor’s Rating Services invited feedback on the rating methodology and assumptions for affordable multifamily housing bond transactions. The April 1 request asks for comments specifically on the proposed changes to the ratings criteria regarding the municipal bond transactions. Procedures for rating affordable housing, subsidized housing and privatized military housing bond transactions are included in the proposed changes. The proposed changes were introduced to include the Commercial Mortgage-Backed Securities (CMBS) group newly published criteria. Comments are due by June 1.

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The Office of the Comptroller of the Currency (OCC) submitted a notice and request for comment on the information collection of “Disclosure and Reporting of CRA-Related Agreements.” The OCC reviewed the current information collection processes on Community Reinvestment Act-related agreements, suggested its extension and sought comments on the suggestion. The information collection concerns national banks and federal savings associations and their affiliates as they enter into agreements. Comments are invited on whether the collection of information is necessary for the functions of the OCC; the accuracy of the OCC’s estimate; ways to enhance the quality, utility and clarity of the information; ways to minimize the burden of the collection on respondents; and estimates of capital or start-up costs. May 13 is the deadline to submit comments.

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The National Low Income Housing Coalition (NLIHC) released its 2013 Out of Reach report. The report identifies the gap between wages and rents across the country and determines if cost of living is greater than income for a given area. The 2013 report looks at the average full-time, hourly wage a household must earn to afford an apartment being offered at the U.S. Department of Housing and Urban Development (HUD)-estimated fair market rent (FMR), while spending no more than 30 percent of income on housing costs. This year’s Out of Reach focused on the lowest-income renters, and the challenges they face, such as increasing rents, stagnating wages and a shortage of affordable housing. NLIHC suggested expanding the number of affordable housing units reserved to the lowest income renters as a way to reduce the burden on the lowest earners.

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H.R. 858, the Rural Housing Preservation Act of 2013, was introduced in Congress in February. The purpose of the bill is to amend section 520 of the Housing Act of 1949 to revise the requirements for areas to be considered as rural areas. Rep. Jeff Fortenberry, R-Neb., introduced the bill and Rep. Juan Vargas, D-Calif., cosponsored the bill. Following the 2010 Census, some communities eligible in 2000 have become ineligible for Rural Development programs. The bill would maintain the previous definition of “rural” until the 2020 Census data is made available.

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The U.S. Department of Treasury and Internal Revenue Service (IRS) published Notice 2013-22, inviting public recommendations for the 2013-2014 Guidance Priority List. The Guidance Priority List is used to identify and prioritize tax issues, and the 2013-2014 list will help Treasury and the IRS prioritize the allocation of resources. The Treasury and the IRS will review recommendations and select projects for inclusion on the 2013-2014 list. The following are some of points that will be considered: whether the recommendation guidance promotes sound tax administration, whether the recommendation guidance can be drafted in a manner that will enable taxpayers to easily understand and apply the guidance, and whether the IRS can administer the recommendation guidance on a uniform basis. Public comments can be submitted for possible inclusion on the original 2013-2014 Guidance Priority List. Recommendations for guidance received after May 1, 2013 will be reviewed for the next periodic update. The next list’s cycle will be from July 1, 2013 through June 30, 2014.

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LDG Development will be expanding its Louisville-based affordable housing development company to Austin, Texas. Joining the Texas team are Senior Leader Dick Janson, Certified Apartment Manager Theresa Ebner and Development Coordinator Justin Hartz. Janson has more than fifty years of commercial real estate knowledge. He is also a Certified Community Investment Member (CCIM) and a member of the Society Exchange Counselors (SEC). Ebner will oversee asset preservation. Hartz will manage financial closings for the Texas multifamily real estate developments.

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The Fannie Mae Delegated Underwriting and Servicing (DUS) program reached 25 years in April. Established in 1988, the program provides financing to the multifamily housing market through lending partners. According to the website, since the DUS program’s beginning, Fannie Mae and its partners have provided the market with more than $270 billion.

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The National Multi Housing Council (NMHC) and the National Apartment Association (NAA) submitted a letter to the House Ways and Means Committee’s Tax Reform Working Group in April regarding tax reform and affordable housing. The letter discusses the multifamily housing sector and lists five recommended priorities for tax reform: (1) tax reform must not harm passthrough entities, (2) maintain the current law tax treatment of carried interest, (3) retain the full deductibility of business interest, (4) protect the low-income housing tax credit and make permanent the flat 9 percent credit, and (5) preserve current law estate tax. A copy of the letter is available at www.nmhc.org.

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The OCC, the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation in March released proposed revisions to Interagency Questions and Answers Regarding Community Reinvestment and a related Q&A. Comment is requested on the proposed revisions. The proposed revisions include information on community development and would provide clarification on the consideration given to certain community development services, the evaluation of community development lending and the treatment of qualified investments to organizations that use only a portion of the investment to support a community development purpose. The Q&A provides information on Community Reinvestment Act (CRA) regulations. For more information, visit www.ffiec.gov/cra.

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STATE BRIEFS

Connecticut will invest more than $29 million from its Competitive Housing Assistance for Multifamily Properties (CHAMP) program in nine properties. CHAMP, which provides gap funding for affordable housing developments, will help build or renovate approximately 476 units, including at least 319 affordable units. Properties in Bridgeport, Brookfield, Canaan, Hartford, New Haven, Torrington, Vernon and West Hartford will receive funds. Additional funding for the properties will come from other sources, including developer equity, private financing and low-income housing tax credits (LIHTCs). CHAMP, an initiative of the Department of Economic and Community Development, can provide owners with up to $5 million per development.

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Twelve Iowa affordable housing developments will receive awards totaling more than $70 million in federal LIHTCs to maintain 635 affordable housing units. Properties include Bloomsbury Village, with 30 affordable units, Hilltop Senior, with 55 affordable units and Liguitti Tower, with 139 affordable units. Properties are located throughout the state and localities include Des Moines, Milford, Newton, Storm Lake, Mill Farm and Waukee. The Iowa Finance Authority (IFA) received 38 applications requesting more than $19.8 million in LIHTCs for the 2013 allocation round.

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Louisiana Gov. Bobby Jindal signed Executive Order BJ 13-05 in March, which requires the Housing and Transportation Planning and Coordinating Commission (HTPCC) to serve as the state’s Interagency Council on Homelessness. Louisiana Housing Corporation (LHC), the state’s housing agency, will lead the task of creating and implementing Louisiana’s 10-year plan to end homelessness, serving as the state clearinghouse for information on homeless services and housing and transportation options for the homeless.

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The Ohio Housing Finance Agency (OHFA) board awarded the Catherine Booth Residence $10.5 million in multifamily bonds during its March meeting. The Catherine Booth Residence will consist of a three-story building with 96 one-bedroom units. Amenities will include a community room, laundry facility and a computer room. OHFA also announced at the meeting that it had received 105 applications requesting the LIHTC awards from the 2013 round. Awards from the 2013 funding round will be announced June 12.

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Connecticut Housing Finance Authority awarded $7.5 million in 9 percent LIHTCs to seven affordable housing developments. The money allocated to the properties will aid construction or rehabilitation of approximately 347 units in the cities of Bridgeport, New Haven, Hartford, Simsbury and Waterbury. It is anticipated that the 1,079 jobs will be created and according to Gov. Dannel P. Malloy’s office, $12.1 million in state revenue is also expected to be generated. The developments include St. Paul Commons in Bridgeport with 56 newly constructed units; Twin Acres in Hartford, which has 10 market-rate units and 40 for households earning between 25 and 60 percent of AMI; Summit Park in Hartford with 42 units in six historic structures; Fair Haven in New Haven, which will be 63 affordable housing units; Ribicoff Cottages in New Haven which will replace 100 obsolete public housing units with 100 new mixed-income housing units in two phases including 55 units for low income families and 34 units to replace existing senior/disabled units; Simsbury Specialty Housing in Simsbury will have 48 units affordable rental housing; South Main/East Liberty Apartments in Waterbury will include seven supportive units for U.S. Military veterans.

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The Northern Marianas Housing Corporation’s (NMHC’s) final 2013-2014 qualified allocation plan (QAP) was approved in April. NMHC will use the QAP to direct its award of $2.59 million in LIHTCs for 2013 and for a yet-to-be-determined amount of LIHTCs in 2014. The 2013-2014 QAP addresses a few key points that were not present or unclear in the 2012 QAP, including, which organizations are tax-exempt under Internal Revenue Code (IRC) 501(C)., energy efficiency and green building, application and compliance monitoring fees. This year, applicants must also submit a market study with their applications.

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DEALMAKERS

Phases two and four of the Northwest Gardens property broke ground in January. Carlisle Development Group teamed up with the Housing Authority of the City of Fort Lauderdale to produce this $58 million plan to redevelop the Northwest Neighborhood. The development will be on 14.42 acres and the two properties will consist of 13 one-, two- and three-story residential buildings with 266 affordable apartments, ranging from one to five bedrooms and 650 to 1,500 square feet. Community amenities will include clubhouses, fitness centers, a library, computer rooms and playgrounds. These two phases will also include green features, such as low emission paints, adhesives and carpets, water conserving plumbing fixtures and recycled products.

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Revere Run at Park Place will receive financing from Boston Capital and a loan from Boston Capital Finance (BCF). The 80-unit family development located on eight acres in Gloucester, N.J., will have 15 one-bedroom, 41 two-bedroom and 24 three-bedroom units in six three-story, townhouse-style buildings. Five units will be set aside for homeless youth as well as youth aging out of foster care. Community amenities will include a playground, an exercise area, a computer room and a laundry room. The development is for families earning 60 percent or less of the area median income (AMI).

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Dominium, a Minneapolis-based owner, developer, and manager of apartment communities has acquired six properties. Heritage Gardens, of Baldwin, Ga. is an 80-unit complex of one-, two- and three-bedroom townhomes, and is in need of updates and maintenance repairs. Built in 2006, work needs to be done on roofing, siding, parking, landscaping and irrigation. The company has also acquired the Sea Mist Townhomes in Rockport, Texas. Sea Mist includes 76 affordable townhouse units. Dominium will also become the owner and property manager of four other properties in Texas.

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Ramona Park Senior Apartments, an affordable senior housing community in Long Beach, Calif., had its groundbreaking in March. The 61-unit development will offer residents one- or two-bedroom units, and features a central courtyard, pool, spa, picnic area, fitness center, and class and recreation rooms. WNC provided $7 million in LIHTCs. Palm Communities partnered with nonprofit Western Community Housing to develop the property. The units will be available for residents 55 and older with incomes up to 60 percent of the AMI. The total cost is expected to be $22.5 million, and construction is scheduled to be completed in April 2014.

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Harrison Township, Ohio, has a new 25-unit, single-family developments. Fort McKinley Homes was developed by HomeStart Inc. and Oberer Residential Construction Company Ltd. Completed in January the Energy Star Homes are available for lease-purchase. Home styles include four-bedroom homes and one-story ranch homes, with community amenities included. The units were constructed using LIHTCs, Neighborhood Stabilization program funds, bond issuance from the Ohio Housing Finance Agency and financing through KeyBank. Residents have the option to purchase the homes after the 15-year compliance period.

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United North Corporation completed a new senior development in Toledo, Ohio in February. Crane’s Landing replaced the former Chase Elementary School, and is now a two-story, 40-unit apartment building. Property amenities include laundry facilities, storage, a wellness/fitness center, a library, a computer room and on-site social service coordination. Outdoor amenities include patios and walking paths to current and future parks. The development is located next to the forthcoming Metropark, which will include a 65-acre native wetlands marsh.

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PEOPLE IN THE INDUSTRY

Catherine Talbot joined Affordable Investment Advisors (AIA) as principal, alongside previous team members Greg Judge and Mike Caliva. Offer ing combined experience of 55 years the AIA team will provide services to the developer, investor and LIHTC syndicator communities. Previously, Talbot was a senior vice president at Boston Financial Investment Management (BFIM), and her duties included acquisitions in the Western U.S. as well as investment strategy. Judge held a number of roles at BFIM, including chief investment officer of lend/lease, president of MMA Financial and chief operating officer of BFIM. Caliva was a vice president and was responsible for structuring BFIM’s investment funds. Judge received a B.A. from Colorado College along with an MBA from Boston University; Talbot earned a B.S. from the University of New Hampshire and Caliva received a B.A. from Bentley College.

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Conrad Egan was named the chairman of the board of Community Preservation Development Corporation (CPDC), a nonprofit organization that works primarily with the development and revitalization of affordable housing. Egan’s qualifications for this position include: former executive director of the Congressional Millennial Housing Commission, chair of the Fairfax County Housing and Redevelopment Authority, former president of the National Housing Conference (NHC), past chairman and current board member of the Open Door Housing Fund, and current co-chair of the Fairfax County Affordable Housing Advisory Committee. Egan also held administrative roles within the U.S. Department of Housing and Urban Development (HUD), and was executive vice president of the National Housing Partnership and director of policy for the NHC. He returned to NHC in 2002 as president and CEO until 2010. Joining Egan on the board are recently appointed members Lee P. Reno and Phyllis Caldwell.

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Robert L. Levy was promoted to CEO of Centerline Capital Group, effective immediately. Levy joined the Centerline team in 2001, as director of capital markets. He previously held the positions of president, chief operating officer and chief financial officer of Centerline, and member of the board of trustees of Centerline’s parent company, Centerline Holding Company. Levy will maintain his position on the board of trustees. Before his time with Centerline, Levy worked at Robertson Stephens as a vice president in the real estate equity research and investment banking departments. He also worked at Prudential Securities and Prudential Realty Group in the real estate equity research group, and at Prudential Insurance Company, in real estate investment. Levy received a M.B.A. from the Leonard N. Stern School of Business at New York University, and a B.A. from Northwestern University.

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BRIDGE Housing, a nonprofit developer, owner and manager of affordable housing, hired Armando E. Zumaya to fill the new position of vice president of fund development. In this role, which he took on in April, Zumaya will work on fundraising strategies to expand BRIDGE communities programs. Zumaya previously worked as chief development officer at Playworks, a nonprofit organization that provides play and physical activity at recess. His duties there included raising $23 million a year through gifts, philanthropic and corporate contributions, and an annual fund. Zumaya’s 25 years of experience in developing and accomplishing fundraising programs came from his work as a national campaign director for University of California, Berkeley and a Reunion Campaign and Leaderships Gift Officer for Cornell University. Zumaya received a B.A. in political science and an M.A. in international relations from the University of California, Riverside.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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