Low-Income Housing Tax Credits News Briefs - May 2015

Friday, May 1, 2015

AFFORDABLE HOUSING INDUSTRY BRIEFS

On March 23, the Internal Revenue Service (IRS) released Notice 2015-23, which updates the resident population figures to be used by states and localities in calculating the 2015 calendar year state housing credit ceiling and the 2015 private activity bond volume cap and volume limit. Revenue Procedure 2014-61 determines the multipliers, with each state’s LIHTC ceiling in 2015 being the greater of $2.30 multiplied by the state population or $2.68 million. A state’s tax-exempt bond volume cap will be the greater of $100 multiplied by the state population or $301,515,000. Notice 2015-23 is available at www.taxcredithousing.com.

***


The IRS issued Notice 2015-27 March 16, inviting comments to the IRS and the U.S. Department of Treasury on recommendations for items to be included on the 2015-16 Guidance Priority List. The list identifies and prioritizes the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices and other published administrative guidance. The timeframe for the list will be July 1, 2015, to June 20, 2016.

***


Rep. Keith Ellison, D-Minn., reintroduced March 26 the Common Sense Housing Investment Act (H.R. 1662). The bill would increase the per-capita LIHTC ceiling allocation from $2.30 to $2.70. H.R. 1662 would also provide a 50 percent eligible basis boost for rental housing targeted to extremely low-income households (ELI). The bill also realigns the mortgage interest deduction by converting the mortgage interest deduction to a 15 percent flat rate tax credit on interest paid on mortgages up to $500,000, and lowers the deductible cap on allowable interest paid on a mortgage from $1 million to $500,000. The amendments would be effective for LIHTC allocations made in calendar year 2015 or later. H.R. 1662 would also expand Section 8 project-rental assistance and the public housing capital fund.

***


The Federal Housing Finance Agency (FHFA) released March 16, “FHFA Progress Report on the Implementation of FHFA’s Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac.” The progress report summarizes Fannie Mae and Freddie Mac activities in 2014 toward achieving FHFA’s conservatorship expectations under the 2014 scorecard. The first section of the report describes initiatives in 2014 in support of maintaining credit availability and foreclosure prevention activities. The second section covers activities in 2014 to reduce taxpayer risk by increasing the role of private capital in the mortgage market. The last section discusses the continued progress of Fannie Mae and Freddie Mac to build new infrastructure for the single-family securitization functions that will be adaptable for use by secondary market participants in the future. The report is available at www.novoco.com/hottopics.

***


On March 10, the National Low-Income Housing Coalition (NLIHC) released the report, “Housing Spotlight: Affordable Housing is Nowhere to be Found for Millions.” The data in the gap analysis is offered at a state, national and metropolitan level and is based on the 2013 American Community Survey. The gap analysis concludes that there is a shortage of available rental affordable housing units for the lowest income renter households. The report found that despite a growing need for affordable housing, rental units being built are only available to households with incomes above 50 percent of the area median income (AMI). The NLIHC Report is available at www.taxcredithousing.com.

***


The National Alliance to End Homelessness released April 1 the report, “The State of Homelessness in America: An Examination of Trends in Homelessness, Homelessness Assistance, and at-Risk Populations at the National and State Levels.” This report is the fifth in a series that charts the progress in ending homelessness in the United States. The report uses the most recent data available to represent the national and state trends in homelessness from 2013 through 2014. Also analyzed are trends in populations at risk of homelessness from 2012 and 2013, and trends in the types and use of assistance available to people experiencing homelessness. The report is divided into three chapters, with the first detailing the national and state trends in the overall homeless population and subpopulations. Chapter 2 presents trends in populations at risk of homelessness, including households experiencing severe housing cost burden and people living doubled up with family and friends. The third chapter analyzes the types and scope of assistance available to people experiencing homelessness and use of those resources.

***


The Center for Housing Policy (CHP) released the “Housing Landscape 2015” report March 17. The report summarizes the severe housing cost burdens of low- and moderate-income working households. In “Housing Landscape 2015,” working households are defined as households whose members work at least 20 hours per week on average and where household income does not exceed 120 percent of the area median income. CHP found that households are burdened by high housing costs and in turn, spend less on nonessential goods and services in their communities, which can impede economic growth. Housing Landscape 2015 also reveals that in 2013, one in four working renter households spent more than half its income on housing each month. In addition, this report looks at housing affordability trends by race and ethnicity for the first time. The report is available at www.taxcredithousing.com.

***


Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., announced March 18 the expansion of its affordable housing business. Bellwether Enterprise established a group dedicated to providing flexible financing resources to affordable, multifamily clients. The group will be led by Phil Melton, executive vice president, who will run the group out of the company’s Dallas office.

***


Enterprise Community Partners Inc. released the 2015 Enterprise Green Communities Criteria on April 7. The checklist provides an overview of the technical requirements within the Enterprise Green Communities Criteria. The criteria includes eight areas: integrative design, location and neighborhood fabric, site improvements, water conservation, energy efficiency, materials, healthy living environment, and operations, maintenance and resident engagement.

***


The National Council of State Housing Agencies (NCSHA) joined 50 organizations on March 26 in a sign-on letter to leaders of the U.S. House of Representatives and the U.S. Senate. The letter urges leaders to oppose eliminating or diminishing the tax-exempt status of municipal bonds. The organizations state that proposals to reduce or repeal the tax exemption would have a severely detrimental impact on national infrastructure development and the municipal bond market. The organizations close by asking the leaders to consider the fiscal year 2016 budget and urging them to make clear that any elimination or cap of the current tax-exempt deduction of municipal bond interest will not be included in any comprehensive tax reform effort. The letter is headed by the Don’t Mess with our Bonds Coalition, a coalition composed of state and local government associations dedicated to protecting the tax-exemption for municipal bonds, including private activity bonds.

STATE BRIEFS

The Washington State Housing Finance Commission announced $105 million in LIHTCs March 27 for the construction or rehabilitation of affordable rental housing. The awards will construct seven new developments and will rehabilitate one development, providing 575 affordable apartments across the state. Awards ranged from $5.1 million to $16 million. More information about the properties and awards is available at www.taxcredithousing.com.

***

On March 24, the Nevada Housing Division (NHD) published its annual affordable multifamily housing report, “Taking Stock: Nevada’s 2014 Affordable Apartment Survey.” The data in the report is based on the NHD’s LIHTC properties during the fourth quarter of 2014, which totaled 23,740 units statewide. The survey found that decreased vacancy trends highlight the need for more affordable housing, that the overall vacancy rate for LIHTC properties decreased by two points from 7 percent in the fourth quarter of 2013 to 5 percent in the fourth quarter of 2014, that there is a shortage of affordable senior housing throughout the state; and that waiting lists existed in more than 60 percent of LIHTC communities. The report is available at www.taxcredithousing.com.

***

The Kentucky Housing Corporation (KHC) announced March 16 the awards for funding for the 2014 LIHTC application round competing for 2015 program resources. KHC received 40 applications requesting $20 million in LIHTCs. Nineteen developments were funded with $9.2 million of 2015 credits in combination with other KHC resources. These resources included funds from the HOME Investment Partnerships program (HOME) and the Affordable Housing Trust Fund (AHTAF), totaling $1.8 million. More information is available at www.taxcredithousing.com.

***

On March 12, the Iowa Finance Authority (IFA) board of directors announced $7.8 million in LIHTCs and $4.9 million in HOME program awards. The LIHTC awards will go toward the construction or preservation of 13 affordable rental developments in nine counties and provide 523 affordable housing units. IFA received 23 applications requesting more than $13.2 million. The credits will be committed annually over a 10-year period. IFA also awarded HOME funds to support six rental housing tax credit developments.

***

The Wisconsin Housing and Economic Development Authority (WHEDA) released a memo March 19 announcing changes to the 2015-16 qualified allocation plan (QAP). The change is the modification of the 2015-16 QAP high impact project reserve (HIPR). WHEDA stated that it will continue to allocate HIPR credits through a 9 percent competitive LIHTC round to be held in late July. WHEDA will reserve a minimum of $850,000 in LIHTCs to be available for this round. The modification describes the threshold and scoring criteria that will be used to evaluate applications submitted in the 2015 HIPR round. A partial credit award will only be made if needed to reach the 10 percent nonprofit requirement mandated by the Internal Revenue Service (IRS), or the scenario in which credits have been returned or received by WHEDA that would otherwise expire if not allocated before the end of the year. The memo is available at www.taxcredithousing.com.

 

DEALMAKERS

Boston Capital announced March 24 its investment in Patriot Homes, a 24-unit apartment community in Boston. Developed with low-income housing tax credit (LIHTC) equity, the property will be available to individuals and families, with a preference for veterans. Patriot Homes and will yield 12 studio apartments, two one-bedroom and 10 two-bedroom units. There will be two buildings, including the rehabilitation and adaptive reuse of a two-story former police sub-station and a new three-story building. Units will be for residents earning no more than 60 percent of the area median income (AMI). Development costs will total $10 million and the development is expected to generate nearly $2.6 million in local salaries and create nearly 30 new jobs.

***

WNC, a national investor in real estate and community development initiatives, announced March 18 the completion of renovations for Sonoma Court Apartments in San Diego. WNC provided $4.4 million in LIHTC equity for renovations as well as the installation of energy-efficient modifications such as a solar photovoltaic generation system. Sonoma Apartments provides 61 units of affordable apartments in a mix of one-, two- and three-bedroom units. Amenities include a community room, a swimming pool, a centralized laundry facility, a picnic area and a playground.

***

Lancaster Pollard announced March 30 the closing of a $4.1 million LIHTC transaction for Village Tower, a Section 202 affordable senior housing property in Prescott, Ariz. The funding will go toward the acquisition and rehabilitation of the property. In addition, funding includes 4 percent LIHTCs and a tax-exempt private activity bond allocation. Village Tower has 60 units in a five-story building and operates with HUD project-based Section 8 Housing Assistance Payment (HAP) contracts on 100 percent of its units. Renovation plans include a new roof, new windows, unit refurbishment, new appliances, replacing the fire alarm system and other upgrades.

***

On April 25, the South Dakota Housing Development Authority’s (SDHDA) board of commissioners approved $2.78 million in LIHTCs for the development and rehabilitation of 12 properties across the state. The board also approved $5.64 million in HOME Investment Partnerships program funds and $1.09 million in Neighborhood Stabilization program 3 (NSP3) fund. The 12 developments will provide 206 newly constructed multifamily housing units, 17 newly constructed single-family housing units, 100 rehabilitated multifamily housing units and a rehabilitated single-family home. SDHDA received 14 LIHTC applications requesting more than $5.4 million and 18 HOME Investment Partnerships Program (HOME) applications requesting more than $11 million.

***

The Madison County Board approved a $600,000 HOME program loan March 28 for the rehabilitation of the Belle Manor complex in Alton, Ill. The Illinois Housing Development Authority also provided $595,000 in LIHTCs. The loan and LIHTCs will go toward a complete gut rehabilitation of the complex’s 60 rental units. The units are comprised of 15 one-bedroom apartments, 21 two-bedroom, 21 three-bedroom and three four-bedroom units. Of the available units, 10 percent will be accessible for those with physical impairments and 2 percent will be available for those with sensory impairments. There will also be new mechanical systems, plumbing, windows, doors and roof along with all interiors meeting the Enterprise Green Communities certification. Development plans also include the extension of an existing building to house a leasing office and community center. The Belle Manor complex will be rebranded as The Landings at Belle Meadows.

***

The Montana Board of Housing awarded $4.03 million in LIHTCs April 6 to the Missoula Housing Authority for the rehabilitation of River Ridge Apartments. Funding will go toward adding new safety features, tenant amenities and energy-efficient upgrades. There are plans to replace all the major heating and cooling systems, add insulation and replace 15-year-old windows, replace all appliances with Energy Star appliances and water-saving features, add a new security system, and put in automatic doors and lightning protections. The River Ridge complex provides 70 units available to low-income and disabled seniors earning either 50 percent or 60 percent of the AMI.

***

Housing Trust Group and developer partner AM Affordable Housing announced $9 million in LIHTCs April 7 for the construction of Courtside Family Apartments in Miami. Financing will also include $3.31 million in construction debt from Citi Community Capital; $7.5 million from the Southeast Overtown/Park West Community Redevelopment Agency; and a $1.75 million Miami-Dade County surtax loan. Courtside Family Apartments will yield 84 affordable apartments, four of which will be live/work lofts, in a six-story building. Units will be available for residents earning 60 percent or less of the AMI. Amenities will include a theater/media room, a basketball court, a covered outdoor barbecue area, a playground, a fitness center, a computer lab and a library. Courtside Family Apartments is the first of three phases of development on a four-acre site. Development costs for the first phase will total $22.8 million. The second phase will involve roughly 120 units of senior housing. A third phase has yet to be finalized but could include about 80 residential units. Construction will create nearly 150 temporary construction jobs and 35 permanent jobs. Development is expected to take 14 months.

***

On March 25, Allegrone, a construction company that provides construction management, general contracting, design-build and preconstruction planning services, announced $3.6 million in LIHTCs for the construction of Parsons Village in Easthampton Mass. Funding also included $200,000 from Community Preservation Act funds, $2.53 million in Massachusetts Department of Housing and Community Development subsidies and a $100,000 Housing for Everyone Grant from TD Bank’s TD Charitable Foundation. Parsons Village, located on a 4.3-acre parcel, will provide 38 affordable units of studio, one-, two- and three-bedroom apartments, as well as a community center and small park. Of these, eight units are reserved for families eligible for the Massachusetts Rental Voucher Program and who make less than 30 percent of the AMI. Another two units are fully handicapped accessible and another is equipped for people with sensory impairments. The remaining units are available for families making less than 60 percent of the AMI. Development costs will total $12 million. Construction is expected to begin in April and be complete in mid-August.

***

U.S. Bancorp Community Development Corporation (USBCDC), the community development subsidiary of U.S. Bank, announced March 10 a $15.8 million LIHTC equity investment for the construction of Hamline Station Apartments in St. Paul, Minn. U.S. Bank also $15 million in construction loans. The 108-unit affordable housing development for families and formerly homeless individuals will feature 15 studios, 36 one-bedroom, 44 two-bedroom units and 13 three-bedroom units in two four-story buildings. Of those, 14 units are designated as permanent, supportive housing for formerly homeless or disabled persons. Units will be available to residents earning between 30 percent and 60 percent of the AMI. Plans also include shops and a restaurant. Construction is expected to be complete by January 2016 and costs will total $28.2 million.

***

Lancaster Pollard announced March 30 the closing of a $4.1 million LIHTC transaction for Village Tower, a Section 202 affordable senior housing property in Prescott, Ariz. The funding will go toward the acquisition and rehabilitation of the property. In addition, funding includes 4 percent LIHTCs and a tax-exempt private activity bond allocation. Village Tower has 60 units in a five-story building and operates with HUD project-based Section 8 Housing Assistance Payment (HAP) contracts on 100 percent of its units. Renovation plans include a new roof, new windows, unit refurbishment, new appliances, replacing the fire alarm system and other upgrades.

 

PEOPLE IN THE INDUSTRY

The Woda Group Inc. and Woda Construction announced March 10 the addition of two employees. Nicholas Sojda joined Woda Construction Inc. as a director of construction in October 2014. He is responsible for construction leadership, planning, forecasting and oversight for the Woda Construction team. Sojda was previously director of construction at Cleveland Housing Network. Garrett LeDonne joined The Woda Group Inc. in March as the vice president of finance. LeDonne is responsible for underwriting housing tax credit and market rate investments, and also secures financing and reviews housing tax credit applications. Before joining Woda, LeDonne worked for Caesars Entertainment as a senior analyst.

***

On March 24, Candeur Group LLC announced a joint venture with Steven Fayne, the former managing director in Citigroup’s affordable housing division. The new partnership will focus on affordable housing lending and investing. This will include a CDFI lending facility, low-income housing tax credit (LIHTC) investing partnerships and other investment banking products. Fayne has worked as managing director at ARCS Commercial Mortgage, GMAC Commercial Mortgage and Citigroup Global Markets Inc. He also formed Eichler Fayne, a delegated underwriter servicer (DUS) mortgage firm.

***

Nixon Peabody announced April 3 the promotion of Sonia A. Nayak to counsel in the firm’s real estate and community development department. She will focus on the new markets tax credits (NMTCs) and LIHTC programs. She will represent developers, lenders and investors in financing and developing commercial real estate properties.

 

BOND

The California Housing Finance Agency (CalHFA) announced April 1 the creation of the Conduit Issue program, a new option to create and preserve affordable multifamily rental housing by helping affordable housing developers access tax-exempt and taxable bond funds. The CalHFA program is available to for-profit and nonprofit developers. The program is designed to streamline processes and compliance monitoring. Nonprofit developers will receive additional discounts for loans totaling $20 million or more. More information is available at www.calhfa.ca.gov.