LIHTC Industry

The Federal Housing Finance Agency (FHFA) March 23 announced that Fannie Mae and Freddie Mac will offer mortgage forbearance to multifamily property owners affected by the COVID-19 pandemic, with the condition that they suspend evictions for tenants who can’t pay rent due to the pandemic. The forbearance is available to all multifamily properties with a Fannie- or Freddie-backed mortgage and the eviction suspensions are in place for the duration of the time a property owner remains in forbearance.

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The three agencies that oversee compliance with the Community Reinvestment Act (CRA) March 19 released a letter encouraging financial institutions to work with customers and communities affected by the COVID-19 pandemic, particularly low- and moderate-income communities. The agencies jointly said they will provide favorable CRA consideration for certain banking services, retail lending activities and community development activities related to the national emergency.

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Rep. Maxine Waters, D-Calif., introduced legislation March 23 that would suspend tenant contributions toward rent for renters in assisted housing during the COVID-19 pandemic, ban evictions and foreclosures and provide monthly direct payments of up to $2,000 per eligible adult. The Financial Protections and Assistance for American’s Consumers, States, Businesses and Vulnerable Populations Act (H.R. 6321) would also allow tribes and tribally designated housing entities to access federal homeless assistance grant funding to address homelessness on tribal lands; would provide $15 billion for Community Development Block Grant funding; would provide $1 billion for the Community Development Financial Institutions Fund to support small businesses and low-income communities and approximately 40 other provisions.

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The U.S. Department of Agriculture Rural Development March 25 took several actions related to the COVID-19 pandemic, including changes for multifamily housing. Among the actions for multifamily housing were to extend tenant certifications that were due March 31, April 30 and May 31 to a June 30 deadline with no late fees or overage charges; extend the deadline for Section 515 annual financial statements that were due March 31 by at least 30 days; and waive late fees on Section 515 mortgages. Rural Development also encouraged owners to work with impacted residents and families, but clarified that no additional subsidy funds are currently available.

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The National Low Income Housing Coalition (NLIHC) April 7 released an analysis showing that Congress must invest up to $100 billion over the next year to keep lowest-income households stably housed in the wake of the COVID-19 pandemic. “The Need for Emergency Rental Assistance During the COVID-19 Economic Crisis” makes the case that the number of extremely low- and very low-income renter households will swell from 10 million to at least 11.5 million due to the pandemic. The NLIHC calls for the national Housing Trust Fund to be expanded, the U.S. Department of Housing and Urban Development’s housing choice voucher program to be sufficiently funded and for public housing funding to increase.

LIHTC State

The California Tax Credit Allocation Committee (CTCAC) announced March 18 that the readiness-to-proceed deadline for 2019 second-round low-income housing tax credit (LIHTC) awardees with a 180-day deadline has been shifted to a 194-day deadline. CTCAC also announced that it will not rescind a 2019 LIHTC reservation for failure to meet readiness-to-proceed requirements due to complications arising from the COVID-19 pandemic. At a CTCAC meeting April 3, further scheduling and deadline changes were made. The readiness-to-proceed deadline for 2019 second round awards is now July 6, and the next 4 percent credit application deadline is May 15.

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Legislation signed into law March 28 in Utah allows state and federal LIHTCs to be transferred and provides a one-time extra allocation to the Olene Walker Housing Fund. Under S.B. 39, the state Legislature will allocate $10 million to the Olene Walker Housing Loan Fund in fiscal year 2021, with half going to gap financing for private-activity bond financed multifamily property and half to match private dollars for the preservation or construction of affordable housing. The Legislation was generally effective March 12.

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The Arizona Senate Appropriations Committee passed a bill Feb. 18 to create an affordable housing tax credit worth at least 50 percent of the federal low-income housing tax credit. H.B. 2732 would institute the credit for taxable years beginning Jan. 1, 2021, and would apply to properties placed in service after June 30, 2031. There would be a statewide annual cap of $8 million. 

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The Chicago Department of Housing announced March 30 that 11 affordable housing developments were selected to receive federal LIHTC allocations. The development cost of the 11 properties is nearly $400 million and the developments are expected to generate an estimated $126.2 million in private resources and equity.

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The Vermont Housing Finance Agency announced its annual allocation of federal LIHTCs March 30 to five affordable housing developments in the state. The developments are expected to create 130 permanently affordable apartments and the credits are expected to yield an estimated $24 million in equity.

LIHTC Dealmaker

Steele Properties announced March 31 the acquisition and rehabilitation of Shadyway Plaza in Wichita, Kan. Shadyway Plaza is a project-based Section 8 development that provides 100 affordable homes for seniors and those with disabilities. The rehabilitation is financed by 4 percent low-income housing tax credits (LIHTCs), tax-exempt bonds issued by the city of Wichita, tax credit equity provided by National Development Council and permanent and construction financing provided by KeyBank.

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Boston Capital announced its investment April 7 in the preservation of Spring Street Johnson Circle in Franklin, Tenn. The renovation is financed by LIHTC equity and will provide 64 affordable homes to families and individuals who earn at or below 60 percent of the area median income (AMI).

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WNC announced March 31 the closing of WNC Institutional Tax Credit Fund 48 LP, which raised $128.5 million in LIHTC equity. The equity will be used to develop and renovate more than 1,600 affordable housing units across nine states. The funding will help preserve and develop 18 veteran, family and senior affordable housing communities in Arkansas, California, Connecticut, Iowa, Louisiana, Montana, South Dakota, Tennessee and Texas.

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Dominium announced March 27 the construction of Crossroad Commons in Austin, Texas. The development will provide 216 affordable homes for families, and is expected to be completed in 2021. The development cost is $64 million and is financed in part by a 4 percent federal LIHTC equity from Alliant Capital and a Freddie Mac forward tax-exempt loan (TEL) serviced by Citibank.

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Woda Cooper Companies Inc. announced March 17 that it will create an interim rental assistance fund and waive late rent fees for residents whose jobs are directly impacted by the COVID-19 pandemic. The interim rental assistance fund of $250,000 will assist residents of its properties who have been laid off or furloughed and Woda Cooper Companies has asked vendors, lenders and investors to match the first $250,000 of contributions received to add to the fund.

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MassHousing announced $9.9 million in financing March 16 for the acquisition, renovation and preservation of Colonial Village Apartments in Weymouth, Mass. The development will provide 79 apartments to households earning at or below 60 percent of the AMI and nine apartments for those earning at or below 30 percent of AMI. Twenty-three of the 89 apartments will be supported by a Massachusetts Rental Voucher Program rental subsidy contract. MassHousing is supporting the transaction with $9.9 million in tax-exempt obligations through the agency’s conduit loan program and financing from MassHousing also generated $3.7 million in federal LIHTC equity.

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Steele Properties announced March 11 the $12.2 million acquisition and rehabilitation of Lexington House in Lexington, Va. The development provides 78 project-based Section 8 apartments for seniors and those with disabilities. The development is financed by 4 percent LIHTCs allocated by Virginia Housing Development Authority, tax credit equity provided by Raymond James, tax-exempt bonds issued by the Industrial Development Authority of the city of Lexington and permanent and construction financing provided by Redstone Tax Exempt Funding.

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Dominium announced March 6 the successful closing of Pinewood Apartments in Houston. The LIHTC development, formerly known as Timber Point, contains 240 apartments for working families and individuals. The development was built in 2001 and financed using tax-exempt bonds and 4 percent LIHTCs from the Texas Department of Housing and Community Affairs (TDHCA). Dominium will be working to transition the property into Pinewood apartments using new tax credits from TDHCA.