Low-Income Housing Tax Credits News Briefs - November 2010

Monday, November 1, 2010

AFFORDABLE HOUSING INDUSTRY

As its final action before adjourning for midterm elections, Congress passed a continuing resolution (CR) that will continue funding all federal government agencies, including the U.S. Department of Housing and Urban Development, at fiscal year (FY) 2010 levels. Congress passed the CR, which expires December 3, before the October 1 start of the new fiscal year because it has not completed work on FY 2011 appropriations bills. In addition to continuing funding, the CR includes a provision to extend the authorization for the Federal Housing Administration, Fannie Mae and Freddie Mac to buy and guarantee mortgages of as much as $729,750 through September 30. The CR also continues the Section 502 Single-Family Rural Housing Guaranteed Loan program through December 3. The National Council of State Housing Agencies says Congress will likely combine the individual spending bills into an omnibus bill to complete FY 2011 appropriations before the CR expires.

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Fannie Mae’s Housing and Community Development division is now called Multifamily Mortgage Business (MMB), to parallel its Single-Family Mortgage Business. Fannie Mae officials said the new name clearly conveys what the business does and emphasizes the MMB platform. More information is available at www.fanniemae.com.

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Thirty-three states showed improvement in Global Green USA’s sixth annual Qualified Allocation Plan (QAP) Green Building Rating Summary, released in October. The average score rose to 33 from last year’s 30, and the results also showed that nearly two-thirds of states’ QAPs include Global Green’s top 15 most referenced green building strategies. Connecticut and Georgia tied for the top position for the second year in a row, scoring 50 out of a possible 55, followed by Maryland, New Jersey, Colorado, Washington, Rhode Island, Massachusetts, Minnesota and New York in the top 10. Global Green USA releases the annual ranking and QAP green building trends summary in four categories – smart growth, energy efficiency, resource conservation and health protection – as part of its Green Affordable Housing Initiative. Download a copy of the QAP Green Building Rating Summary at www.taxcredithousing.com.

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The U.S. Department of Agriculture (USDA) announced that 163 recipients will receive funding to repair and improve housing for low- and very-low-income rural residents. USDA Rural Development Housing Preservation Grants may be combined with state and local funds, and may be used to make general repairs such as installing or improving plumbing, enhancing access for people with disabilities or making weatherization and energy-efficiency upgrades. A complete list of organizations selected to receive the grants is available at www.usda.gov.

DEALMAKERS

National Equity Fund (NEF) acquired Homestead Capital, a Portland, Ore.-based low-income housing tax credit (LIHTC) syndicator with $483 million in affordable housing investments across nine states. NEF will integrate Homestead into its existing operation, maintaining its Portland presence as part of NEF’s Northwest acquisitions and asset management strategy. NEF says the transaction was fueled in part by economic turbulence, which hurt some state and regional syndicators. The two companies had been working closely since spring in anticipation of the acquisition.

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Citi, Highridge Partners and Michael Costa have formed a new company, Highridge Costa Housing Partners (HCHP), to own general partnership interests in and manage an existing $3.4 billion LIHTC portfolio of 275 affordable multifamily properties. Citi will contribute a previously foreclosed portfolio; Highridge Partners will provide required new equity capital, capital markets relationships and a strategic financial management perspective; and Costa will bring business operations and tax credit syndication experience. The HCHP portfolio comprises family and senior communities in 34 states and Puerto Rico. HCHP said it will continue to develop LIHTC communities, primarily in California, and expects to partner with other financial institutions including Bank of America and J.P. Morgan Chase.

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RBC Capital Markets’ Tax Credit Equity Group (TCEG) celebrated the dedication of Edith Witt Senior Community on October 14. TCEG was the syndicator on $17.6 million of equity into the project. Edith Witt is located at 9th and Jessie Streets in the heart of San Francisco’s Civic Center. Developed by Mercy Housing California, the 11-story high rise apartment building will provide 107 units of affordable housing to seniors. Health/wellness and recreational services are available onsite through Catholic Charities. The property exhibits several green features, including water conserving appliances and fixtures, efficient irrigation, Energy Star appliances and no or low VOC materials used throughout the property.

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Real estate and property management firm Kettler Inc. closed a $35.4 million acquisition of two multifamily properties, The Fields of Alexandria and The Fields of Old Town. The properties were owned by a joint venture that included Kettler and SunAmerica, and the company said it will continue to operate both properties as LIHTC communities. Kettler has earmarked $5.5 million to fund renovation projects to include roof replacement, parking lot resurfacing and appliance upgrades. The Virginia Housing Development Authority issued tax-exempt bonds to finance much of the acquisition and capital improvements.

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Stratford Capital closed its multi-investor Stratford Fund III Limited Partnership (Fund III), a $50 million LIHTC investment limited partnership that comprises six institutional investors, including a Stratford Capital affiliate. The company’s multifamily housing portfolio consists of 6,680 units in 17 states and the District of Columbia.

STATE

Oregon Housing and Community Services (OHCS) committed more than $34 million to help fund 913 affordable housing units. The agency awarded the funds to 23 housing developments and selected three others for further consideration. The development types include 12 new construction, 13 acquisition and rehabilitation, and one rehabilitation project. In the current round, OHCS forward-allocated low-income housing tax credits (LIHTCs), HOME, General Housing Account program and Housing Trust Fund dollars.

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In other updates the Oregon Housing and Community Services’ (OHCS) legislative counsel drafted several bills on the organization’s behalf in preparation for the 2011 legislative session. OHCS says legislative concept (LC) 630 would increase the Oregon Affordable Housing Tax Credit’s flexibility by creating a new fund under OHCS’ control; allowing lenders that are unable to use their entire allocation to relinquish unclaimed credits to OHCS; enabling OHCS to reallocate unused credits to individual taxpayers; and permitting a taxpayer to carry forward unused credits for two years. LC 631 would expand the definition of farmworker so that the state farmworker housing tax credit program can work more effectively with other programs and clarify permitted credit uses. More information about the legislative concepts is available at www.oregon.gov/ohcs.

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The Arizona Department of Housing (ADOH) announced the availability of $4 million through the state housing fund (SHF) for the preservation or development of affordable multifamily rental properties. The SHF is composed of funds from the HOME program and the Housing Trust Fund. ADOH will allocate the funds through a competitive funding round and applications are due by 4 p.m. on November 30. The program summary and application guide can be downloaded from www.azhousing.gov.

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New York’s top housing official Brian Lawlor announced the merger of nyhomes and the Division of Housing and Community Renewal (DHCR) to form a new organization, New York State Homes and Community Renewal (HCR). Lawlor, now HCR commissioner and CEO, said the integration is expected to better align and coordinate the state’s housing and community development programs and resources. The state has reorganized programs previously administered by the Housing Trust Fund Corporation, the State of New York Mortgage Agency, the Housing Finance Agency, the Affordable Housing Corporation and DHCR into three units – finance and development, housing preservation, and community renewal – that will operate under a single leadership structure. The integration is part of Gov. David Paterson’s directive to consolidate numerous state agencies to reduce costs and increase transparency and accountability. View remarks from the meeting and a presentation online at www.housing.ny.gov.

PEOPLE IN THE INDUSTRY

Enterprise Community Partners Inc. appointed Terri L. Ludwig its president and CEO effective January 1, 2011. Ludwig has 25 years of experience in investment banking and not-for-profit leadership, and most recently served as Enterprise’s executive vice president and chief operating officer. She will succeed Doris W. Koo, who has held the position since 2007 and will assume the position of senior advisor after December 31. From 2002 to 2009, Ludwig served as president of Merrill Lynch Community Development Company, where she led community development, committed more than $2 billion in loans and investments, and launched a social investment platform for the firm’s private clients. She is also an appointee to the U.S. Department of the Treasury Advisory Board for Community Development and Financial Institutions and ACCION USA’s board co-chair. Ludwig holds a bachelor’s degree from the University of Illinois and a master’s degree from Harvard University.

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The National Housing Conference hired Mary Hanlon as its vice president of policy and advocacy. Hanlon has 25 years of experience working in the housing industry with a focus on real estate development and complex project management. For the past 14 years, she has been the principal and owner of Hanlon Development & Consulting, where she provided consulting services on issues including housing, bond and tax credit financing, commercial and mixed-use developments, and sustainable design. She also served as senior staff member with the U.S. Department of Housing and Urban Development. Hanlon earned a bachelor’s degree from the University of California Berkeley.

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Margaret Lineberry joined the Missouri Housing Development Commission (MHDC) as its executive director. Prior to taking this position, she practiced law with Lineberry Law Firm and with Shook, Hardy & Bacon, where she served as chair of the firm’s business litigation section. Lineberry’s 31-year legal career focused on housing, real estate development, construction, architecture, engineering and project finance.

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Community Housing Partnership elected Steve Bowdry to its board of directors. He has more than 20 years of commercial real estate experience and formerly served on the organization’s fundraising committee. Bowdry offers financial management services for real estate through his company, Bowdry Properties. He has also worked with AMB Property Corp., Jones Lang LaSalle and Prometheus Real Estate Group.

BONDS

The Maryland Department of Housing and Community Development (DHCD) closed financing on the acquisition and rehabilitation of four affordable rental properties under loans funded by the New Issue Bond Program (NIBP). NIBP will provide $31.9 million in tax-exempt bonds to preserve 495 units in Calvert, Charles, Howard and St. Mary’s counties. The properties are the first in Maryland funded through NIBP, and include Silverwood Farm Apartments, which received $12.5 million; La Plata Manor, which received $7.3 million; Park View at Columbia, which received $4.9 million; and Indian Bridge Apartments, which received $7.1 million.

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Developer L.A. Family Housing held a groundbreaking ceremony for a special needs community in Los Angeles, Calif. Glenoaks Gardens offers 60 studio apartments for single adults who have been homeless and live with mental illness. The community will feature on-site support services, sustainable design and close proximity to public transportation. The more than $20 million development received a $6.2 million tax-exempt bond allocation from the California Department of Housing and Community Development, $4.5 million from California Housing Finance Agency, $4.1 million from Los Angeles Housing Department and more than $5.1 million in investor equity. Glenoaks Gardens is scheduled to open in 2011.