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Low-Income Housing Tax Credits News Briefs - November 2011

AFFORDABLE HOUSING INDUSTRY

Freddie Mac, which in June required lenders to apply for a special national designation to continue to sell and service multifamily senior housing conventional loans to the company, approved 12 lenders. Applicants underwent a rigorous qualification process that included demonstrating GSE loan origination and underwriting experience for senior housing properties. The 12 lenders are Berkadia, CBRE Capital Markets Inc., CWCapital LLC, Grandbridge, KeyCorp Real Estate Capital Markets Inc., NorthMarq Capital LLC, Oak Grove Commercial Mortgage LLC, PNC Bank NA, Prudential Affordable Mortgage Company, Red Capital Group, Walker & Dunlop and Wells Fargo Bank NA.

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CWCapital announced the launch of a new affordable housing platform based in New York. The platform will be led by Andrew Weil and Justin Ginsberg, who have joined the firm as managing directors. They will be responsible for building, managing and growing the new platform by raising and investing low-income housing tax credit (LIHTC) institutional investment funds, overseeing the financing of affordable properties through Fannie Mae, Freddie Mac and the Federal Housing Administration, and developing new affordable housing finance products.

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The multifamily housing market continued to show improvement while the number of industry-perceived unit vacancies increased slightly in the second quarter of 2011, according to the National Association of Home Builders (NAHB). The Multifamily Production Index (MPI) increased for the fourth consecutive quarter, from 41.7 in the first quarter of the year to 44.4 in the second quarter. This marks the highest quarterly reading since 2006, and continues the multifamily housing construction market's upward trend, NAHB said. The Multifamily Vacancy Index (MVI), which measures the multifamily housing industry's perception of vacancies, increased slightly from 35.0 in the first quarter of 2011 to 36.1 in the second quarter. Lower numbers in the MVI indicate fewer vacancies. These indices and other data tables are available at the National Association of Home Builders.

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The Urban Land Institute (ULI) Terwiliger Center for Workforce Housing announced the winners of the 2011 Jack Kemp Workforce Housing Models of Excellence Awards and the Robert C. Larson Workforce Housing Public Policy Award. The awards recognize exemplary achievements in workforce housing by an individual, the development community and public policy makers. The recipients of this year's Jack Kemp awards are The Hayes at Railroad Square in Haverhill, Mass.; Tapestry in East Harlem, N.Y.; Columbia Commons/Columbia Hicks in Brooklyn, N.Y.; and On the Park in Seattle, Wash. The recipient of the first Robert C. Larson award is the city of San Jose, Calif. More information about the awards and this year's winners is available at the Urban Land Institute.

DEALMAKERS

Wells Fargo and Related Companies Capmark Financial Group Inc. announced that it closed on the sale of its low-income housing tax credit (LIHTC) asset portfolio to the Hunt Companies Inc. Hunt was the successful bidder in Capmark's bankruptcy auction of these assets, which went for a total of $102.4 million. According to the terms of the purchase agreement, the transaction will be closed in stages, with $63 million of the total included in the initial closing completed on October 7. Capmark anticipates that Hunt will purchase the remainder of the portfolio, subject to receipt of certain third-party consents and satisfaction of other conditions. A break-up fee of approximately $2.8 million was paid to the stalking horse bidder in the auction.

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EAH Housing plans to use its recent LIHTC award to build or renovate 656 apartments in seven communities in California and Hawaii. EAH will sell the credits to help raise the approximately $179 million needed to finance three new developments and two rehabilitations in California, and one new development and one rehabilitation in Hawaii. In California, Archway Commons in Modesto, Avena Bella in Turlock and Cathedral Gardens in Oakland are set to break ground in early 2012; the two properties to be rehabilitated, Elena Gardens in San Jose and Los Robles in Union City, will receive extensive energy upgrades that include cool roofs, high-performance insulation, dual pane windows, solar power, and high-efficiency water heaters. EAH will break ground in January on 28 affordable units at Imi Ikena, on Maui, and acquire and rehabilitate the Kahuku Elderly Hauoli Hale senior community on Oahu.

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Morgan Stanley and National Equity Fund (NEF) announced that they are expanding the $100 million Rebuilding Local Economies Fund to other states that were severely impacted by Hurricane Irene. Morgan Stanley established the fund in June to support recovery efforts in states affected by spring flooding and tornados. In addition to the 13 states it covered initially, and other states that it expanded to include after subsequent flooding, the fund will now encompass counties in states that were hard-hit by the hurricane, including Connecticut, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont and Virginia. NEF is managing the fund and has added $4 million in predevelopment lending to help projects move forward quickly. It is anticipated that the fund will replace as many as 1,000 units of affordable housing and create approximately 4,000 jobs. A complete list of eligible areas is available at the National Equity Fund. See the August 2011 Novogradac Journal of Tax Credits for more information about the fund.

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Billionaire investor Warren Buffett helped finance a $27 million apartment community in Indianapolis, Ind. Part of a larger redevelopment aimed at revitalizing a blighted neighborhood where the crime-ridden Meadows complex once stood, East Village at Avalon has eight financing layers, including an investment from Purpose-Built Communities, which Buffett co-founded. The developer, Strategic Capital Partners, received $19 million in tax credits that it sold to the National Equity Fund to finance construction of the 248-unit apartment complex. The city also provided $5 million in tax credits.

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Residents, neighbors and community developers celebrated the grand opening of St. Dennis Apartments in Washington, D.C.'s Mt. Pleasant neighborhood. The community received nearly $4 million in renovations, including energy efficiency upgrades, a new roof, windows, unit reconfiguration, new individual HVAC systems, new wiring, new domestic water systems, new kitchens and new baths. The National Housing Trust-Enterprise Preservation Corporation (NHT/Enterprise) raised $9.7 million to acquire and redevelop St. Dennis after low-income tenants successfully sued the property's former owner, which sought to convert the building into luxury condominiums, for right of first purchase. The settlement included the option to purchase the property at market value, and tenants selected NHT/Enterprise to assist in securing financing. Funding sources included 9 percent LIHTC equity syndicated by Enterprise Community Investment, federal historic tax credits, Section 1602 LIHTC exchange funds and a Federal Home Loan Bank grant.

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The Core Companies and EAH Housing celebrated the grand opening of Cornerstone at Japantown, an affordable housing community in San Jose, Calif. The 53 three-story townhomes house working families and older adults or persons with disabilities, and feature in-unit laundry machines and attached garages. The community also has landscaping, a courtyard and an onsite clubhouse. Cornerstone is the result of a partnership of the City of San Jose Housing Department, the American Recovery and Reinvestment Act, the California Tax Credit Allocation Committee, Hudson Housing Capital, JPMorgan Chase Bank, the California Community Reinvestment Corporation and The Housing Trust of Santa Clara County.

STATE BRIEFS

New York State Homes & Community Renewal announced 35 awards under the agency's competitive Unified Funding Awards. Applicants competed for funds available through programs including the Low-Income Housing Trust Fund, HOME, and federal and state low-income housing tax credits (LIHTCs). Each of the state's 10 economic development regions received awards, which leveraged a total of $510 million in public and private investment. Among the awards' notable achievements are 10 awards that will provide 329 units of fully integrated supportive housing for persons with special needs; two developments that will provide 46 units for veterans; and two preservation projects. A list of funding awards is available at the New York State Homes & Community Renewal site.

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Ohio Housing Finance Agency (OHFA) invited its customers to submit questions about the 2012 qualified allocation plan (QAP), which is available on OHFA's web site. The agency will organize questions and post the answers on a Frequently Asked Questions page under the online QAP. The agency also announced that applications for the next LIHTC funding round are due November 17. More information is available at the Ohio Housing Finance Agency.

PEOPLE IN THE INDUSTRY

Maureen Friar has resigned as president and CEO of the National Housing Conference (NHC). NHC's senior management team and board of directors announced that they are finalizing interim leadership plans and have begun a national search for a new president and CEO.

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Margaret Shephard Van Vliet was appointed as director of Oregon Housing and Community Services (OHCS). Acting director Rick Crager has returned to his role of deputy director. Before joining OHCS, Van Vliet served as director of the Portland Housing Bureau for the city of Portland. Van Vliet formerly worked with the Housing Authority of Portland as deputy executive director and as deputy director for housing management and development. She holds a bachelor's degree from Linfield College and a certificate for local government senior executives from Harvard University.

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Members of the National Council of State Housing Agencies (NCSHA) elected officers to their board of directors. Individuals who were re-elected include board president Gerald Hunter, of the Idaho Housing and Finance Association; vice president Brian Hudson, of the Pennsylvania Housing Finance Agency; and secretary/treasurer Tom Gleason of MassHousing. Rick McQuady of Kentucky Housing Corporation was elected at-large executive committee member.

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Christopher Long joined AEGON USA Realty Advisors as vice president. He will lead the acquisitions arm of the firm's community investments group, which manages the analysis, underwriting, negotiation, documentation and closing of low-income housing tax credit (LIHTC) investments. Before coming to AEGON, Long served Bank of America for 20 years, most recently as senior vice president in charge of a national equity investment group focused on LIHTC originations.

Journal Category:

Low-Income Housing Tax Credits

Authors:

Novogradac

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