Low-Income Housing Tax Credits News Briefs – October 2019

Tuesday, October 1, 2019

The U.S. Treasury Department and the U.S. Department of Housing and Urban Development (HUD) released plans on Sept. 5 that include recommendations for reforms concerning housing finance reform. The Treasury Department’s report makes 49 recommendations and addresses government-sponsored entities (GSEs) Fannie Mae and Freddie Mac and continuing to end their conservatorship. These recommendations include having each GSE recapitalized so that private capital takes a first-loss position on GSEs’ exposure to risk and loss. The report also recommends replacing the GSEs’ statutory affordable housing goals with a mechanism to deliver support to first-time homebuyers, low-and moderate income rural and other underserved borrower; and revisiting GSEs’ underwriting criteria for multifamily loans to align them with rent-control laws or other impediments to housing developments. The report from HUD makes 67 recommendations which include restructuring the FHA to be an autonomous corporation under HUD, separating the mortgage insurance form rental subsidy administration within the FHA and lifting the 455,000-unit cap in the Rental Assistance Demonstration program. 

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Issues concerning the low-income housing tax credit (LIHTC), historic tax credit (HTC) and new markets tax credit (NMTC) remain part of the Treasury Department’s 2018-2019 Priority Guidance Plan. The fourth-quarter update, released Aug. 28, includes plans to provide guidance for the LIHTC average-income test, guidance on the use of private-activity bonds for affordable housing, a revenue procedure concerning the use of the HTC with disaster relief and regulations to clarify rules for the NMTC. The Priority Guidance Plan covers the period from July 1, 2018, through June 30, 2019, and includes a list of projects that were completed, including two tranches of guidance for the opportunity zones incentive and final regulations concerning LIHTC compliance monitoring and utility allowances.

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The Office of the Comptroller of the Currency released a list Aug. 8 of Community Reinvestment Act (CRA) performance evaluations for July. Of 42 evaluations made public, 33 were satisfactory, seven were outstanding and two were need to improve. The list includes national banks, federal savings associations and insured federal branches of foreign banks.

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On Aug. 27, the OCC released its schedule of CRA evaluations for the fourth quarter of 2019 and the first quarter of 2020. The OCC seeks public comments on the national banks and federal savings associations that are scheduled for evaluation. Comments can be sent to the institution themselves and can also be sent to the appropriate OCC supervisory office before or as early as possible during the month of the evaluation.

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Bellwether Enterprise announced July 30 the opening of its first office in Nashville, Tenn. Bellwether’s Nashville office will begin operation this fall and will offer financing for all major property types, including multifamily, office, industrial and retail. Bellwether is the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investments.

LIHTC State

The Texas Department of Housing and Community Affairs (TDHCA) announced awards July 31 through the 2019 Housing Tax Credit program. TDHCA will provide $79.5 million in housing tax credits to developers to build or rehabilitate 68 low-income housing properties across the state. Of these 68 properties, 52 will be new properties with 3,822 units, and 16 will be rehabilitations, providing 1,148 units. As of December 2018, 260,000 affordable housing units were built or preserved in Texas since 1987 using the low-income housing tax credit (LIHTC) program. The economic impact generated by the construction and rehabilitation of developments for the state was approximately $4.4 billion. 

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The Maryland Department of Housing and Community Development announced July 31 that it awarded 15 properties more than $22.5 million in state rental housing funds and another $21.7 million in federal 9 percent LIHTCs. Also included are $5 million in noncompetitive 4 percent LIHTCs. The $44 million in funding will help to create or rehabilitate 1,837 high-quality affordable homes across the state, the largest number of units financed in the history of the LIHTC program.

LIHTC Dealmaker

Hunt Capital Partner and LDG Multifamily LLC announced their partnership Aug. 19 in the construction of Union Landing Apartments, a low-income housing community in Union City, Ga. The $43.5 million development will provide 240 affordable housing units and is projected to be completed in October 2020. Hunt Capital Partners syndicated $23.4 million in federal and state LIHTCs to Aetna, a CVS Health Company. Citibank provided a $34.7 million bifurcated construction loan as well as $19.6 million in tax-exempt permanent financing to fund the development. 

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Aegon Real Assets U.S. announced the closing of a $151 million national LIHTC fund Aug. 8. Aegon RA will also provide ongoing fund oversight and asset management services for the investments, which are expected to comprise investments in 14 partnerships with affordable housing multifamily properties in nine states. Bank of America Merrill Lynch acted as the placement agent for the funds.

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Hunt Capital Partners announced the financial closing of Magens Junction II in St. Thomas, U.S. Virgin Islands, Aug. 6. The property, built by Jackson Development Company, is a 60-apartment second phase, following the 48-apartment first phase, which is 100 percent occupied. Magens Junction II is scheduled to be completed in early 2021 and will provide 30 one-bedroom and 30 two-bedroom apartments, with modern appliances and design upgrades. The cost is $34.9 million and Hunt Capital Partners syndicated $30.5 million in 9 percent LIHTC equity through a proprietary fund with Citi Community Capital.

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WinnDevelopment and the New Jersey Housing and Mortgage Finance Agency celebrated a ribbon-cutting ceremony July 30 to mark the completion of the two-phase rehabilitation of Ivy Square Apartments, which included the overhaul of a 156-apartment community for families. The acquisition-rehabilitation development included the modernization of the complex, including upgraded kitchens and bathrooms, upgraded HVAC systems and exterior work. Phase 1 involved $6.4 million in LIHTC equity and Phase II included $11.3 million in LIHTC equity. 

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Mass Housing announced the closing on $11.2 million in affordable housing financing July 24 to WinnCompanies for the development of 22 rental homes on the East Boston waterfront. The Clippership Apartments will result from the demolition of 20 family public housing apartments that will be replaced with the 22 apartments. The apartment building will also include ground-floor retail space, community space and a bicycle storage room. The property will receive $7.6 million in LIHTC equity. WinnCompanies will also build the Clippership Condominiums adjacent to the property.

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Construction is set to begin in spring 2020 on a new affordable housing community in Hickory, N.C. Developer Woda Cooper Companies Inc. plans to build 28 one-bedroom and 22 two-bedroom apartments, which will include fully accessible homes for those with disabilities. The 50-apartment community will house seniors 55 and older who earn up to 80 percent of the area median income (AMI). There will also be homes reserved for those who earn 40 percent, 50 percent and 60 percent of the AMI. The $7 million development will be funded LIHTC equity.

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Developer Woda Cooper Companies will begin construction on Holley Pointe, a new affordable housing development in Portsmouth, Va., in early 2020. LIHTCs awarded by the Virginia Housing Development Authority will support financing of the $10.9 million property. The new 50-apartment property will house workforce families, singles and seniors who earn up to 80 percent of the AMI. 

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Caples Terrace, a low-income housing community for adults 18-24 who are aging out of foster care or who are homeless, opened Aug. 19 in Vancouver, Wash. The $8.2 million property offers 28 apartments that range from studio to two-bedroom units and residents will only pay 35 percent of their income for rent. Funding included LIHTC equity, as well as funds from Vancouver’s affordable housing fund and profits from the housing authority. 

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Beyond Shelter Inc. opened HomeField Apartments, an affordable housing community for seniors in Fargo, N.D., Aug. 22. This community is the fifth development BSI completed in the past six years. Seniors 55 and older will be able to rent the 39 apartments in the development. Wells Fargo Affordable Housing Community Development Corporation syndicated $5.8 million in LIHTC equity, while Fargo contributed $200,000 in HOME funds.

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The rehabilitation of Bedford Village affordable housing community in Bedford, Mass., was completed Aug. 8. In 2017, voters in Bedford authorized $3.8 million in Community Preservation Act funds to maintain the long-term affordability of the property and in 2018, the Preservation of Affordable Housing  purchased the property. MassHousing provided $22 million in financing for the purchase and renovation of Bedford village and federal LIHTCs helped to further finance the project. Of the 96 apartments at Bedford Village, 62 will be for households earning at or below 60 percent of the AMI, seven will be for households earning at or below 80 percent of the AMI and 27 units will provide housing for households earning at or below 100 percent of the average median income. 

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Construction of Powell Court Apartments, a low-income housing development in Powell, Wyo., will be completed in January 2020. Powell Court Apartments feature 12 affordable apartments, with funding that included $2.8 million in federal LIHTC equity helping in the $3.5 million cost.

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Cleveland Neighborhood Progress will partner with CHN Housing Partners to develop Legacy at Saint Luke’s, an affordable housing property in Cleveland. The property received $4.7 million in LIHTCs and KeyBank will provide equity as well as a construction loan. The development is expected to be completed by fall 2020 and is part of a $63 million development to revitalize the neighborhood surrounding the former St. Luke’s Medical Center. 

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Hunt Capital Partners announced the closing of $4.4 million in LIHTC and solar tax credit equity financing Aug. 29 for the acquisition and rehabilitation of McMullen Square in San Antonio. McMullen Square was built in 1969 and rehabilitated in 2003. The development cost for McMullen Square is $14.2 million, and Hunt Capital Partners Tax Credit Fund 27 has multiple equity investors. The Texas Department of Housing & Community Affairs provided $500,000 in subordinate construction and permanent financing via its Tax Credit Assistance Repayment Program, and JPMorgan Chase provided a $10 million construction loan. Cedar Rapids Bank & Trust will invest $7.6 million and TCD McMullen provided a $500,000 seller loan. Construction began in late July and is scheduled to be completed in January 2020. Upon completion, the development will provide 100 affordable homes for people earning up to 50 percent and 60 percent of the AMI.

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Hunt Capital Partners announced the closing of $12.2 million in LIHTC equity financing Aug. 8 that will help acquire and rehabilitate the Simpson Arbor Apartments in North Hollywood, Calif. The development was built in 1963 and was renovated in 2001. Simpson Arbor Apartments is fully occupied, and, once the renovations are complete, will provide 82 homes for households with incomes up to 40 percent, 45 percent and 50 percent of the AMI. The development cost is $41 million, and Citibank provided a $20 million construction loan as well as a $10.5 million permanent loan. Hunt Capital Partners facilitated investments and LIHTC equity though Hunt Capital Partners Tax Credit Fund 31, a multi-investor fund. 

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A groundbreaking ceremony was held Aug. 29 for Red Oak Flats in Nashville, Tenn., a four-story development that features 102 apartments. Some of these homes will be low-income housing for the area, and others will be mixed workforce and market rate. The development is funded by HOME funds, LIHTC equity, a market rate loan and a community investment tax loan. The property is projected to be completed in early 2021. 

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Dominium, a Minneapolis-based apartment owner, developer and manager, announced Sept. 3 the grand opening of East Range Crossings. The development in Denver will provide 252 affordable homes with 90 percent of the apartments reserved for households earning up to 60 percent of the AMI. Five percent of the homes are reserved for residents who earn up to 50 percent of the AMI, and another 5 percent are reserved for those earning up to 40 percent of the AMI. East Range Crossings was financed by a combination of tax-exempt bonds and LIHTCs issued by the Colorado Housing Finance Authority. Bank of America provided equity as well as construction financing, Barings provided permanent financing and the Denver Office of Economic Development provided a low-interest-rate loan. 

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Dominium announced the grand opening Sept. 3 of North Range Crossings. The development offers 216 affordable homes to residents in Commerce City, Colo. The financing was a combination of tax-exempt bonds and 4 percent LIHTCs allocated from the Colorado Housing Finance Authority. Alliant provided LIHTC equity, Barings-Mass Mutual provided a permanent loan, KeyBank provided a construction loan, the City of Commerce City provided rebates on impact fees and real estate tax exemption was provided by the Commerce City Housing Authority, which was also a partner in the development. 

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Steele Properties announced Aug. 21 the $8.5 million acquisition and rehabilitation of Sheridan Square in Sheridan, Wyo. The development was built in 1978 as a project-based Section 8 senior and disabled property, which consisted of a single building. The rehabilitation will be financed by equity from 4 percent LIHTCs allocated by Wyoming Community Development Authority. Tax credit equity was provided by National Equity Fund, and permanent and construction financing will be provided by Redstone Tax exempt funding. 

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MassHousing closed on financing for a new affordable housing complex in Brookline, Mass., Aug. 28. State and federal LIHTCs allocated by the Massachusetts Department of Housing and Community Development (DHCD) provided $14.7 million in equity financing. In addition, DHCD provided $3.4 million in direct support, the town of Brookline provided $3 million and $2.6 million will come from a philanthropic sponsor loan. The Harold and Ronald Brown Family House will provide 62 new mixed-income rental homes for senior citizens. The development will provide 49 apartments for households up to 60 percent AMI, eight for up to 110 percent AMI and five unrestricted units.

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WNC announced Sept. 5 that it closed two institutional LIHTC funds. The three funds, WNC Institutional Tax Credit Fund 47 LP and WNC Institutional Tax Credit Fund 10 California Series 17 LP, total $210 million in equity, and the equity from the funds will be used to develop and rehabilitate more than 25 affordable housing developments in 12 different states. The types of developments include multifamily and senior housing in urban, suburban and rural areas. A notable development is in Springfield, Mass., which will rehabilitate two historic buildings: the former Indian Motorcycle manufacturing complex that was built in 1890 and the Mason Square Fire House that was constructed in 1920. 

LIHTC People

California State Treasurer Fiona Ma named Judith Blackwell and Larry Flood executive directors of two key housing and economic development finance divisions Aug. 15. Blackwell was selected to head the California Tax Credit Allocation Committee (CTCAC) and Flood was selected to lead the California Debt Limit Allocation Committee (CDLAC). The CTCAC and the CDLAC both help finance affordable housing for low-income Californians. Both directors have extensive expertise in public finance: Blackwell started as a public finance attorney on Wall Street and Flood served as a senior policy advisor in for financial markets in the U.S Department of the Treasury for four years. 

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The Texas Department of Housing and Community Affairs (TDHCA) governing board named Bobby Wilkinson executive director, effective Aug. 15. Wilkinson served as an advisor to Gov. Greg Abbott on housing policy since 2014. TDHCA is responsible for affordable housing, community and energy assistance programs, colonia activities and regulation of the state’s manufactured housing industry.

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KeyBank Community Development Lending and Investing announced Aug. 2 that it appointed Jonathan Wittkopf as senior vice president and senior banker. Wittkopf brings 14 years of multifamily affordable housing experience to the position. He previously served as vice president and debt originator at Citi Community Capital. He will be based in Washington, D.C., where he will be responsible for KeyBank’s expansion in the Mid-Atlantic, East and Southeast territories.

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Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), announced Aug. 27 the expansion of its Affordable Housing Group. The company hired Lundat Kassa as a vice president who will be based in Washington, D.C., office. Kassa started her career in real estate financing in 2013 and spent the last six years at Love Funding, where she served in various roles and was involved in all aspects of hospital loan financing and the credit assessment of senior living and multifamily loans. Kassa is responsible for origination commercial real estate loans with a focus on senior living and multifamily facilities, and originates hospitality, industrial, retail, manufactured housing, office and self-storage loans.  Bellwether Enterprise also promoted three leaders to the executive vice president level: Victor Augusta in Raleigh, N.C., Jon Killough in Montgomery, Ala., and Jim Gillespie in New York City. Augusta, Killough and Gillespie will each manage high volumes of deals that create affordable options for thousands of families.

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Michele Huybers, multifamily programs manager for Kentucky Housing Corporation (KHC), announced her retirement, effective Aug. 15. Huybers served KHC for 25 years and played a key role with partners in the development and preservation of affordable housing.

Journal Category: 
Low-Income Housing Tax Credit
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