TAX CREDITS & TAX-EXEMPT BONDS: STATE-BY-STATE PREVIEW

ARKANSAS

BY DANA ENFINGER

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

LITTLE ROCK—The most interesting trend on the affordable housing front in Arkansas this year was the increased interest in assisted-living developments. As a result, the Arkansas Development Finance Authority (ADFA) has increased the set-asides for these developments from $400,000 to $850,000 for 2008. Arkansas received applications totaling $1,085,899 in lowincome housing tax credits (LIHTCs) for assisted-living developments in 2007.

Another big change for the LIHTC program in Arkansas was the adoption of Universal Design as a standard for unit construction. ADFA will implement this change in 2009. Arkansas made significant changes regarding energy-efficiency point criteria this year by awarding more points to projects that feature advanced energy features, said Bruce H. Bokony, multifamily housing programs manager.

ADFA expects to have $6.5 million in federal LIHTC authority and $250,000 in state tax credits in 2008. New to ADFA’s qualified allocation plan (QAP) is the allocation of Affordable Housing Neighborhood Tax Credits (AHNTCs). The maximum amount of these credits any development can request is $250,000. The state is allotting a total of $750,000 of AHNTCs annually.

ADFA has reinstated its cure period for 2008. The authority had eliminated the cure period in 2007 to increase the efficiency of the application process. A cure period allows applicants an opportunity to correct application discrepancies cited by ADFA within five business days from the date of notification. The deadline for applications is Feb. 2, 2008, and reservations will be made May 15, 2008.

Another change in the state’s QAP is that priority will be given to developments within qualified census tracts if there is a shortage of state LIHTCs. Any remaining credits will go to those developments with the highest scores.

Also new: The authority will award five additional points to any development if the developer illustrates an increase in the number of low-income households in the area for the calendar year prior to the year of application submission.

ADFA has estimated its 2008 taxexempt bond volume cap will be $256.2 million. No multifamily developments received bond financing in 2007. ADFA expects to receive three or four applications in 2008.

2008 LIHTC PROGRAM: