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

MISSOURI

BY DANA ENFINGER

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

KANSAS CITY—The Missouri Housing Development Commission (MHDC) made some small changes to its 2008 qualified allocation plan. The most notable are the changes in the percentages of set-asides for the three geographic areas in Missouri, defined as the St. Louis area, the Kansas City area, and the rest of the state.

In 2008, affordable projects located outside the St. Louis and Kansas City metros will gain at the expense of the state’s urban areas. The rest of the state will see its share of tax credits rise to 48 percent, from 44 percent in 2007. Projects located in the St. Louis and Kansas City areas will receive fewer reservations in 2008—34 percent and 18 percent, respectively. In 2007, MHDC reserved 36 percent for projects in the St. Louis metro and 20 percent for projects in the Kansas City region.

Additionally, MHDC redefined the geographic areas, excluding Lincoln and Warren counties from the St. Louis metro and Clinton and Lafayette counties from the Kansas City region. This was done in an attempt to distribute tax credit reservations across Missouri on a population proportionate basis. The commission will allocate low-income housing tax credits (LIHTCs) to a maximum of one HOPE VI proposal per geographic area.

One threshold requirement excluded for 2008 is the 15-year pro-forma operating budget.

As was the case in 2007, a workforce eligibility policy aimed at preventing illegal labor is in place for 2008. Developers and subcontractors are required to provide I-9 forms to verify employee eligibility.

In 2007, 29 projects received $11.6 million in LIHTC reservations, representing 990 tax credit units out of a total of 1,045 units. MHDC did not disclose the amount developers requested in 2007. The commission will make its 2008 reservations, for which it has already received applications, in January 2008.

The Missouri Department of Economic Development expects to issue $494 million in tax-exempt bonds in 2007, about the same amount it issued in 2007. Eleven multifamily developments consisting of 1,713 units received bond financing in 2007. The amount allocated to these projects so far is $94.9 million. Six additional developments are slated to receive bond financing, according to Janell Thome, director of rental production for MHDC.

The only big change in criteria for bond financing in 2008 is that all applications will be accepted once a year rather than anytime during the acceptance period. That deadline was Oct. 1, 2007.

2008 LIHTC PROGRAM: