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

OREGON

BY DONNA KIMURA

AFFORDABLE HOUSING FINANCE • DECEMBER 2007

SALEM—Affordable housing developers will compete for about $7.3 million in low-income housing tax credits (LIHTCs) in Oregon in 2008.

Developers should be very familiar with the tax credit program because officials at Oregon Housing and Community Services (OHCS) are not making any big changes to the qualified allocation plan for next year.

The first-round application deadline is Feb. 18, 2008, with reservations being made May 2, 2008. A second-round deadline is scheduled for July 25, 2008, with reservations scheduled to be made Nov. 7, 2008.

The maximum LIHTC award is $700,000. Oregon also has a state housing tax credit.

For 2008 tax credits, there will be a set-aside for housing for the homeless to supplement the state’s Housing Plus resources available for this period.

Competition for LIHTCs has been stiff in Oregon, with demand outpacing supply by about 2 to 1. In 2007, a little more than $14 million in tax credits was requested, and nearly $7.3 million was reserved to 18 projects. About $5.6 million went toward new construction, and $1.7 million was for acquisition-rehabilitation deals.

Nonprofit developers received 67 percent of the reservations; for-profit developers, 16 percent; joint ventures, 9 percent; and public housing authorities, 8 percent.

One of the interesting trends that OHCS is seeing is portfolios of projects using tax-exempt bonds and 4 percent tax credits to preserve Sec. 8 and Rural Development (RD) projects with rental assistance. RD is part of the U.S. Department of Agriculture.

OHCS leaders expect that projects with expiring Sec. 8 contracts will continue to make up a large portion of the multifamily bond financing activity, said Robert Larson, debt manager for OHCS.

The statewide tax-exempt privateactivity bond cap will be about $325 million in 2008. Roughly $120 million in privateactivity bond (PAB) authority allocated to OHCS for all programs will likely be first made available to multifamily housing. The department also expects to have about $181 million of PAB authority from prior years available for multifamily housing.

There are no formal deadlines for multifamily bond applications. Applications would likely need to be submitted before July 15, 2008, to be issued by the end of the year.

In 2007, OHCS reported that 25 multifamily projects had received bond financing, and two more were expected to receive financing by the end of the year.

2008 LIHTC PROGRAM: