LIHTC Awards Made

AFFORDABLE HOUSING FINANCE • October 2008

Agencies look at dishing out new credits

BY Donna Kimura

Around the West

The 42-unit Gateway Apartments recently opened its doors in the Barrio Logan Redevelopment Project Area of San Diego. Developed by MCA Housing Partners, LLC (formerly Simpson Housing Solutions), and Las Palmas Foundation, the $21 million project provides some of the first workforce housing to be built in the neighborhood in years. The city Redevelopment Agency provided $3.6 million in financing. The project also received more than $11 million in federal and state low-income housing tax credits.

Vineyard Suites at Indian Creek, a 50-unit development for seniors, hasopened in Caldwell, Idaho. It is the first project completed by New Beginnings Housing, LLC, said owner Greg Urrutia, who started the company after working for other affordable housing developers. Wachovia provided about $6.5 million in equity from low-income housing tax credits. The Idaho Housing and Finance Association allocated the credits and provided financing, and the Caldwell East Urban Renewal Agency provided a $30,000 grant.

The new 70-unit Villa Vasconcellos Apartments in Walnut Creek, Calif., is the greenest project built so far by Resources for Community Development. The common areas are powered by solar panels, which also heat water for the building. The $21 million project features 70 units for seniors with incomes between 20 percent and 50 percent of the area median income. A quarter of the city’s population is older than 65. Financing included $8.2 million in low-income housing tax credit equity from Union Bank of California.

Columbia Non-Profit Housing opened Highland Park Apartments in Vancouver, Wash. The 56-unit development serves seniors who earn no more than 50 percent of the area median income. The $6.9 million development was financed with $5.7 million provided through the Department of Housing and Urban Development’s Sec. 202 capital advance program; $812,000 from the Washington Housing Trust Fund; and $380,000 from Clark County for site acquisition.

State housing finance agencies across the West have been busy reserving their 2008 low-income housing tax credits (LIHTCs), and they are in line to receive even more credits following the recent passage of the Housing and Economic Recovery Act of 2008.

States will receive a 20-cent boost in their LIHTC volume caps this year and next, bringing them to $2.20 per capita, under legislation signed by President Bush on July 30.

For California, that 10 percent bump is going to mean an additional $7.3 million in LIHTCs this year, according to the California Tax Credit Allocation Committee (CTCAC). In comparison, the Montana Board of Housing will receive about $232,500 in new tax credits through the housing bill.

At press time, CTCAC officials were planning to make the additional credits available to pending second-round LIHTC applicants "by cascading the additional credits through the various set-asides and geographic apportionments."

In the first round, affordable housing developers in California received federal LIHTC reservations totaling more than $38 million to build more than 30 developments.

Representatives from several other states said they are still working out plans to award the additional credits from the housing bill. A few noted the possibility of supplementing previously awarded developments that face budget gaps because of a drop in tax credit prices.

In addition to increasing the amount of LIHTCs available this year, the housing bill also boosts the amount of tax-exempt bond cap by $11 billion nationwide.

Oregon Housing and Community Services (OHCS) estimated that its authority to issue bonds to finance housing has been increased by about $123 million. "This alone will put a huge number of much-needed housing dollars into play," said OHCS Director Victor Merced in a written statement. "You can build a lot of apartments and homes and help preserve many housing units with that kind of money."

On the LIHTC front, OHCS has reserved about $7.6 million in tax credits to 16 projects this year.

In Arizona, 16 proposed developments recently received more than $13 million in federal tax credit reservations from the Arizona Department of Housing. The credits will finance the development or rehabilitation of 887 units in 11 counties.

More than half of the funded projects will benefit families. While nine projects aim to serve families, six projects are designated for seniors. The remaining development will serve special- needs households.

In conjunction with the recent housing bill, Arizona housing officials in August announced substantial changes to the state's qualified allocation plan (QAP). Projects reserved LIHTCs in the 2007 and 2008 allocation rounds that have not been placed in service as of June 30, 2008, may apply for additional reservations of credits by 4 p.m. Sept. 15.

Applications that did not qualify for a reservation of credits in the 2008 annual allocation round because they failed to meet threshold, eligibility, or underwriting requirements may be corrected and resubmitted to compete for unallocated 2008 tax credits and for a reservation of a forward commitment from the 2009 tax credit ceiling. Applicants for the 2008 QAP re-submittal allocation round must apply no later than 4 p.m. Oct. 1.

In Nevada, about $5.7 million in tax credits were reserved for 12 developments, including three previously funded projects that are receiving additional credits.

Seniors housing dominated the Nevada reservations. Eight of the projects receiving awards are seniors housing deals and another is an assisted-living project. The remaining three projects will house families.

In Colorado, 19 developments have applied for LIHTCs during the third and final allocation round of 2008. The cumulative tax credit allocation request was $16.2 million, with the average request at $854,852, according to the Colorado Housing and Finance Authority (CHFA). The requests exceed the available tax credits by a ratio of 5 to 1.

CHFA reserved more than $6.3 million in LIHTCs to 10 developments in the first two rounds.

The New Mexico Mortgage Finance Authority has approved about $5 million in reservations to six developments this year. The reservations included one forward allocation of 2009 credits. Several of this year's deals are urban projects, with three developments in Albuquerque and one each in Santa Fe, Las Cruces, and Anthony. In the recent past, the authority has seen a few more rural deals receive funding.

In Idaho, about $3.5 million in tax credits were reserved for 13 developments, including three previously awarded projects that are receiving additional credits this year, reported the Idaho Housing and Finance Association.

In Montana, seven developments will share in $2.3 million in 2008 tax credits reserved this year by the state Board of Housing.

The Wyoming Community Development Authority reserved about $2.8 million in LIHTCs to six developments this year.