Affordable Housing Finance
SPECIAL FOCUS
State-by-State LIHTC Outlook
Preparing for 2010
AFFORDABLE HOUSING FINANCE
• November/December 2009
AHF’s annual preview of states’ LIHTC programs
BY DONNA KIMURA AND CHRISTINE SERLIN Developers will find tougher underwriting standards as well as a greater emphasis
on project readiness when states reserve their low-income housing tax
credits (LIHTCs) next year.
Several housing finance agencies are making these changes in their
LIHTC programs in response to the tough economic conditions, according
to a survey by AFFORDABLE HOUSING FINANCE. The study looked at changes to 2010 qualified
allocation plans (QAPs) from across the country.
For example, the Wisconsin Housing and Economic Development Authority is
looking at awarding points to developments with a debt-service coverage ratio between
1.20x and 1.30x to reward developments that are better able to match investor expectations
in this market.
The readiness of projects to proceed is another big issue. The Pennsylvania
Housing Finance Agency has added a developer’s ability to proceed as a selection
criteria in its 2010 draft QAP. The Alabama Housing Finance Authority plans to add to its
QAP that prior-funded projects must have building foundation slabs in place in order to
apply for more LIHTCs.
Readiness is also critical for many projects seeking Tax Credit Assistance Program
(TCAP) and tax credit exchange funds. Delaware, Hawaii, New Mexico, Pennsylvania, and
Texas are just a few of the states that cited readiness as a factor for receiving these funds.
Project feasibility is also being addressed in other ways. A few states are encouraging
more units at the mid-range of incomes instead of the very lowest. For example, the
Idaho Housing and Finance Association has been considering the possibility of eliminating
points for 30 percent and 35 percent of the area median income (AMI), and Utah
Housing Corp. officials have changed their rent targeting to encourage more units in the
40 percent and 45 percent AMI range, with some units higher and some lower.
View 2010 State-by-State LIHTC and Bond Guide in a larger map
CLICK ON A STATE'S NAME BELOW TO JUMP TO ITS PREVIEW
ALABAMA
2010 LIHTC authority (est.):
$10 million
Application deadlines: TBD
One of the biggest changes
expected in Alabama Housing
Finance Authority’s 2010 QAP,
which will be final in December,
is prior-funded projects must
have building foundation slabs
in place in order to apply for
LIHTCs. The other major change
is that points will no longer be
awarded for additional subsidies.
ALASKA
2010 LIHTC authority (est.):
$2.8 million
Application deadline:
Dec. 4, 2009
All rating and award criteria
are now objective with no
review panels, according to
officials at the Alaska Housing
Finance Corp., who have
made several key changes to
the LIHTC program in 2010.
The application process is also
now entirely online.
ARIZONA
2010 LIHTC authority
(est.): $15 million
Application deadline:
Feb. 26, 2010 (tentative)
Developers will likely
be required to attend an
application workshop
next year. That was one
of the moves being considered
by the Arizona
Department of Housing
as officials prepared
a 2010 QAP. In 2009,
17 projects received
reservations for $16.7
million in LIHTCs.
ARKANSAS
2010 LIHTC authority
(est.): $6.3 million
Application deadline:
Feb. 5. 2010
The assisted-living setaside
will increase to $1.25
million, and the public
housing agency set-aside
will grow to $600,000 in
Arkansas next year. The
Arkansas Development
Finance Authority (ADFA)
is also calling on developments
to have a minimum
debt-service coverage ratio
(DSCR) that is the greater of
1.10x or the minimum DSCR
required by a lender or investor.
The agency is also requiring
developments to meet
the greater of ADFA-required
operating and replacement
reserves or those of their
lenders or investors.
CALIFORNIA 2010 LIHTC authority (est.): $77.2 million
Application deadlines: March 25, 2010, and
July 6, 2010 (tentative)
Although a new QAP isn’t expected until early next year, officials at the California Tax Credit Allocation
Committee (CTCAC) say there may be revisions to two competitive tiebreakers. Some changes involving
site amenities and a more robust service amenity requirement are also being considered. In addition,
CTCAC is considering limiting the number of applications a sponsor can submit each round.
The California Debt Limit Allocation Committee estimates a statewide private-activity tax-exempt
bond cap of $3.3 billion next year. Historically, about 80 percent of the state ceiling has gone to multifamily
and single-family housing. Of that set-aside, about two-thirds has typically been for multifamily.
COLORADO
2010 LIHTC authority (est.):
$11.4 million
Application deadlines: March and
August 2010
Developers will likely see a new minimum
threshold requirement that calls
on them to meet nationally recognized
green building standards in 2010.
Although next year’s QAP was still being
developed at press time, Colorado
Housing and Finance Authority officials
cited the green standards as one of the
expected changes.
CONNECTICUT
2010 LIHTC authority
(est.): $7.3 million
Application deadline:
April 2010
In addition to its federal
LIHTCs, Connecticut
Housing Finance
Authority projects that it
will have $10 million in
state tax credits in 2010.
DELAWARE 2010 LIHTC authority (est.): $2.7 million
Application deadline: March 26, 2010
Delaware State Housing Authority’s
2010 QAP, which will be final Dec. 31, is
expected to include a new set-aside for
the creation of new housing, a new point
category for an increase in Americans
with Disabilities Act units, new general
contractor bidding requirements, and an
increase in developer fee limits.
DISTRICT OF
COLUMBIA
2010 LIHTC authority (est.): $2.8 million
Application deadlines: TBD
The District of Columbia Department of Housing and Community
Development had expected to award its $11.7 million in TCAP funds by the end
of October. The department had yet to determine how much it would have in exchange
funds, but hoped to make awards before Dec. 31 based on how difficult
it is to obtain investment equity at a level in order to develop feasible projects.
FLORIDA
2010 LIHTC authority (est.):
$38.5 million
Application deadlines: TBD
Florida Housing Finance Corp.
received $101.1 million in TCAP funds,
which it plans to award between Dec.
5 and Jan. 31. Florida Housing also
has received $580 million in exchange
funds. It expects to award $355 million
by Jan. 31 and the remaining $225
million by April 30.
GEORGIA
2010 LIHTC authority (est.):
$19 million
Application deadline:
May 2010
Georgia Department of
Community Affairs projects
that it will have $19 million in
state tax credits in 2010. The
state also has $54 million in
TCAP funds and plans to award
75 percent of those funds by
January and the remaining 25
percent by December 2010.
HAWAII
2010 LIHTC authority (est.): $3 million
Application deadline: January 2010
Developers in Hawaii should be very familiar with
the state’s LIHTC program next year as no changes
are in store for 2010, according to officials with the
Hawaii Housing Finance and Development Corp.
IDAHO
2010 LIHTC authority (est.): $3.2 million
Application deadline: Feb. 12, 2010
Idaho Housing and Finance Association officials are considering
eliminating points for 30 percent and 35 percent area median
income units next year. The change was not final at press time.
ILLINOIS
2010 LIHTC authority
(est.): $36 million
Application deadline:
Around May 2010
The Illinois Housing
Development Authority was
considering several signifi
cant changes for 2010,
including implementing a
mandatory preliminary application
process and changing
its program set-asides to be
based on geographic location.
A final QAP is expected
in December.
INDIANA
2010 LIHTC authority (est.): $36 million
Application deadline: Dec. 18, 2009
Demand for 2009 LIHTC authority was almost twice as much
what the Indiana Housing and Community Development Authority
had on hand. The authority reserved $24.6 million for 37 projects
with 2,563 LIHTC units. Officials say they don’t anticipate any
modifications to its 2009-2010 QAP next year.
IOWA
2010 LIHTC authority (est.): $27.8 million
Application deadline: March 15, 2010
The Iowa Finance Authority (IFA) is looking at
establishing a 25 percent set-aside for properties
meeting the requirements to be awarded state
HOME funds next year.
IFA is considering setting a per project cap of
$2 million and a cap of $5 million in credits for
a single developer. Officials also plan to update
its underwriting standards, including revising the
allowed debt-service coverage ratio to be between
1.20x and 1.50x. Projects will also be underwritten
assuming no less than an 8 percent vacancy rate.
Iowa will have about $6.9 million in annual authority
and $20.9 million in 2010 disaster credits.
KANSAS
2010 LIHTC authority (est.):
$6.4 million
Application deadlines:
Feb. 5, 2010,
and Aug. 6, 2010
The Kansas Housing
Resources Corp. is considering
the possibility of awarding
points to owners who are
willing to waive the qualified
contract provisions that allow
them to opt out of the tax
credit program after 15 years.
KENTUCKY
2010 LIHTC authority (est.):
$9 million
Application deadline:
Open-window process
Instead of competitive rounds,
Kentucky Housing Corp. is moving
to an open-window process
in 2010 so that projects that
have financing in place can apply
for LIHTCs when the project is
truly ready to move forward.
LOUISIANA
2010 LIHTC authority (est.): $9.3 million
Application deadlines: TBD
The Louisiana Housing Finance Agency was set
to receive about $39.4 million in TCAP funds and
$114 million in tax credit exchange funds.
MAINE
2010 LIHTC authority (est.):
$3 million
Application deadlines: TBD
MaineHousing has traditionally
had an LIHTC application deadline
in the fall for the next year’s tax
credits. However, because of the
current equity pricing and for
the market to have a chance to
rebound, the agency is postponing
the deadline until sometime in the
spring. At press time, the agency
was working on its draft QAP.
MARYLAND
2010 LIHTC authority (est.): $12 million
Application deadline: March 2010
According to Maryland Department of Housing and
Community Development officials, its 2010 credits have
already been reserved for projects in the development
pipeline. The 2010 QAP also is expected to be revised
and released toward the middle of next year.
MASSACHUSETTS
2010 LIHTC authority (est.): $14.9 million
Application deadlines: February and September 2010 (tentative)
Massachusetts Department of Housing and Community Development
projects that it will have $10 million in state tax credits in 2010.
MICHIGAN
2010 LIHTC authority (est.): $21 million
Application deadlines: Nov. 2, 2009, and March 1, 2010
Michigan received approximately $63.8 million in TCAP funds, with approximately
$21.5 million reserved by the end of October. Michigan State
Housing Development Authority says it expects nearly all TCAP funding
to be reserved for projects by mid-February. It also plans to award approximately
$350 million in exchange funds, with nearly all of the funding
expected to be awarded by the end of the first quarter of 2010.
MINNESOTA
2010 LIHTC authority (est.):
$11 million
Application deadline: Oct. 1, 2009
Additional points are being
awarded for rehab projects with
existing project-based rental assistance.
Priority is also being given to
previously awarded tax credit developments
that are ready to proceed
to closing and project construction,
and there is an accelerated selection
process for developments that are
ready to proceed, according to the
Minnesota Housing Finance Agency,
which forward-funds its credits.
MISSISSIPPI
2010 LIHTC authority (est.):
$6.8 million
Application deadline: April 9, 2010
Mississippi Home Corp. plans to set
the minimum score for all developments
at 85 from 92 for new construction
and 80 for rehabs, separate
its Community Services and Amenities
scoring component into three scoring
categories, and add requirements
for its community services category,
according to its 2010 draft QAP.
MISSOURI
2010 LIHTC authority (est.): $13 million
Application deadline: Nov. 6, 2009
The Missouri Housing Development
Commission has revised the developer fee
maximum, established difficult development
areas, and defined the green building programs
that can be used under its sustainable housing
priority category.
Missouri also will have about $13 million in
state credits in 2010.
MONTANA
2010 LIHTC authority (est.):
$2.9 million
Application deadlines: Jan. 15,
2010, and May 7, 2010
In addition to the federally
required 10 percent set-aside for
projects sponsored by nonprofits,
Montana provides a 20 percent
set-aside for small developments of
$200,000 or less in credits and a
20 percent set-aside for preservation
projects. In the scoring competition,
developers may lose points
for past management weaknesses,
threshold application omissions, or
lack of responsiveness, according to
the Montana Board of Housing.
NEBRASKA
2010 LIHTC authority (est.):
$13.1 million
Application deadlines:
Round one: Dec. 18, 2009
(threshold) and Jan. 29, 2010
(final); Round two: March 19,
2010 (threshold) and April
23, 2010 (final)
The Nebraska Investment
Finance Authority will have
about $4.1 million in annual
LIHTCs and about $9 million
in Midwestern disaster area
credits in 2010.
NEVADA
2010 LIHTC authority (est.): $6 million
Application deadline: May 1, 2010
Acquisition and rehab projects with extended Sec. 8/
Housing Assistance Payment contracts may receive
additional preference points next year. That was one of
the moves under consideration by the Nevada Housing
Division. A draft QAP was available this fall, but a final
plan was not expected until mid-December.
NEW HAMPSHIRE
2010 LIHTC authority (est.):
$2.8 million
Application deadline:
March 5, 2010
New Hampshire Housing
Finance Authority will go to one
round of LIHTC reservations in
2010 to get the resources out the
door more quickly. The authority
also is boosting its maximum
allocation to $800,000 from
$600,000 due to resources not
going as far as they used to.
NEW JERSEY
2010 LIHTC authority (est.): $18 million
Application deadlines: February and April 2010
New Jersey Housing & Mortgage Finance Agency
(HMFA) reserved $39.1 million, including forward commitments,
in 2009 authority for 24 projects with 1,552 LIHTC
units; however, more than $67 million had been requested
by developers. For 2010, HMFA doesn’t expect significant
changes to its QAP, which will be final in May, and will
utilize the 2009 QAP for its February application cycle.
NEW MEXICO
2010 LIHTC authority (est.): $4.2 million
Application deadline: Feb. 1, 2010
In addition to the federally required 10 percent set-aside for projects sponsored by nonprofi
ts, New Mexico Mortgage Finance Authority reserves 10 percent of its authority to
projects with U.S. Department of Agriculture Rural Development funding. The 2010 QAP
does not have any major changes. However, it was revised to reflect program changes to
the treatment of federal grants and the 10-year rule that were made by recent legislation.
NEW YORK
2010 LIHTC authority (est.): $42
million ($17 million suballocated
to the New York City Department
of Housing Preservation and
Development)
Application deadline:
Feb. 10, 2010
The New York State Division of
Housing and Community Renewal
plans to add a scoring provision for
historic building rehabs, include
energy-efficiency standards as part of
threshold requirements, and clarify
green building and energy-efficiency
standards in threshold eligibility and
scoring provisions in its 2010 QAP,
which will be final in January.
NORTH CAROLINA
2010 LIHTC authority (est.):
$20 million
Application deadline: Jan. 15, 2010
Because the continued viability
of some developers depends on
receiving an allocation periodically,
North Carolina Housing Finance
Agency’s draft 2010 QAP, which
will be final in December, is
expected to reduce the amount of
9 percent LIHTC awards per principal
by making the $1.5 million
maximum a “hard cap.” This means
there would be no ability to receive
more than $1.5 million to complete
a last award; the alternative maximum
is three awards.
NORTH DAKOTA
2010 LIHTC authority
(est.): $2.5 million
Application deadline:
Feb. 26, 2010
In 2009, the North
Dakota Housing Finance
Agency reserved about
$3.2 million to seven
developments with about
314 LIHTC units. Demand
was more than twice the
available supply, with
developers seeking $6.8
million in credits. Officials
said no major changes are
expected to the 2010 QAP.
OHIO
2010 LIHTC authority (est.): $24 million
Application deadlines: Interested applicants
must have submitted an Experience
and Capacity Review application by Nov.
5, 2009, with housing proposals due
March 18, 2010
The Ohio Housing Finance Agency
plans to allocate $16 million of its authority
in 2010. New for next year, the competitive
evaluation of housing proposals
will be based primarily on the overall
achievement of the policy statements
outlined in the QAP, with design, site,
market and development team to continue
to be part of that evaluation. Also,
universal design of housing units will be
based on several design principles, rather
than the prescriptive method used in
prior years.
OKLAHOMA
2010 LIHTC authority
(est.): $8 million
Application deadline:
May 21, 2010
The Oklahoma Housing
Finance Agency is planning
to hold only one
allocation round in 2010.
It previously held two.
OREGON
2010 LIHTC authority (est.):
$8 million
Application deadline: March 2010
No major program changes are
expected. Oregon Housing and
Community Services issues its QAP
for two-year periods, so the amended
2009 plan will remain in effect.
PENNSYLVANIA
2010 LIHTC authority
(est.): $28.6 million
Application deadline:
Feb. 26, 2010
A developer’s ability
to proceed on an LIHTC
project has been added
as selection criteria to
Pennsylvania Housing
Finance Agency’s 2010
draft QAP, which is expected
to be final Dec. 10.
RHODE ISLAND
2010 LIHTC authority (est.):
$2.7 million
Application deadline:
Oct. 2, 2009
Rhode Island Housing and
Mortgage Finance Corp. will
prioritize strategies to redevelop
foreclosed or abandoned
properties due to the shortage
of decent and safe rental units,
according to its 2010 QAP.
SOUTH CAROLINA
2010 LIHTC authority (est.):
$8.5 million
Application deadlines: Tier I
applications due Feb. 26, 2010;
Tier II applications due June 7-11,
2010 (tentative)
South Carolina Housing Finance
& Development Authority plans to
add point preferences to developers
who have closed permanent loans
on previously funded developments,
eliminate the historic set-aside and
use historic character as a tiebreaker
criteria, and change the rehab setaside
from a percentage of credits
to a dollar amount available ($1.275
million) in its 2010 QAP.
SOUTH DAKOTA
2010 LIHTC authority
(est.): $2.5 million
Application deadline:
Feb. 26, 2010
The South Dakota
Housing Development
Authority will be in the
second year of a two-year
allocation plan in 2010, so
no changes are in store. The
maximum LIHTC award is
$494,000 per project and
$617,500 per developer.
TENNESSEE
2010 LIHTC authority (est.): $14 million
Application deadline: March 19, 2010 (tentative)
Demand was high in Tennessee in 2009 for LIHTCs.
The Tennessee Housing Development Agency reserved
approximately $6 million in LIHTC authority for 11
projects with roughly 600 units, while approximately $50
million had been requested. The agency also is still in the
process of awarding its exchange funds.
TEXAS
2010 LIHTC authority (est.): $66 million
Application deadlines: Jan. 8, 2010 (pre-application) and March 1,
2010 (application)
A number of potential changes were on the table as Texas
Department of Housing and Community Affairs officials prepared
their 2010 QAP.
The proposals were in the areas of administrative and material
deficiencies, experience certification, “intent to apply” for funding
documents, and quantifiable community participation. Texas has
also been discussing a way to prorate the credit amount when an
inexperienced developer teams with an experienced developer.
This is because the state has a cap on how much a developer can
receive in a round. A final QAP is expected in December.
UTAH
2010 LIHTC authority
(est.): $5.5 million
Application deadline:
Feb. 1, 2010
There is a new emphasis
on projects serving
residents with mid-range
incomes of around 45
percent of the area median
income in 2010, according
to the Utah Housing Corp.
VERMONT
2010 LIHTC authority
(est.): $2.4 million
Application deadline:
Rolling allocation process
In addition to its federal
LIHTCs, Vermont Housing
Finance Agency projects
that it will have $400,000
for multifamily and
$100,000 for homeownership
in state tax credits.
VIRGINIA
2010 LIHTC authority (est.): $16.3 million
Application deadline: March 12, 2010
The Virginia Housing Development Authority has
already reserved more than half of its 2010 credits in
2009, so it will only have approximately $9.5 million
in authority available. The 2010 QAP, which will
be final Dec. 2, is expected to have two new point
categories to encourage geothermal heat pumps and
solar electric systems.
WASHINGTON
2010 LIHTC authority (est.): $14.4 million
Application deadline: January 2010
A HOPE VI set-aside will be extended for three years,
beginning in 2010, under a proposal being considered by
the Washington State Housing Finance Commission.
WEST VIRGINIA
2010 LIHTC authority (est.): $3.9 million
Application deadlines: TBD
At press time, no details were available on
West Virginia Housing Development Fund’s
plans for 2010 or a recap of 2009.
WISCONSIN
2010 LIHTC authority (est.): $43.6 million
Application deadline: Feb. 5, 2010
Wisconsin will have about $12.9 million in annual LIHTCs and $30.6 million in disaster
credits in 2010. Developments with a debt-service coverage ratio between 1.20x and 1.30x
are eligible for additional points under the 2010 LIHTC program in Wisconsin.
This move is to reward developments that are able to better match investor expectations in
the market, according to the Wisconsin Housing and Economic Development Authority.
WYOMING
2010 LIHTC authority (est.): $2.4 million
Application deadlines: TBD
Applicants in Wyoming have been ranked on primary
and secondary criteria. Under the primary criteria,
projects must score a minimum of 170 points out of
a possible 504 points. Projects must score at least 55
points out of 271 points under the secondary criteria.
PUERTO RICO
2010 LIHTC authority (est.): $9.1 million
Application deadlines: TBD
Demand outstripped supply in Puerto Rico, with more than
$50 million in 2009 LIHTC authority requested. As of Oct. 1, the
Puerto Rico Housing Finance Authority had reserved $5.5 million
of its 2009 credits for six projects with 937 units.
|
