housingfinance

House Passes Key Housing Legislation

2008-05-09T09:19:00.000-07:00

The U.S. House of Representatives passed the American Housing Rescue and Foreclosure Prevention Act (H.R. 3221) on Thursday.

The legislation combines a number of bills, including measures to modernize the Federal Housing Administration and reform the government-sponsored enterprises.

The bill also provides for a temporary 20 cents increase in the low-income housing tax credit ceiling as well as a temporary increase in the mortgage revenue bond authority to allow for the issuance of an additional $10 billion in tax-exempt bonds.

Bush Nominates HUD Secretary

2008-04-18T10:28:00.001-07:00

President Bush today nominated Steve Preston, head of the Small Business Administration (SBA), to be the next secretary of the Department of Housing and Urban Development (HUD).

During his tenure at the SBA, Preston has managed loan guarantee programs that are similar in structure to those run by the Federal Housing Administration, said Bush in his announcement.

Preston’s nomination follows Alphonso Jackson resignation from HUD’s top post. The last day of Jackson’s troubled tenure was April 18. He left office amid allegations of political favoritism and investigations about whether he steered lucrative housing contracts to friends.

The choice of Preston comes as a surprise to those who had speculated that the nominee would come from within HUD. Preston has been head of the SBA since July 2006. He is credited with streamlining the agency’s work in providing loans to small businesses and homeowners devastated by Hurricane Katrina.

New Orleans Rehab At Risk?

2008-04-11T10:59:00.000-07:00

The New Orleans Times-Picayune reports that the redevelopment of four public housing complexes in the city is at risk because of the decline in prices for low-income housing tax credits.

Word on the street is that prices are in the low 80-cent-range per dollar of credit, a big decline from this time last year, when investors were paying about 95 cents on the dollar.

City officials told the Times-Pic the developers have enough contingencies built into their financing plans to complete the projects. And two of the developers said declines in other costs will offset the loss of capital from declining tax credit prices.

Meanwhile, market-rate development in the Big Easy is moving forward at decent clip, says New Orleans-based apartment broker Larry Schedler, who spoke at our Apartment Finance Today conference earlier this week.

Who's Next at HUD?

2008-04-11T10:17:00.000-07:00

Who's next at HUD?

Washington insiders say the latest speculation is that the Bush
Administration's third and presumable last housing secretary might be James
B. Lockhart III, who is now director of the Office of Federal Housing Enterprise Oversight.

He would replace Alphonso Jackson, who leaves office April 18. He resigned
to focus on personal matters, according to his statement. He is under
investigation for steering lucrative federal contracts to his friends and
political allies.

The other leading candidate for the top job is Brian Montgomery, who is now
assistant secretary for housing. Several housing industry leaders, including
mortgage bankers, are hoping he will move up to the top job and that his
current deputy, John Garvin, can move up to be assistant secretary for
housing and commissioner of the Federal Housing Administration (FHA).

Garvin is widely viewed as a very competent administrator who has tried to
move FHA programs forward despite many obstacles.

Rangel Introduces Key Housing Bill

2008-04-08T14:28:00.000-07:00

A much-anticipated housing bill was introduced today by House Committee on Ways and Means Chairman Charles Rangel (D-N.Y.).

The Housing Assistance Tax Act of 2008 would provide:

* A first-time homebuyer tax credit to assist in making a down payment on a home. This would provide individuals and families with a refundable credit (equivalent to an interest-free loan) of ten percent of the purchase price of their home (up to $7,500). Taxpayers would be required to repay any amount received under this provision to the government over 15 years in equal installments. The credit will be phased out for taxpayers with adjusted gross income in excess of $70,000 ($110,000 in the case of a joint return).

* An additional standard deduction for real property taxes to help homeowners who claim the standard deduction by allowing them to claim and additional standard deduction of up to $350 ($700 for joint filers) for State and local real property taxes. This provision applies for 2008.

* A temporary increase in low-income housing tax credit and simplification of the credit. The bill would increase the current limit of the credit from $2 for each person residing in a state by an additional 20 cents per resident. This will help put builders to work to create new options for families seeking affordable housing alternatives. The credit will also be simplified to improve its effectiveness.

* A temporary increase in mortgage revenue bonds to allow for the issuance of an additional $10 billion of tax-exempt bonds to refinance subprime loans, provide loans to first-time homebuyers and to finance the construction of low-income rental housing.

HUD Secretary Jackson Resigns

2008-03-31T11:30:00.000-07:00

Alphonso Jackson resigned as the nation’s top housing official today amid ethics investigations and calls for him to step down as secretary of the Department of Housing and Urban Development (HUD).

Jackson’s resignation is effective April 18. He said it was time for him to attend to personal and family matters. Sources in Washington said the timing of his resignation may indicate that the U.S. Department of Justice is nearing completion of an investigation into HUD contracting and the truthfulness of Jackson's testimony regarding those contracts.

Sen. Chris Dodd (D-Conn.) and Sen. Patty Murray (D-Wash.) called for Jackson to step down a little more than a week ago, saying that he is not fit to run HUD. The move followed hearings in which Jackson did not adequately respond to Congressional inquiries, said the senators.

Federal authorities are investigating whether Jackson, who has been secretary since 2004, steered lucrative housing contracts to friends. AFFORDABLE HOUSING FINANCE has reported extensively about HUD contracting, and its investigative report “Is HUD Contracting Out of Control?” was recently honored by American Business Media with a Neal Award, the nation’s most prestigious honor for business-to-business journalism. The report ran in the June and July 2007 issues.

Jackson is also being questioned about his role in trying to punish the Philadelphia Housing Authority for refusing to sell a piece of land to an individual designated by HUD who is reportedly a friend of Jackson’s.

"Ten days ago, I called on Secretary Jackson to resign because it was clear that the ethical allegations against him meant that the Bush administration's ineffective housing policies were being burdened by an even more ineffective HUD secretary,” said Murray in a written statement “Today, Secretary Jackson has decided to move on, but the immense challenges ahead of us to calm the housing crisis remain.”

Murray called on President Bush to nominate a new HUD secretary that has “the experience and credibility to attach this [housing] crisis rather than hide from it.” “Hopefully, with new leadership at HUD, we can negotiate a bipartisan plan with the Bush administration to spare the maximum number of families the devastating consequences of losing their home,” she said.
Murray added that she hoped that the resignation was “more than a move to simply save face.” “I hope this signals an end to the neglect of needy tenants and struggling homeowners and the beginning of an administration policy that responds meaningfully to the needs of both.”

President Bush said he accepted Jackson’s resignation with regret. “While leading the Department of Housing and Urban Development, Alphonso made significant progress in transforming public housing, revitalizing and modernizing the Federal Housing Administration, increasing affordable housing, rebuilding the Gulf Coast, decreasing homelessness, and increasing minority homeownership,” said Bush.

He did not name any possible successors. Early speculation within HUD is that a new secretary will come from an internal promotion, possibly either Deputy Secretary Roy Bernardi or Assistant Secretary for Housing Brian Montgomery. HUD staff told Affordable Housing Finance that Bernardi is widely considered to be a capable administrator who has high standards of integrity. Bernardi, who came to HUD in 2004, was previously the mayor of Syracuse, N.Y. Montgomery has the advantage of being a Texan who worked in the White House before coming to HUD in 2005 and was personally acquainted with President Bush, but he has the disadvantage of being at the helm of the Office of Housing, where several of his subordinates are alleged to have engaged in questionable activities regarding contracting and handling of expense accounts.

Congress Gets in Gear on HUD, Tax Credits

2008-03-24T07:58:00.001-07:00

After a very long silence, leaders in the Senate on housing issues are finally speaking out about corruption in the Department of Housing and Urban Development (HUD), calling for the resignation of Secretary Alphonso Jackson.

Meanwhile, after years of inertia, Congress is moving bills that would make the low-income housing tax credit program more flexible and help attract more investment.

Sen. Patty Murray (D-Wash.) and Sen. Chris Dodd (D-Conn.) wrote to President Bush on March 21 asking him to request Secretary Jackson’s resignation. Murray chairs the HUD appropriations subcommittee and Dodd chairs the Senate Banking Committee.

In their letter, they said “The nation is in the midst of a housing crisis and it is imperative that the department be headed by a leader who can work tirelessly to find solutions to the problems plaguing the housing and mortgage markets.”

“During this critical period, the American people do not need a HUD secretary that is distracted by the clouds of Justice Department investigations and reports of an empanelled grand jury,” they went on.

Jackson may have incurred the wrath of Dodd and Murray by refusing to answer questions about his involvement in contracting decisions and his role in trying to punish the Philadelphia Housing Authority for refusing to sell a piece of land to an individual designated by HUD who is reportedly a friend of Jackson’s.

Meanwhile, Congress appears to be moving faster than usual on legislation to improve the tax credit program, giving industry leaders hope that even the Senate might actually pass a useful bill in this election year.

Some of the proposed changes have been on the table for years, but some are new and there is new urgency due to the current slowdown in corporate investment in tax credits. One very useful change would allow projects to get credits for up to 130 percent of basis where a high level of need is demonstrated. Another would allow the credits to be applied toward corporate and individual alternative minimum tax liability. The House Ways and Means Committee has been working on a bill for some time, including many “modernization” measures sought by the industry. The Senate bill is S. 2666, and it was introduced in February.

LIHTC Hits the News

2008-03-24T07:56:00.001-07:00

The falling price of low-income housing tax credits and its effect on housing projects recently got some unexpected news coverage. The Wall Street Journal published a rather sympathetic story, “Losses Stall Affordable Housing Projects.”
Take a look at the March 12 issue for the article, which quotes Matt Greer of Carlisle Development Group in Miami, Fred Copeman of Ernst & Young, and others.

Affordable Housing Legislation: Take the Poll

2008-03-12T08:02:00.001-07:00

Fannie Mae Scopes Micro Loans

2008-03-12T08:00:00.000-07:00

Fannie Mae has rolled out a new small-balance loan program, called Micro Loans, to complement its conventional small-loan program.

The Micro Loans program targets loans of up to $750,000 on properties of five units or more, a market segment dominated by community banks. The company expects the bulk of Micro Loan deals to be for Class B and C buildings housing those earning 100 percent of the area median income and below. Tax credit properties, however, are not eligible for the program.

Read full article here.

LISC Launches Green Development Center

2008-03-12T07:16:00.000-07:00

In March, Local Initiatives Support Corp. (LISC) opened its Green Development Center, a new effort to put green design, construction, and management principles to work in the neighborhood revitalization projects in which it invests.

"Lowered operating costs, increased household income, and the improved health of children, these are direct results of green-focused development," said Greg Maher, LISC's senior vice president for lending.

The center will be led by Madeline Fraser Cook, who recently served as vice president of New Ecology, Inc., a Cambridge, Mass.-based organization that provides technical assistance on green and sustainable design techniques to community-based organizations and affordable housing developers.

Read full article here.

LIHTC Legislation Introduced

2008-02-27T11:49:00.000-08:00

Sen. Maria Cantwell (D-Wash.) this week introduced the Affordable Housing Investment Act that aims to modernize the low-income housing tax credit (LIHTC) program. Cantwell said the bill proposes to remove restrictions that make it difficult to use LIHTCs with other federal programs. The bill also calls for increasing credits for properties in state designated areas, repealing the recapture bond rule, and repealing the 10-year for acquisition credits.

Green Motivation: Take the Poll

2008-02-20T13:59:00.000-08:00

Be Part of AHF's New Campaign for Change: VOTE NOW

2008-02-20T13:48:00.000-08:00

With the presidential election just eight months away, AHF is launching an ambitious effort to bring the industry together around a simple but forceful housing agenda for the next president and secretary of the Department of Housing and Urban Development.

We are calling this campaign Americans for a New Federal Housing Commitment, and our goal is to start to reverse the long absence of coherent policymaking on housing now, before the next president takes office.

We've asked the experts what they think, and now it's your turn.

We have put forth a wide range of possible measures for urgent action by the next president and the president's appointee to run HUD, as well as a list of potential HUD secretary candidates. We focused on encouraging more efficient use of current government resources and private market forces, since expensive new direct subsidies are not likely to be enacted, with some limited exceptions.

We have chosen not to list broad policy goals like "end chronic homelessness," since they are too general to elicit a meaningful response.

Your input is crucial to this process. We will use your feedback to boil this down to a list of 10 principles for federal housing policy.

With your help, we will then seek endorsements for our principles from prominent Americans not just those in housing and government but also business leaders, members of Congress, and other opinion leaders. We will present our policy proposal with a list of endorsers to key advisers of the presidential candidates and distribute it to state and national leaders.

We will invite key policy advisers to the final presidential candidates to attend a public forum on housing policy and HUD as part of AHF Live: The 2008 Tax Credit Developers' Summit, which takes place Nov. 5-7 in Chicago.

Click here to vote now.

Take Our Presidential Candidate Poll

2008-01-15T06:10:00.001-08:00

AHF is conducting an online poll as part of a special feature coming in March - Rethinking Federal Housing Policy: What the next president needs to know.

Please cast your vote below. Additional feedback and comments can be e-mailed to cserlin@hanleywood.com.

AHF Readers' Choice Awards Nomination Forms Now Available

2008-01-03T06:33:00.001-08:00

If you have done an outstanding affordable housing development in 2007 or have an exemplary one planned for 2008, AFFORDABLE HOUSING FINANCE magazine wants to hear about it. The finalists of the annual Readers' Choice Awards will be published in the August 2008 issue; AFFORDABLE HOUSING FINANCE readers will then vote for the winner in each category, with the winners published in the November 2008 issue. The winners also will be presented with awards at AHF Live: The Tax Credit Developers' Summit, Nov. 7, 2008, in Chicago.

The deadline for nomination forms is April 14, 2008.

Click to: Download the PDF / Download the Word Document

Tell Us About Your Technology Uses and Needs ... And Win an 80GB iPod!

2008-01-03T06:32:00.000-08:00

What technology is essential to your tenants? What technology could you personally never do without? What technology has the greatest impact on your company's bottom line? Apartment Finance Today magazine wants to know.

We're working on a technology-focused upcoming issue, and we need our readers' help.

Click here to fill out Apartment Finance Today's technology-related survey. Please take a few minutes to let us know your thoughts: Not only will you help us shape the magazine's content, but you'll also be entered into the drawing for an 80GB iPod. The deadline to respond to the survey is Feb. 29.

The results will be published in the May 2008 issue of Apartment Finance Today.

For more information, please contact Senior Editor Jerry Ascierto at jascierto@hanleywood.com.

Bank of America Restructures Community Development Division

2007-11-20T15:11:00.000-08:00

Bank of America’s Community Development Banking is no longer its own division. It has recently been integrated into the Commercial Real Estate Banking division.

Phyllis Caldwell, who has been president of Community Development Banking, is retiring after 20 years in banking.

The bank will continue to have community development banking and community development managers, said spokesman Greg Barnard.

“We’re always evolving,” he said, explaining that the business “is moving away from a line-of-business model to a geographic-coverage strategy.”

Barnard added that community development banking has been a successful line of business for Bank of America.

The restructuring has meant some layoffs.

The Commercial Real Estate Banking division is led by Gene Godbold.

One observer said that banks are under earnings pressure so the consolidation of divisions may be a trend. On the downside, community development no longer remains a distinct unit. However, others may argue that the consolidation is good because the community development products become part of the mainstream bank business.

HUD Revises Rule on PBV Rents

2007-11-20T10:11:00.000-08:00

The Department of Housing and Urban Development (HUD) issued a final rule that drops the requirement that public housing agencies limit their Sec. 8 project-based voucher rents to low-income housing tax credit (LIHTC) rents at assisted properties, reports Nixon Peabody, LLP.

The final rule reverses the cap on project-based voucher rents to LIHTC rents at assisted properties. In addition, HUD reiterates that public housing agencies may not enter into assistance contracts until HUD, or an independent entity approved by HUD, has conducted the required subsidy layering review and determined that the assistance is in accordance with HUD requirements.

Clara Fox, Champion of Affordable Housing, Dead at 90

2007-11-19T08:57:00.000-08:00

Clara Fox, advocate for affordable housing and the founder of Settlement Housing Fund, died Nov. 9 in New York City.

“Clara originated the idea of combining low- and moderate-income housing with social programs,” said Conrad Egan, executive director of the National Housing Conference.

In 1969, she founded the Settlement Housing Fund, one of the first private nonprofit housing developers. The organization has created about 8,600 affordable apartments at more than 55 developments.

Fox also ran the first programs to train former New York City renters to become homeowners and managers after their buildings converted to middle-income cooperative housing through the Mitchell-Lama program, said Egan.

Born in the Bronx in 1917, Fox worked as the director of a private nursery school and as the first coordinator of New York City’s Head Start pre-kindergarten education program prior to founding Settlement Housing Fund.

Most recently, Fox served as co-chair of the New York Housing Conference, a regional affiliate of the National Housing Conference. At the time of her death, she was busy planning and organizing the annual awards luncheon in New York for these organizations, as she has done for the past several years.

“She was generous with her time, and mentored her successors,” said Egan. “Without question, Clara was always the brightest bulb in the room.”

Fox is survived by her daughter, Roberta Fox, of Manhattan, and a sister, Florence Blank, of the Bronx.

AHIC Names 2008 Leaders

2007-11-06T05:35:00.001-08:00

Beth Stohr of U.S. Bancorp Community Development Corp. (CDC) has been elected president of the Affordable Housing Investors Council (AHIC) for 2008.

Stohr was one of several new officers named at AHIC’s recent annual meeting. Patrick Nash of JPMorgan Capital Corp. will be vice president; Rosalyn Ciulla of Key Community Development, secretary; and Donald Phelan of Babson Capital Management, treasurer. In addition, AHIC elected Leila Ahmadifar of Citibank Community Development, Jill Edward of Merrill Lynch CDC, and Sindy Spivak of Bank of America as new board members.

AHIC is a nonprofit organization comprised of corporations engaged in the investment of funds for affordable housing. For more information, visit www.ahic.org.

AHF LIVE: CONFERENCE COVERAGE

2007-11-02T08:30:00.000-07:00

Check out coverage from this year's AHF Live: The Tax Credit Developers’ Summit. The three-day conference at the Hyatt Regency in Chicago, Oct. 24-26 provided 600+ industry attendees with opportunities to learn and network.

Click on the links below for session recaps, photos, quotes and more.

Conference Wrap-Up

Slideshow: Snapshots from AHF Live
Slideshow: AHF Hall of Fame Awards
Slideshow: AHF Readers' Choice Awards
Slideshow: Bus Tour: Chicago

Need to Know: Key Regulatory Developments

2007-10-30T10:53:00.000-07:00

Under this headline, we list recent regulatory developments and upcoming deadlines as mentioned in the monthly Washington Briefs column in the print version of AFFORDABLE HOUSING FINANCE.

Some upcoming comment and grant deadlines:
- Nov. 13: Proposed revised Department of Housing and Urban Development (HUD) environmental regulations.
- Nov. 13: Major consolidating revisions to the U.S. Department of Agriculture Rural Development agency’s guaranteed loan rules.
- Dec. 24: Applications for $32.9 million under the Brownfields Economic Development Initiative.
- Dec. 26: Proposed Internal Revenue Service (IRS) arbitrage guidance for tax-exempt bonds.
- Dec. 26: IRS proposal to make transactions “reportable” if they are the subject of a patent or patent application.

Other regulatory news:
- HUD released its lists of Difficult Development Areas and final Fair Market Rents or 2008, both available at www.huduser.org. The Qualified Census Tracts remain unchanged for 2008.
- Despite fervent protests, HUD approved plans to demolish 4,500 units of New Orleans public housing.
- A Brookings Institute study found housing construction gluts correlate more with income inequality and economic segregation than with population growth.

Speculation Begins on Next HUD Secretary

2007-10-18T12:37:00.001-07:00

Rumors within the HUD bureaucracy are swirling about who will succeed HUD Secretary Alphonso Jackson, if he resigns, which is widely expected.

The buzz within HUD is that the Bush White House may choose a 37-year old Texan who is very well-connected politically but has no experience in housing policy, finance, or development.

A HUD staff person who requested anonymity for fear of retaliation, said the internal rumor was that the current top choice to succeed Jackson is Keith Nelson, assistant secretary for administration.

Other sources at HUD said Nelson probably will not be nominated because he
could not obtain Senate approval for the post. This is because the HUD
unions dislike him intensely and may have the ability to prevent the Senate
from confirming his nomination.

The other obvious candidate is Roy Bernardi, the deputy secretary.
However, Jackson reportedly dislikes him, partly because he testified to the
Inspector General that Jackson told senior staff that the politics of potential contractors should be considered in the contracting process.

That leaves Brian Montgomery, the assistant secretary for housing, as the
only candidate who does not have too much baggage to be nominated and
confirmed.

Housing industry leaders give Montgomery high marks for his work as
assistant secretary, and he came from the White House staff, so he has the
right connections to get the job.

Nelson is the son of Pamela Hudson Nelson, who is a close personal friend of Laura Bush and a visual artist who is a presidential appointee to the Commission of Fine Arts in Washington, D.C.

Nelson was confirmed in the top administrative job at HUD in October 2005. Before that, HUD says he worked in the Bush administration at the Department of Labor in a variety of capacities, including as the acting deputy chief information officer and associate deputy secretary for management.

Prior to his service in the federal government he spent three years at Dow Jones & Co. as a business development senior manager.

Earlier in his career, Nelson worked as a sports journalist for the The Dallas Morning News and the Tyler Morning Telegraph.

He has a bachelor’s of arts degree in journalism from the University of Texas at Austin.

HUD Contracting Investigation Heats Up

2007-10-16T09:13:00.000-07:00

The contracting practices of the Department of Housing and Urban Development (HUD) are under investigation by at least four federal law enforcement bodies as charges continue to surface about corruption and favoritism in contracting decisions.

In October, National Journal magazine reported that the FBI, a federal grand jury in Washington, and the Justice Department’s Public Integrity Section are exploring whether HUD Secretary Alphonso Jackson lined up a contract at the HUD-controlled Housing Authority of New Orleans (HANO) for William Hairston, a friend of Jackson’s, who received a $485,000 no-bid contract for working at HANO.

But AFFORDABLE HOUSING FINANCE has learned that the contract at issue in those news reports is a very small part of a larger picture of alleged corruption and favoritism in contracting decisions. Sources within HUD confirmed that HUD Inspector General (IG) Kenneth Donohue has initiated at least two and possibly three new investigations into HUD contracting.

Read full article here.