As the affordable housing industry tries to rebound from a blistering year marked by a critical drop in capital, the Affordable Housing Investors Council (AHIC) will have plenty of work ahead.

“Our goals are to remain focused on AHIC's core mission to educate our investor members on information that is relevant to what they are doing and relevant to market conditions,” says AHIC President Sindy Spivak, senior vice president at Bank of America Merrill Lynch. “AHIC also provides a forum for investors to share their insight on what's happening in the affordable housing market and what's impacting their businesses.”

AHIC is a nonprofit made up of 40 member organizations that invest in affordable housing, largely through lowincome housing tax credits (LIHTCs). The group held its spring meeting in March.

Spivak says there are some positive signs in early 2010, including a pipeline of projects aided by the new Tax Credit Assistance Program and the exchange program.

She adds that investors have more clarity around their investing priorities than they did a year ago. “Goals may not be set in stone, but investors entered 2010 with a better understanding of their goals and strategic direction,” she says.

Huge industry concerns remain, including funding gaps in proposed projects and overall portfolio performance.

“The LIHTC program has been extremely successful and will continue to be successful as long as the industry focuses on solid underwriting and the structuring of new investments based on market conditions as well as works together to strengthen the program to ensure its continued success long term,” says Spivak.

Over the years, AHIC has prepared and updated different guidelines, including one on underwriting. In just one example of its recommendations, AHIC suggests annual replacement reserves of $250 per unit for new seniors projects, $300 per unit for family developments, and more on rehabs.

The strong structuring of deals remains a big industry focus in 2010.

“In general, our recommended underwriting guidelines remain sound and relevant to today,” says Spivak. “What has changed is the level of exceptions to the guidelines. What we saw in 2006 and 2007 was a willingness to accept underwriting exceptions across the industry. These exceptions have been reduced in 2009 and in late 2008, reflecting recent economic and market conditions as well as portfolio performance. Underwriting has been consistently relevant. The issue is sticking to strong and prudent underwriting to ensure strong portfolio performance.”

Spivak's bank is a leading investor. Bank of America invested roughly $583 million in low-income housing, historic, New Markets, and solar tax credits last year, with the majority in LIHTCs.

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