Expansion of the Federal Housing Administration’s Tax Credit Pilot Program to the Sec. 221(d)(4) program is under way.
The expansion is being tested in California through the Department of Housing and Urban Development’s (HUD’s) San Francisco office, with a national expansion expected to follow.
The pilot program, which was rolled out in 2012, aims to speed up the processing time for FHA-backed deals that use low-income housing tax credits (LIHTCs). In the past, affordable housing developers had difficulty using FHA products because slow processing times were an obstacle in meeting in the deadlines imposed by LIHTC financing.
The pilot has focused on aligning FHA-insured financing, particularly through the Sec. 223(f) program, with housing credit equity.
The agency has gone from processing approximately $500 million in tax credit FHA originations a few years ago to doubling that business in 2013 and doubling again in 2014. FHA closed out 2014 with almost $2.5 billion worth of tax credit executions through its Multifamily Accelerated Processing and risk-sharing programs, said Ben Metcalf, HUD deputy assistant secretary for multifamily housing programs, at AHF Live: Housing Developers Forum in Pentagon City, Va.
Metcalf also said HUD is continuing to reorganize and streamline its multifamily staff of 1,200 members across the country. The agency has established a team that handles tax credit work in the Southwest and another for the Midwest.
“Over the next year, we will emerge with five distinct teams that handle all of our tax credit volume in each of our five regions, so that whenever you bring a tax credit deal into FHA you have the certainty of dealing with somebody who is a specialist in tax credit work,” Metcalf said.