SACRAMENTO, CALIF.—The California Tax Credit Allocation Committee (CTCAC) postponed its first round of allocating low-income housing tax credits so it could put into place the many provisions of the new American Recovery and Reinvestment Act.
State leaders are looking at modifying its qualified allocation plan to make available new federal HOME and tax credit resources that were part of the recently signed bill.
CTCAC officials are proposing to reschedule the first-round application deadline from April 6 to May 26. The new schedule was tentative at press time.
In another matter, developers and affordable housing advocates were hit by a freeze in state financing that could affect an estimated 50,000 affordable rental and for-sale homes across California.
A $41 billion state budget shortfall prompted the Pooled Money Investment Board to shut down financing for infrastructure projects in late 2008. The board manages the state's Pooled Money Investment Account, which provides loans to bond-funded infrastructure projects and to the state general fund to help meet cash-flow needs. The money that the account lends to infrastructure projects gets replenished when the state sells bonds, but the credit crunch and state budget problems had combined to close the bond market to the state, according to state Treasurer Bill Lockyer.
The state freeze was bad enough, but there could be additional consequences. If the issue drags out, banks may become reluctant to make construction loans because of the unknown situation with the state funding for the projects, says Julie Snyder, policy director at Housing California, a statewide coalition of developers and advocates.
Snyder and others think that the bond freeze is a short-term situation. Some expected the state to test the market with a bond sale in late March.
Colorado sells bonds
Bonds were also news in Colorado, where the Colorado Housing and Finance Authority (CHFA) issued $90 million in fixed-rate, tax-exempt single- family mortgage revenue bonds in March.
It was CHFA's first single-family bond issue since June 2008. The agency historically has issued bonds quarterly, but the frozen market kept it from issuing new bonds until now. Demand exceeded availability by 2.4 to 1, with about $218.9 million in orders received.
“There was pent up demand for good investments,” says Milroy A. Alexander, executive director and CEO. The bonds were rated AAA.
Alexander estimates that only a handful of housing finance agencies have completed a bond issue so far this year.
To make the bonds more attractive in this tough economic environment, CHFA turned to a fixed-rate structure, a departure from the variable-rate bonds that the agency has typically issued in recent years.
The bonds sold at 2.4 percent to 5.5 percent interest, with maturity dates ranging from 2010 to 2029.
About $28 million of the bonds were sold to Colorado retail investors, meaning individuals, says Alexander. The proceeds from the bond sale will help finance CHFA's home lending programs.
Oregon Senate OKs housing bill
The Oregon Senate passed legislation that will significantly boost funds for the development of affordable rental housing in the state.
With Gov. Ted Kulongoski's approval, the Oregon Housing Opportunity Bill is expected to generate about $19 million in the 2009-2011 biennium through a $15 increase in the fee charged for recording documents whenever a real estate title changes hands. The bill increases the recording fee to $26.