Deals that can get across the finish line.
That’s what many state housing finance agencies will be focusing on next year as they revise their qualified allocation plans (QAPs) to better identify and reward the most viable affordable housing proposals.
Developer experience will carry added weight in several states when they award low-income housing tax credits (LIHTCs) next year.
he Colorado Housing and Finance Authority and the South Carolina State Housing Finance and Development Authority are among the state agencies planning to revise their evaluation of a development team or increase points for developer experience, according to a survey by Affordable Housing Finance. The study looked at changes to 2011 QAPs from across the country.
The increased attention on experience comes at a time when deals are tougher to close because of limited investor equity and tougher debt standards.
Several states, including Iowa and Texas, are also looking at toughening their stand on developers who have had problems with recent deals.
Other states are considering additional moves to make sure projects move forward.
Applications that come with a hard equity commitment or letter of interest from a LIHTC syndicator look to have an advantage in Michigan and New Mexico next year.
A few agencies, including the South Dakota Housing Development Authority, plan to expand their “difficult-to-develop” areas to allow more projects to receive a 30 percent boost in eligible basis.
The housing finance agencies are coming off a hectic year. In addition to reserving their annual LIHTC authority, they awarded $2.25 billion under the special Tax Credit Assistance Program (TCAP) and several billion dollars more under the Tax Credit Exchange Program (Sec. 1602) to assist stalled project.
Many states, including California, Colorado, Delaware, Idaho, Maryland, and Massachusetts, reported that developer demand for LIHTCs increased in 2010. A few states, including Alabama and Arizona, reported a drop in demand.
Several agencies noted seeing an increase in LIHTC pricing and growing confidence that investors are returning to the market.
