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HUD Correcting EIV System Errors
The Department of Housing and Urban Development (HUD) issued a statement saying it is aware a number of owners/agents are encountering old or missing data when attempting to view Enterprise Income Verification (EIV) System reports for some or all of their properties. HUD is working to correct the issues in the system. It says those experiencing these issues must refer to Chapter 5-13 of HUD Handbook 4350.3 for the hierarchy of acceptable forms of verification. For compliance monitoring purposes, copies of the incorrect EIV reports must be retained. To review the Handbook, click on the Web Link below.
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Industry Trends
"To the Rescue: New Markets Tax Credit Saving Rural Communities"
"5 Ways Resident Services Are Changing"
"Debt Platform Meshes Well With Rural America"
Tax Issues and Tax Reform
"Report Examines Challenges for LIHTC Program"
"The Promise of Income Averaging"
Congress
"A Decade Later, Impact of HERA Still Felt in Affordable Housing"
State and Local Activities
"Fannie Mae Makes Good on Its Affordable Housing Promises"
"Denver Approves Bold Rent Program"
Association News
Learn How to Improve Team Performance
Deadlines for COQ Recognition and Awards Program Approach
NAHMA Launches Advocacy Challenge
Navigating the New Housing Credit Income Averaging Option
IRS Releases Low-Income Housing Tax Credit Rates for July
NAHMA Releases New 2018 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
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Industry Trends
To the Rescue: New Markets Tax Credit Saving Rural Communities
Affordable Housing Finance (06/27/18) Coffman, Georgia; Gill, Cash
Developers and leaders in low-income and rural communities were concerned last year about the possible elimination of the New Markets Tax Credit (NMTC) program. In December, however, the House Ways and Means Committee preserved the NMTC through 2019. Enterprise Financial CDE, which specializes in funding in low-income metropolitan and rural areas, has received four NMTC awards since its 2008 launch. Enterprise Financial CDE has invested significant amounts of its NMTC awards in the past to two rural Kansas projects in the towns of Pittsburg and Atchison: Block22 is a unique learning community centered on students and young businesses, while the Atchison YMCA's revitalization project completed construction in December. The center serves more than 6,000 children, families, and individuals. Now that the Community Development Financial Institutions (CDFI) Fund has awarded another $3.5 billion to low-income and rural communities, even more positive results will likely be forthcoming. According to the CDFI Fund, 70 percent of NMTC investment proceeds are expected to be used for operating businesses in low-income communities, whereas the other 30 percent could be used for real estate projects in these areas. Roughly $680.5 million will be used to finance and support projects in rural areas, which have been a focus of the NMTC program in the last few years. This will be extremely advantageous to the people of these communities and the nation's overall well-being.
5 Ways Resident Services Are Changing
Affordable Housing Finance (07/05/18) Janisse, Flynann
The Department of Housing and Urban Development estimated in 2016 that 64 percent of low-income households own a smart phone, so leveraging technology can be an effective approach to creating individualized plans to spur desired results. Meanwhile, conducting listening tours to pinpoint what the business community needs is an important step in helping the residents of any served community. A pilot program at the Rainbow Housing Assistance Corp. that includes apartment maintenance and HVAC repair enables individuals to complete required assessments and apply for job openings. A recent study from the Federal Deposit Insurance Corp. found that 7 percent of American households are unbanked, so connecting with local bank branches and services can link directly to practical applications. Fifth Third Bank offers Express Banking, a low-barrier, no-fee product that assists residents in becoming banked. In addition, the Economic Research Service found that food insecurity for low-income households was recorded at over 30 percent in 2016. As state agencies and auditors start defining compliance in relation to food programs, developers need to ask for specifics before engaging in a service-delivery platform. Finally, there needs to be a concerted effort on helping families break out of generational poverty by focusing on young people living in affordable housing. Well-rounded, education-focused youth programming tends to be resource-intensive, but when executed correctly, such services can yield significant benefits.
Debt Platform Meshes Well With Rural America
GlobeSt.com (06/25/18) Brown, Lisa
Low-Income Housing Tax Credit (LIHTC) and rural housing programs enable more properties to be developed, including a recent $19.605 million loan for a mixed-income apartment home community in Royse City, Texas, called Cypress Creek Apartment Homes. The 220-apartment home community features one, two, three, and four-bedroom apartment homes that were developed, constructed, and managed by Bonner Carrington. The loan is the nation’s largest Rural Housing Service Section 538 Guarantee Rural Rental Housing Program (RHS 538 GRRHP) deal ever originated and closed, according to Bellwether Enterprise Real Estate Capital LLC. As a mixed-income affordable housing property, Cypress Creek Apartment Homes operates under the rent and income restrictions of the RHS 538 GRRHP and 9 percent low-to-moderate-income housing tax credit programs. A portion of the project offers market rate rents that fall below the RHS 538 GRRHP restrictions of 115 percent of area median income, says Bob Morton, director of Rural Housing Services Programs and senior vice president of Bellwether Enterprise. "This transaction is significant because it shows the USDA 538 loan program being used in a situation where you would normally see a Fannie Mae or Freddie Mac permanent loan being used,” says Kevin Bowen, senior vice president of Bellwether Enterprise. "This is important because many affordable developers dismiss or are unaware of the RHS 538 GRRHP program when considering their financing options for new construction LIHTC deals."
Tax Issues and Tax Reform
Report Examines Challenges for LIHTC Program
Apartment Finance Today (07/17/18)
Recent tax reform legislation is expected to "have an uncertain effect on future Low-Income Housing Tax Credit (LIHTC) investments because a reduction in corporate taxes lessens the financial incentive for corporations to make equity investments in tax credits," according to a new Urban Institute report. The authors warn that "If LIHTC investments falter, developers will not build affordable rental housing and existing units will be lost." They cite the housing credit as essential to rural communities that may be most susceptible to shrinking investments. The Consolidated Appropriations Act of 2018 mandates a 12.5-percent increase in LIHTC allocations through 2022, but it may fail to fill the void created by the tax reform revisions as it will have little effect on the pricing of credits and investor tax benefits, and is only a temporary fix. Furthermore, LIHTC's fate is tied to that of other federal housing programs because it often taps other funding sources such as HOME and the National Housing Trust Fund. The report says the elimination of other federal housing programs may cause LIHTC to concentrate on preservation, leading to fewer investments in new construction of additional supply, and national stagnation of affordable rental housing growth.
The Promise of Income Averaging
Novogradac (07/05/2018) Strojan, Elizabeth
The Consolidated Appropriations Act of 2018, which was passed by Congress and signed by President Donald Trump, has made income averaging an option for the Low-Income Housing Tax Credit (LIHTC) program. The new option will be a game changer for the LIHTC program because it will allow a broader range of families to gain access to federal housing assistance, writes Elizabeth Strojan, director of government affairs for the New York City Housing Development Corporation. The LIHTC program was designed to serve families with incomes below 60 percent of area median income (AMI). However, moving the maximum income to an average will allow the LIHTC program to finance homes for households earning up to 80 percent AMI, as long as the average of all LIHTC units stays at 60 percent AMI. As a result, it will allow for internal cross-subsidization within a property, "meaning higher rents paid by households with slightly higher incomes help offset lower rents paid by households with lower incomes," according to Strojan. The LIHTC program will be able to serve a broader range of families in need of affordable housing, and support more diverse and inclusive developments. Moreover, income averaging will help preserve affordable housing, considering "the greater range of AMI levels allows more units to qualify as low-income in preservation transactions, so that more resources are available to preserve existing affordable housing," notes Strojan.
Congress
A Decade Later, Impact of HERA Still Felt in Affordable Housing
Novogradac Journal of Tax Credits (07/18) Vol. 09, No. 7 Stanhope, Brad
The Housing and Economic Recovery Act (HERA) was signed into law on July 30, 2008, by President George W. Bush to avert a subprime mortgage crisis. HERA included provisions to temporarily increase state Low-Income Housing Tax Credit (LIHTC) allocation authority from $2 to $2.20 per capita, plus a temporary 10 percent increase in the small state minimum. HERA also created a minimum 9 percent rate through 2013, allowed states to designate 9 percent properties as difficult development areas, and get a 30 percent basis boost, while enabling taxpayers to use LIHTCs against their alternative minimum tax (AMT) liabilities. HERA continues to serve as a template for future affordable housing legislation, including the Affordable Housing Credit Improvement Act that was introduced in both houses of Congress last year. "The [Senate and House version of the bill], are both in the HERA mold. We have again been working for years [on improvements]," says Buzz Roberts, president and CEO of the National Association of Affordable Housing Lenders. Bobby Rozen, a retired partner with Washington Council Ernst & Young, believes with a midterm election in November, there is a chance for one or both houses of Congress to shift to Democrat control, potentially facilitating extensive housing legislation. Mark Shelburne, a senior manager at Novogradac Consulting LLP, observes, “The most important lesson learned was the need for all LIHTC interest groups to work together."
State and Local Activities
Fannie Mae Makes Good on Its Affordable Housing Promises
HousingWire (06/28/18) Lloyd, Alcynna
Fannie Mae said June 28 it will invest $26 million in Low-Income Housing Tax Credits (LIHTCs) to finance the first phase of construction of the largest residential building in Far Rockaway, N.Y. Fannie Mae will back development through The Richman Group Affordable Housing Corporation, along such banks as People’s United Bank, N.A. and Signature Bank. NYC Housing Development Corporation and NYC Department of Housing Preservation and Development will provide investments of tax-exempt bonds, allocation of the 4 percent LIHTCs, and low-cost loans, according to the company. Development company Phipps House is expected to begin construction of the 457 residential unit in July 2018, with a goal of completing it in three years. Fannie Mae LIHTC Investments Vice President Dana Brown says, "This LIHTC investment helps us support affordable multifamily housing in one of the highest cost markets in the U.S. LIHTC enables Americans to find affordable rental housing, and we are excited to work with our partners to address our country’s pressing affordable housing challenges." The development will comprise two, 12-story residential high-rise buildings consisting of 227 LIHTC units available for residents earning between 30 percent and 60 percent of area-median-income. Fannie Mae adds that the property will offer various sustainable features, including ENERGY-STAR appliances and a rooftop solar array, and will be certified under Enterprise Green Communities standards.
Denver Approves Bold Rent Program
Housing Finance (07/16/18) Kimura, Donna
Denver is launching an innovative program to give working families struggling with the city's high housing costs a subsidy to rent vacant market-rate apartments. The two-year pilot, which was given approval in July, will help households earning between 40 percent and 80 percent of the area median income, including those who have narrowly missed out on other housing programs. "There's tons of working families that make just enough that they don't qualify for programs but still have incredible rent burdens," says Celia Smoot, director of housing for the Local Initiatives Support Corp. (LISC), which will serve as the program's fund manager. The program seeks to create affordable housing options by putting empty apartments within financial reach of many workers who are at risk of being priced out of Denver. In addition to meeting income requirements, participants must work full time and partake in financial coaching sessions. Roughly 125 individuals and families will participate in the initial pilot, which is slated to begin this fall. They will receive subsidies to ensure that they pay no more than 35 percent of their income toward housing costs. Supporters of the program think it can be a model for other cities. "We're trying to focus on helping the missing middle, helping these working families, and trying to demystify people's ideas about what it means to support low-income families," Smoot says.
Association News
Learn How to Improve Team Performance
Discover what it takes to build a cohesive team with the webinar NAHMA Presents Key People Skills for Property Management Staffers: Developing a Top-Performing Team. This is your chance to learn what it takes to make sure everyone is committed to doing their best to achieve a common goal through a live 90-minute, interactive webinar. The session takes place Tuesday, July 31, beginning at 2 p.m. Eastern, and is led by Brenda Harrington, founder of Adaptive Leadership Strategies LLC. Register for the training session through your local AHMA today.
Topics for the session include:
- The difference between work group and team
- Making sure everyone is heard
- House rules for team meetings
- Presenting an opposing opinion
- Gaining support for important decisions
This webinar is designed for property management staffers; corporate or headquarters staff, including regional and district managers; mid- and entry-level managers and supervisors; compliance specialists; and human resources, accounting and technical staff.
The webinar is brought to you by NAHMA and is hosted by Rocky AHMA. Contact information for your local AHMA can be found by visiting the AHMA Directory map at nahma.org and clicking on the AHMA nearest to your location.
Deadlines for COQ Recognition and Awards Program Approach
The deadline to become a certified Community of Quality (COQ) property through your local AHMA is quickly approaching. Without the certification, you cannot enter this year’s NAHMA Communities of Quality Awards competition. To enter the awards competition, a property must first apply for and achieve national recognition as a NAHMA Community of Quality with a minimum score of 325 points on its National Recognition application. If a property is not currently a nationally recognized COQ property, the deadline for submitting an entry-level application to a local AHMA for consideration in the national program is Sept. 7.
The submission deadline for the awards competition to NAHMA is Nov. 2. The COQ Awards recognize outstanding property management companies providing the highest quality of safe, affordable multifamily rental housing in communities across the country. To download a copy of the COQ Awards brochure, visit
https://www.nahma.org/wp-content/uploads/2014/04/COQ_brochure_2018_FIN
AL.pdf. To learn more about the National Communities of Quality Recognition and Awards Program, click on the link provided below.
NAHMA Launches Advocacy Challenge
In June, NAHMA launched its AHMA “World Cup” Advocacy Challenges, which runs through Sept. 3. The goal is to create a friendly regional AHMA competition to earn points and elevate the importance of affordable housing. Participants earn points for the different types of advocacy they conduct. Affordable housing talking points, statistics and sample posts will be provided to help with advocacy. Winners announced at NAHMA’s October meeting in Washington, D.C. For more information about the challenge, click the Web Link below.
Navigating the New Housing Credit Income Averaging Option
To assist housing credit allocating agencies and other program stakeholders navigate the implementation of the new housing credit income averaging option, the National Council of State Housing Agencies (NCSHA) has developed an Income Averaging Q&A with answers to frequently asked questions about it. NCSHA prepared the Q&A with assistance from housing credit program administration experts Tony Freedman of Holland and Knight and Mark Shelburne of Novogradac & Company and additional input from some key Housing Finance Agencies staff. The document will continue to refined as more information about how to implement income averaging becomes available and determine whether to include additional questions and answers. To read the Q&A’s, visit, click on the Web Link below.
IRS Releases Low-Income Housing Tax Credit Rates for July
The Internal Revenue Service (IRS) issued Revenue Ruling 2018-19, which provides various prescribed rates for federal income tax purposes, including applicable federal interest rates, adjusted applicable federal interest rates and adjusted long-term and tax-exempt rates for July 2018. As provided in the ruling, the appropriate percentage for the 70 percent present value low-income housing credit is 7.68 percent. The appropriate percentage for the 30 percent present value low-income housing credit is 3.29 percent. The applicable percentage for non-federally subsidized new buildings placed in service after July 30, 2008, shall not be less than 9 percent. To read the letter, click on the Web Link below.
NAHMA Releases New 2018 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its new 2018 Affordable 100—a list of the 100 largest affordable multifamily property management companies ranked by affordable unit counts—is available on its website, click Web Link below, as well as in the June issues of NAHMA News, Affordable Housing Finance magazine and Units magazine. The NAHMA website version expands the list to the top 120 largest multifamily property management companies. In addition, the online version presents two specialty lists: the 25 largest housing credit (LIHTC) property management companies and the 25 largest Rural Development program property management companies.
Become a Specialist in Housing Credit Management® (SHCM®) Company!
The three national associations sponsoring the Specialist in Housing Credit Management® (SHCM®) certification program invite your company to become a Specialist in Housing Credit Management® Company, a corporate designation created specifically to honor management companies that successfully maintain a significant portion of their properties and staff to the high standards of the SHCM certification program.
The SHCM program, developed especially for management companies involved with properties developed and operated under the Low-Income Tax Credit (LIHTC) program, is sponsored by the National Affordable Housing Management Association (NAHMA), the National Apartment Association Education Institute (NAAEI), and LeadingAge.
Earning the SHCM Company designation publicly demonstrates that a company is among the finest managers of LIHTC housing in the industry.
For more details on how to become a SHCM Company, click on the Web Link below.
Upcoming Events
NAAEI Affiliate Education Conference
August 13-15, 2018
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NAA Maximize
October 1-3, 2019
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 21-23, 2018
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LeadingAge Annual Meeting and Expo
October 28-31, 2018
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NAA Assembly of Delegates
November 14-17, 2018
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NAHMA Biannual Top Issues in Affordable Housing Spring Conference
March 3-5, 2019
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LeadingAge PEAK Leadership Summit
March 17-20, 2019
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 27-29, 2019
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