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HUD Cuts Inspection Notice Timetable
The Department of Housing and Urban Development (HUD) announced it is dramatically reducing the advance notice it provides to public housing authorities (PHAs) and private owners of HUD-subsidized apartment developments subject to the Real Estate Assessment Center Uniform Physical Condition Standards inspections. HUD’s new standard provides PHAs and private owners of HUD-assisted housing 14 calendar days’ notice before an inspection, a reduction from the current notice, which can frequently extend up to four months. To learn more, click on the Web Link below.
Industry Trends
"Study Finds Multifamily Lending Is Vital in Meeting CRA Requirements"
"Freddie Mac’s David Leopold Talks Affordable Housing and the Importance of Subsidy"
"Silicon Valley Firms Invest in Affordable Housing"
Tax Issues and Tax Reform
"Top 5 Ways to Use Opportunity Zone Funds in LIHTC Deals"
"Large Nonprofit Developers Unite in New Tax Credit Fund"
State and Local Activities
"A Plan to Trade Density for Affordability in Fast-Growing Austin"
"Gov. Sisolak Throws Support Behind Nevada Affordable Housing Plan"
Association News
NAA Offers Online Learning Discount for Fair Housing Courses
Take the Free Industry Essentials Webinar
Register for the Online SHCM Webinar Series
Attend NAA’s Apartmentalize Education Conference
January 2019 Apartment Jobs Snapshot
NAHMA Releases 2018 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
Study Finds Multifamily Lending Is Vital in Meeting CRA Requirements
Novogradac (02/11/2019) Lawrence, Peter
Adjustments to the Community Reinvestment Act (CRA) may be forthcoming, so regulated financial institutions need to examine how such changes could affect their investment and lending activities. The Office of the Comptroller of the Currency currently regulates just more than 20 percent of the nation's banks, but those banks combined have more total assets than those regulated by either the Federal Deposit Insurance Corporation or the Federal Reserve Board—about 70 percent of all covered financial institution assets—and regulate the bulk of Low-Income Housing Tax Credits (LIHTCs) and new market tax credit (NMTCs). These federal agencies could potentially use a collaborative process to create a proposed rule that would apply to all regulated banks. Research by the Urban Institute reveals that multifamily loans are instrumental in meeting CRA standards. In terms of targeted lending, a larger percentage of banks' multifamily lending is low- and moderate-income (LMI) lending (47.6 percent) compared to banks' single-family lending (26.5 percent). In its report, the Urban Institute said LMI multifamily lending was considered to be loans made in LMI census tracts. Although the researchers had to make certain assumptions based on the data that was available, they determined that 80 percent of LMI multifamily lending was found to be CRA eligible. Looking at the top 75 metropolitan statistical areas based on 2017 population, the largest five lenders accounted for 44 percent of the multifamily market share.
Freddie Mac’s David Leopold Talks Affordable Housing and the Importance of Subsidy
Commercial Observer (02/15/19) Cunningham, Cathy
David Leopold heads Freddie Mac’s Targeted Affordable Housing division, which serves the lower-income multifamily rental housing market. Last year, Leopold’s team saw $8.1 billion in originations. He says, "I run three vertical businesses; our targeted affordable Optigo network, which is a network of 17 lenders; a structured finance business that is focused on targeted affordable housing in seasoned portfolios; and I run our Low-Income Housing Tax Credits (LIHTC) equity platform...We produced a total of $8.1 billion in new financing plus $499 million in LIHTC equity, so both of those constitute record years on the debt side. On the equity side, we re-entered the business after being out for 10 years. A large part of what we do preserves affordable housing but LIHTC investing helps us advance and create new units." Leopold believes that now is the right time to re-enter. He explains, "It was important for the market because our goal is to provide liquidity, stability, and affordability to the residential market, and in the last 10 years there have been two major disruptions in the LIHTC market—first in 2008 and then following the last presidential election when there was a lot of uncertainty around tax rates; what is generally a very stable market became unstable very quickly. The LIHTC is the most important subsidy for affordable housing in the country and if we're true to our charter of providing stability, we need to provide it when that subsidy is on its ear."
Silicon Valley Firms Invest in Affordable Housing
Affordable Housing Finance (02/13/19) Kimura, Donna
An affordable housing community in the works for more than a decade recently broke ground in San Jose, Calif. The Leigh Avenue Senior Apartments development will bring 64 affordable homes to chronically homeless seniors, with some units reserved for seniors requiring in-home supportive services. Officials at First Community Housing worked to keep the project viable despite shifting real estate cycles, changing financial conditions, and the closure of the state's redevelopment agencies. The project demonstrates how Housing Trust Silicon Valley is deploying its innovative TECH (Tech + Equity + Community + Housing) Fund, an investment vehicle designed to make it easier for philanthropists and area employers to take part in the affordable housing solution. The roughly $50 million Leigh Avenue development is using several funding sources, including a 4 percent Low-Income Housing Tax Credit equity from Raymond James Tax Credit Funds, a TECH Fund loan from Housing Trust Silicon Valley, Santa Clara County Measure A funds, the city of San Jose funds, and a Federal Home Loan Bank of San Francisco Affordable Housing Program funding. The San Jose metro area has a shortage of approximately 58,600 rental homes affordable and available to households at or below 50 percent of the area median income, according to a report by the National Low Income Housing Coalition. The money raised by the TECH Fund will be revolved over the course of a 10-year investment period, at the end of which investors receive a modest return on their investments in addition to the original investment being repaid.
Tax Issues and Tax Reform
Top 5 Ways to Use Opportunity Zone Funds in LIHTC Deals
Affordable Housing Finance (02/07/19) Soroka, Kathie; Milder, Forrest
There are multiple ways in which Low-Income Housing Tax Credit (LIHTC) transactions can benefit from Opportunity Zone (OZ) funds. For the first LIHTC deals using OZ funding, however, the economic benefit above the LIHTCs would likely be modest. One approach is combining OZ funds with LIHTCs by having the LIHTC investor fund be a Qualified Opportunity Fund, as opposed to looking for a separate OZ fund to also invest. A key challenge with OZ investment is convincing investors there is a return beyond the OZ capital gains tax deferral that makes it worth staying in for the 10-year period. It is also important to note that an investor should have capital gains with a sufficiently large other income tax liability that they can use with the LIHTC tax credit and the losses it provides. Large corporate investors could be a good fit, as well as family offices, a term for wealthy families that have taken their money management in-house and do not have the bureaucracy of typical LIHTC investors. Tax advisors will need to pay attention to the rules that apply to closely held investors. LIHTC sponsors seeking to combine a project with OZ funds will likely be better off with the relative simplicity of a single investor. They also should focus on a project involving new construction in order to curb acquisition issues and facilitate adhering to the 30-month rule—to get the OZ benefit, the OZ fund’s initial investment must be matched by the project’s appreciation during the 30-month period after acquisition.
Large Nonprofit Developers Unite in New Tax Credit Fund
Apartment Finance Today (01/28/19) Kimura, Donna
The National Affordable Housing Trust (NAHT) has unveiled a Low-Income Housing Tax Credit (LIHTC) fund that brings together deals from leading, mission-driven nonprofit developers nationwide. NAHT’s new fund is unique because all of the projects will be by members of Stewards of Affordable Housing for the Future (SAHF), a collaborative of 13 premier nonprofit affordable housing providers. The members collectively own more than 138,000 affordable rental homes. About 10 of the organization’s members, including BRIDGE Housing, CommonBond Communities, and The Community Builders, are expected to take part in the SAHF Affordable Communities Fund. It marks the first time that these developers have come together, and through NAHT will present $100 million of mission-oriented projects to the market. NAHT is a longtime housing credit syndicator and development advisory organization. Roughly 97 percent of its portfolio comprises developments from strong nonprofits, including SAHF members, says Paul Cummings, senior vice president, director of originations and capital markets at NAHT. Overall, LIHTC developments have a strong track record, including a foreclosure rate of less than 1 percent. NAHT’s portfolio has consistently performed above industry standards, with higher occupancy rates and stronger debt-service coverage ratios, according to company officials. “We think for an investor this is a great place to say I want my money to have a significant impact and really work in a meaningful way in the marketplace,” says Lori Little, NAHT president and CEO. NAHT has started raising capital and hopes to close the fund by midyear.
State and Local Activities
A Plan to Trade Density for Affordability in Fast-Growing Austin
Next City (02/11/19) Brey, Jared
Voters in Austin, Texas, approved a record-setting $250 million housing bond last fall, making lawmakers and advocates hopeful about prospects for affordable housing. "Things are changing rapidly in a good way, in our opinion, because the affordability issue has become such a prominent, important discussion in our community," says Nora Linares-Moeller, executive director of HousingWorks Austin. Austin Councilmember Gregorio Casar hopes to expand the number of subsidized housing projects with a proposal called "Affordability Unlocked." The proposal calls for waiving many of the city's land-use regulations, such as height and density restrictions, compatibility with neighboring buildings, setback requirements, and parking minimums. The program would primarily apply to income-restricted projects that use Low-Income Housing Tax Credits or other subsidies, including proceeds from the recent local housing bond. To qualify for the waivers, rental projects would have to lease at least half of their units at rates that are affordable to tenants earning no more than 60 percent of Median Family Income — $36,120 for an individual or $51,600 for a four-person household. At least a quarter of the units would need to have two or more bedrooms. The city council will take up the proposal at the end of February, and if it approves the concept, the city manager will draft legislation to implement the proposal, which could go up for a final vote in May, according to Casar.
Gov. Sisolak Throws Support Behind Nevada Affordable Housing Plan
Las Vegas Review-Journal (NV) (01/17/19) Davidson, Michael Scott
Nevada Gov. Steve Sisolak backs a proposal to allocate $40 million in state tax credits before 2025 to build and preserve affordable housing in the state. Sisolak announced his approval of the program on Jan. 16 during his first State of the State address. His proposed two-year budget recommends allocating $10 million in affordable housing tax credits beginning in the 2020-21 fiscal year. A pilot program was proposed last year at the conclusion of the Nevada Legislature’s interim affordable housing committee. The committee requested a bill for this year’s legislative session that would replicate the national Low-Income Housing Tax Credit program, the federal government’s most effective program to fund affordable rental housing. Committee members recommended a state tax program that would give private investors a dollar-for-dollar reduction in state tax liability for helping to finance affordable rental housing. The housing would be subject to rent restrictions and tenant-income limits for 30 years. The program would be administered by the Nevada Housing Division, and unused credits could roll over from year to year. Mike Shohet, executive vice president of real estate at affordable housing nonprofit Nevada HAND, estimates that the state tax credit program would increase production of affordable housing by roughly 600 units a year, on top of about 1,000 units a year created by the federal tax credits.
Association News
NAA Offers Online Learning Discount for Fair Housing Courses
The National Apartment Association Education Institute (NAAEI) is offering a discount code worth 30 percent off to SHCM credential holders for purchases of online Fair Housing courses on Visto, the organization’s learning management system. To get 30 percent off any Fair Housing training course, use promo code: FHFORALL30 at checkout. The code is valid through Feb. 28. For more information, click on the Web Link provided below.
Take the Free Industry Essentials Webinar
The National Apartment Association (NAA) is offering a free Industry Essentials webinar taught by industry expert Alexandra Jackiw, CAPS, CPM. Jackiw’s exciting and informative one-hour webinar will feature trends affecting rental housing, economic threats and a real estate outlook for 2025. Whether you are new to the industry or a seasoned veteran, this webinar is the perfect opportunity for you to learn more about multifamily housing. The webinar will be held Tuesday, March 12, at 11 a.m. Eastern. Visit the Web Link below to register.
Register for the Online SHCM Webinar Series
Take advantage of this convenient, affordable way to prepare to earn the Specialist in Housing Credit Management (SHCM) certification in four online sessions, or brush up on your housing credit compliance knowledge. Each webinar will last approximately two hours, followed by a question-and-answer period for attendees. The webinars take place on Wednesdays throughout April and early May with each beginning at 12 p.m. Eastern time.
The course schedule is as follows:
- April 3: Chapter 1, Program Regulations presented by Gwen Volk
- April 10: Chapter 2, Unit Eligibility presented by Dodi Gershen
- April 24: Chapter 3, Applicant Eligibility & Certification presented by Anita Moseman
- May 1: Chapter 4, Monitoring & Compliance presented by Heather Staggs
The cost for the course, including the SHCM exam and SHCM application fee, is $549 for NAAEI and National Affordable Housing Management Association (NAHMA) members and $599 for nonmembers. Individual webinars can be purchased for $139 each for members or $149 each for nonmembers. To register, click the Web Link provided below.
Additionally, a Continuing Education Units (CEU) webinar will be offered on May 23. Participation in the CEU webinar is free for SHCM credential holders in good standing and offers two continuing education credits. If you need assistance with the registration process, please contact: Amy Allen, at AAllen@naahq.org.
Attend NAA’s Apartmentalize Education Conference
Apartmentalize, formerly NAA’s Education Conference & Exposition, is the industry’s premier education conference and trade show, attracting 10,000 multifamily housing professionals seeking education, networking and business opportunities. It is the largest event in the multifamily housing industry. This year’s conference will be held in Denver, Colo., from June 26-28, and will feature more than 80 education sessions. To find out more, view the conference schedule and register to attend, visit the Web Link below.
January 2019 Apartment Jobs Snapshot
NAAEI brings you its monthly workforce update: The Apartment Jobs Snapshot, which highlights labor force trends in the rental housing industry. The profile examines total job posting trends by position and geography as well as average salaries, time required to fill a position and the top skills found in job postings. Click on the Web Link below to view the snapshot.
NAHMA Releases 2018 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its 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
NAHMA Biannual Top Issues in Affordable Housing Spring Conference
March 3-5, 2019
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NAA Advocate
March 5-6, 2019
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LeadingAge PEAK Leadership Summit
March 17-20, 2019
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NAA Apartmentalize
June 26-28, 2019
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NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 27-29, 2019
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News summaries © copyright 2019 SmithBucklin
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