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DHS Publishes Public Charge Rule
The Department of Homeland Security (DHS) published in the Aug. 14 Federal Register its final rule on “Inadmissibility on Public Charge Grounds.” The final rule, which became effective on Oct. 15, amends DHS’ regulations by prescribing how the agency will determine whether noncitizens are inadmissible into the United States because they are likely at any time to become a “public charge”—a person primarily dependent on the government assistance or public benefit. The rule expands the definition of public benefit to include any federal housing assistance programs, in addition to other safety net programs such as Medicaid, Supplemental Nutrition Assistance Program, etc. To read the Federal Register notice, click on the Web Link provided.
Industry Trends
"FHFA Says Fannie and Freddie Must Direct Over One-Third of Multifamily Loans Towards Affordable Housing"
"Income Limits for Average Income Projects"
Congress
"Administration Releases Housing Finance Reform Proposals"
State and Local Activities
"California Releases Proposed LIHTC Program Changes"
"Shortage of Affordable Housing Costs South Carolina $8 Billion a Year"
Green Building
"To Meet Demand for Green Buildings, Developers Get a Leg Up"
"U.S. Green Building Council Report Reveals a 19 Percent Growth in LEED Residential Market"
Association News
Register for the Blended Learning SHCM Online Course
NAHMA Drug-Free Kids Calendar on Sale
Don’t Forget to Work on Your COQ Award Application
NAHMA Releases 2019 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events
Industry Trends
FHFA Says Fannie and Freddie Must Direct Over One-Third of Multifamily Loans Towards Affordable Housing
MarketWatch (09/16/19) Passy, Jacob
The Federal Housing Finance Agency (FHFA) is revising how Fannie Mae and Freddie Mac administer their multifamily businesses. For instance, the two companies will each be limited to purchasing $100 billion in multifamily-housing residential loans between the fourth quarters of 2019 and 2020, up from $35 billion each in 2018 and 2019. However, "mission-driven" loans that were excluded from the caps brought the total volume to $142.5 billion in 2018. The FHFA will also require Fannie and Freddie to direct 37.5 percent of their multifamily activities toward affordable housing. This can include loans on properties subsidized by the Low-Income Housing Tax Credit program, on developments created under inclusionary zoning rules, or on properties covered by a Section 8 Housing Assistance Payment contract. Portions of loans can count on a pro-rata basis toward this requirement if a certain portion of units within a multifamily development are deemed affordable, based on the area's median income. The FHFA also eliminated a loophole that allowed Fannie and Freddie to buy green loans to finance certain energy and water efficiency improvements without it counting toward their overall spending limits. Between 2015 and 2017, Fannie and Freddie's share of new multifamily loans increased from 36 percent in 2015 to 49 percent in 2017, according to the FHFA. Much of that growth was attributable to the green loans exclusion. Roughly half of the loans both firms purchased in 2017 and 2018 were excluded from the FHFA's lending caps.
Income Limits for Average Income Projects
Novogradac (09/09/2019) Stagg, Thomas
A growing number of developers are exploring the average income minimum set-aside, but clear guidance is lacking on how income limits should be calculated for units that are not using the 50 percent and 60 percent limit for Low-Income Housing Tax Credit (LIHTC) and tax-exempt bond developments. The U.S. Department of Housing and Urban Development (HUD) publishes Multifamily Tax Subsidy Projects (MTSP) Income Limits for determining the eligibility of applicants for LIHTC properties and Section 8 Income Limits for HUD's assisted housing programs. Prior to the adoption of the average income minimum set aside, there were three income limits applicable to LIHTC projects at the federal level, 60 percent, 50 percent, and 40 percent. However, the average income minimum set-aside allows for a wider swath of federal income limit bands : 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 percent, and 80 percent. Because the MTSP limits only list a 50 percent and 60 percent limit, there has been some discussion about what income limits should be used. For example, in 14.2 percent of the country, extremely low income (ELI) is greater than a 49 percent limit. If ELI were used as the standard for the average income 30 percent units, it would mean that in 14.2 percent of the country, a developer could identify a unit as a 30 percent unit for purposes of meeting the income average test. Ideally, owners and managers should consult with their state agency, investor, and tax professional before determining 30 percent and 80 percent income and rent limits for their property.
Congress
Administration Releases Housing Finance Reform Proposals
Affordable Housing Finance (09/06/19) Kimura, Donna
In a report, the Treasury Department proposes to replace Fannie Mae and Freddie Mac's existing affordable housing goals with a new system. Regarding the housing goals, David Dworkin, president and CEO of the National Housing Conference, asserts, "They are written into the law, and the civil rights community and a broader group of housing experts, including the National Housing Conference and most of our members, have made clear we won’t accept any back-tracking on this critical element of the system." The administration also says the government should begin moving toward ending the 11-year conservatorship of Fannie Mae and Freddie Mac and forming a recapitalization plan for each. Diane Yentel, president and CEO of the National Low Income Housing Coalition (NLIHC), says "Any housing finance reform effort should increase funding for the HTF [Housing Trust Fund] to at least $3.5 billion and maintain a broad, measurable, and enforceable commitment to access and affordability throughout the housing market." Meanwhile, a report from the Department of Housing and Urban Development (HUD) proposes that the Federal Housing Administration (FHA) become an autonomous corporation within HUD. The proposal also seeks to consolidate HUD’s project-based rental assistance, public housing, Housing Choice Voucher, Rental Assistance Demonstration (RAD), and Real Estate Assessment Center functions into a new Office of Rental Subsidy and Asset Oversight. HUD's plan would also separate the roles of the federal housing commissioner and assistant secretary of housing and urges Congress to lift the 455,000-unit cap in the RAD program.
State and Local Activities
California Releases Proposed LIHTC Program Changes
Affordable Housing Finance (08/26/19) Kimura, Donna
The California Tax Credit Allocation Committee (CTCAC) plans to incorporate a $500 million annual increase in state Low-Income Housing Tax Credits (LIHTCs) into its program. The plan is part of a set of proposed changes recently released by the CTCAC. State lawmakers have approved the big increase in state credits to help developers build more affordable housing around the state. Next year, the $500 million in state credits will be available through the noncompetitive application process. CTCAC is also looking to add authority to utilize the 130% basis increase with state credits allocated from the new $500 million. A series of public meetings on the proposed LIHTC program amendments will take place in September.
Shortage of Affordable Housing Costs South Carolina $8 Billion a Year
Next City (08/29/19) Brey, Jared
"Shelter poverty" costs South Carolina $8 billion a year, according to a new report from the South Carolina State Housing Finance and Development Authority (SC Housing). A third of renters pay more than they can afford for housing, and a quarter pay more than half of their income toward rent. The state offers only one subsidized unit for every five low-income renters. A typical renter cannot afford a typical two-bedroom apartment in 41 of the state's 46 counties. The report offers several recommendations for addressing affordable housing, including supporting a bill that would create a state tax credit to bolster federal Low-Income Housing Tax Credits. SC Housing also recommends that state legislators consider allowing cities to adopt inclusionary zoning policies. The report is SC Housing's first completed assessment of housing needs in the state since 2002. SC Housing's programs include a program that helps finance low-income housing projects with tax-exempt bonds.
Green Building
To Meet Demand for Green Buildings, Developers Get a Leg Up
New York Times (08/27/19) Gose, Joe
In 2008, Property Assessed Clean Energy (PACE) was created to help finance environmentally sustainable and resilient building improvements. PACE loans have since become popular tools used by developers to build more energy-efficient buildings and to comply with tougher environmental standards. One example can be found in Omaha, Neb., where the $205 million Capitol District project has been developed to revitalize the city's downtown area. The developer for that project used a PACE loan to pay for LED lighting, heat pumps, low-flow water fixtures, and other materials to boost the projects energy and water efficiency. Supporters of PACE loans say they are better than conventional debt because they are usually cheaper, have fixed interest rates, and terms are 20 years to 30 years long. PACE financing can also be considered an assessment on properties. The loans are also paid annually with real estate tax bills and they can transfer to new owners. The loans were not very popular for several years, but the PACE model has been used to finance $660 million worth of sustainable building improvements between 2016 and 2018.
U.S. Green Building Council Report Reveals a 19 Percent Growth in LEED Residential Market
Groundbreak Carolinas (08/07/19) Stanley, Sarah
The U.S. Green Building Council has issued a report on the green residential market, estimating that Leadership in Energy and Environmental Design (LEED)-certified homes have grown 19 percent since 2017 and reached an all-time high, with almost 500,000 single family, multifamily, and affordable housing LEED-certified units worldwide, and more than 400,000 units in the U.S. California is listed as the top state for such residences, where nearly 40,000 certified residential units are present. Texas comes in second place with more than 24,500. LEED-certified homes use 20 to 30 percent less energy than traditional homes overall, with some homeowners reporting as much as 60 percent savings. LEED-certified homes also are engineered to support human health and comfort, by maximizing indoor fresh air and using materials that help reduce exposure to toxins and pollutants associated with asthma, allergies, and other respiratory issues. There presently are more than 78,000 residential units that qualify as affordable housing and are participating in LEED. Construction of green multifamily and single-family homes is expected to increase through 2022.
Association News
Register for the Blended Learning SHCM Online Course
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 for approximately three hours, including instruction and a question-and-answer period for attendees. The webinars take place on consecutive Thursdays, Oct. 17-Nov. 7, with each beginning at 12 p.m. Eastern time.
The course schedule is as follows:
- Oct. 17: Chapter 1, Program Regulations presented by Gwen Volk
- Oct. 24, Chapter 2, Unit Eligibility presented by Dodi Gershen
- Oct. 31, Chapter 3, Applicant Eligibility & Certification presented by Heather Staggs
- Nov. 7, Chapter 4, Monitoring & Compliance presented by Gwen Volk
The cost for the course, including the SHCM exam and SHCM application fee, is $549 for National Apartment Association Education Institute (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. If you have already created an NAA account, sign in by using your ID and password. If this is your first time registering for a course you will need to create an account directly from the NAA website. If you need assistance with the registration process, contact Amy Allen, at AAllen@naahq.org.
Material for the webinars is based on NAHMA’s newly revised Practical Guide to Housing Credit Management workbook. Participants will receive course materials in a PDF format prior to the first webinar sessions. Participants will have 14 business days—until Dec. 3—to sit for the exam upon the conclusion of the webinar series.
NAHMA Drug-Free Kids Calendar on Sale
It may not be pumpkin spice flavored, but it is our favorite fall tradition: the 2020 NAHMA Drug-Free Kids Calendar is now on sale. Be one of the first to own this collector’s item by downloading the order form and sending it in today. The calendar cost is $5.50 each, which is a Department of Housing and Urban Development and U.S. Department of Agriculture allowable project expense.
Purchase calendars before Nov. 8 and you are automatically entered in the lucky draw for prizes including NAHMA meeting registrations, books and gift cards. There is a small shipping and handling fee for each calendar.
The calendars feature outstanding original artwork by children, seniors and adults with special needs living in affordable multifamily housing. The underlying message for the annual calendar contest is always a drug-free theme but the association wanted to open the door for more avenues of expression, so a subtheme is incorporated into the poster contest. The subtheme this year is Sharing Our Stories: Learning from Others, Young and Old.
To download the order form, click on the Web Link provided. To see the national winners, visit
https://www.nahma.org/awards-contests/calendar-contest/current-winners
/.
Don’t Forget to Work on Your COQ Award Application
Plan to enter the NAHMA 2019 Communities of Quality (COQ) Awards competition. The submission deadline to NAHMA is Nov. 7. 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.
The COQ Awards recognize outstanding property management companies providing the highest quality of safe, affordable multifamily rental housing in communities across the country.
Judging is based on a point system that takes into account your National COQ Recognition Program application and the required COQ Awards application essay. All affordable multifamily properties may compete—it doesn’t matter how big or small your community may be, where it is located, or which affordable rental program (HUD, RD or LIHTC) it participates in. To download a copy of the COQ Awards brochure, click on the Web Link below.
NAHMA Releases 2019 Affordable 100 List
The National Affordable Housing Management Association (NAHMA) announces its 2019 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 two 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) and the National Apartment Association Education Institute (NAAEI).
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
NAA Maximize
September 23-25, 2019
More
NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 27-29, 2019
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