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CDC Issues a Nationwide Eviction Moratorium to Prevent the Spread of COVID-19


On Sept. 4, the Centers for Disease Control (CDC) issued an order banning evictions for certain renters through Dec. 31, 2020. The CDC is issuing the eviction moratorium to protect public health and prevent further spread of COVID-19. The order is separate and independent from the expired CARES Act eviction moratorium. To be eligible for eviction protections under the order, residents must sign a declaration form and meet the requirements outlined in the order, which are also described in the declaration form. According to a clarifying memo send days later by the Department of Housing and Urban Development (HUD), multifamily property owners and management agents are encouraged to inform residents of the eviction protections under this order and the required declaration form. In particular, owners of HUD-assisted and FHA-insured properties who are notifying residents that their tenancy will be terminated for nonpayment of rent or fees while this order remains in force should inform residents of the protections available to them under this order and should document such notifications in the tenant file. A resident cannot be required to complete the declaration but will not have the CDC eviction protection without it. The order does not relieve a resident’s obligation to pay rent. Residents can still be evicted for reasons other than nonpayment of rent (e.g., criminal activity). HUD’s guidance on evictions at HUD-insured or HUD-held mortgages while under forbearance remains in effect and can be found in Housing Notice H 2020-07, by clicking the Web Link below. The order is available at https://www.federalregister.gov/d/2020-19654. The declaration form is available at
https://www.cdc.gov/coronavirus/2019-ncov/covid-eviction-declaration.h
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Industry Trends


"LIHTC Market Weathers Changes Wrought by COVID-19"
"LIHTC Equity Market Stabilizing Four Months into COVID-19 Pandemic"
"The Surprising Market Resilience of Affordable Housing"

HUD-Related Activity


"Understanding Cash Controls for HUD-Assisted Multifamily Properties"

State and Local Activities


"Task Force Has Ideas for More Affordable Housing"

Management and Compliance


"End-of-Year Tax Planning for LIHTC Properties"

Green Building


"67 Percent of Low-Income Households Face High Energy Burden: ACEEE"

Association News


NAHMA’s October Meeting Moves Online
Pre-order Your Drug-Free Calendar
Don’t Forget Your COQ Awards Application
NAHMA Releases 2020 Affordable 100 List
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Industry Trends


LIHTC Market Weathers Changes Wrought by COVID-19
Affordable Housing Finance (08/10/20) Kimura, Donna

As the COVID-19 pandemic moves into the second half of 2020, developers need to be more conservative in planning their deals, say Low-Income Housing Tax Credit (LIHTC) syndicators. Ryan Sfreddo, president of Red Stone Equity Partners, advises, "Make your deals as resilient as possible by structuring them with healthy reserves, additional cushion built into the construction and conversion timelines, and enlist a best-in-class general contractor with longstanding subcontractor relationships." Matt Reilein, president and CEO of National Equity Fund, says, "Documentation should include COVID-related plans for tenant-in-place rehabs." Others syndicators are being conservative with potential area median income (AMI) changes. For instance, the Ohio Capital Corporation for Housing has taken "a closer look at AMI trending over the 15-year compliance period and sensitized income over various scenarios to ensure adequate rental income through a sustained economic downturn," says Peg Moertl, president and CEO. The average price paid per dollar of credit in the second quarter was 89 cents, down from 92.3 cents the year before. Yields to investors averaged about 5% in the recent second quarter, up from 4.8 percent reported during the same time in 2019, according to a July survey of 23 syndicators by Affordable Housing Finance. About 73 percent of the syndicators surveyed anticipate that LIHTC prices will decrease in the second half of the year while the remaining 27 percent think prices will remain steady.
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LIHTC Equity Market Stabilizing Four Months into COVID-19 Pandemic
Novogradac (07/28/2020) Kincer, H. Blair

The Low-Income Housing Tax Credit (LIHTC) continues to be a resilient incentive four months into the pandemic. Tom Pereira, senior vice president of structured finance at Boston Capital, says, "On average, pricing moved downward about 2 to 4 cents on a per credit basis." He adds that he see 5 percent yields for Community Reinvestment Act investors and 6-plus percent yields for economic investors. At present, however, "Yields and prices are not high enough to get new investors coming to the market." Vihar Sheth, director of business development for equity at U.S. Bancorp Community Development Corporation, observes, "The LIHTC has bipartisan support and continues to be the favorable way to finance affordable housing. With a Democrat or Republican president, at some point the corporate tax rate will have to go back up." Regarding rent collections, Sheth asserts, "No projects in our portfolio are at risk of default but we are starting to see some deterioration, and there are some pockets with double digit drops in rent collections." Anil Advani, executive vice president of originations and finance at WNC & Associates, notes, "Things are moving forward with both [of our] property closings and fund closings occurring." Advani is also seeing yields increase by 50 basis points. Novogradac data indicates that the price per credit (weighted average) was 94 cents in March and 93 cents in April and May, suggesting that the LIHTC equity market is stabilizing.
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The Surprising Market Resilience of Affordable Housing
Apartment Finance Today (09/14/20)

CBRE Affordable Housing’s executive vice president Tim Flint has directed more than 600 Low-Income Housing Tax Credit and Department of Housing and Urban Development transactions totaling more than $6 billion. He says, "Deals are getting done. True, it’s not business as usual, given the travel and property inspection issues, but even in April we were putting properties under contract and closing them in June. We’re not 100 percent back, but affordable housing is in better shape than other commercial property types right now." He cites several reasons for this encouraging scenario: "I think investors like what they see with affordable housing. The demand for clean, affordable housing is high and isn’t going away. There are no immediate tax policy threats. Plus, the multifamily investor is so much more sophisticated today than they were, say 15 years ago. Their investment objectives are clear and understood." Regarding the upcoming election, Flint says, "The affordable housing market fundamentals are strong, so the election isn't being seen as a major disruption." He also notes, "The affordable housing market’s certain high demand incentivizes public and private leaders to come up with smart, creative financing solutions. The long-term prospects for the industry have never been better."
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HUD-Related Activity


Understanding Cash Controls for HUD-Assisted Multifamily Properties
Apartment Finance Today (09/10/20) Price, Richard

The line between real estate and government contracting is not as clear as it should be, asserts Richard Price, a partner in Nixon Peabody’s Affordable Housing & Real Estate group. For instance, he says it can be challenging to find guidance on what a non-procurement government contractor is, with the exception of government-wide debarment rules. Applying for a loan or signing a management contract is typically not a form of procurement, but owners and management companies are signing contracts with the federal government, so they are viewed as a non-procurement government contractor. Meanwhile, some courts have ruled that Department of Housing and Urban Development (HUD) handbooks and circulars are to be followed and others say they are not binding. As a result, it is better to submit an audited financial statement with a notation and on time than to wait until days, weeks, months after the due date to resolve any notations before filing. A particularly important HUD requirement is timely and accurate submission of annual audited financial statements for all borrowers of HUD multifamily-insured loans. This is because HUD may impose significant civil penalties for failure to furnish audited financial statements within the 90-day period after the end of the borrower's fiscal year. Penalties can range up to $51,222 per violation for multifamily owners. Moreover, HUD interpretations call for the application of surplus cash standards, whether or not audits are required of a specific owner of a Section 8 project-based rental assistance (PBRA) contract.
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State and Local Activities


Task Force Has Ideas for More Affordable Housing
Chicago Sun-Times (09/14/20) Roeder, David

A report from Chicago’s Inclusionary Housing Task Force, appointed last year by Mayor Lori Lightfoot, noted that developers can currently build or fund more affordable units if they obtain zoning authority to increase the size of their projects. The report suggested that some builders should be able to access such a "bonus" system even if they do not require a zoning change. It also estimated that the city has "an 'affordable housing gap' of nearly 120,000 homes" based on research by the Institute for Housing Studies at DePaul University. The report also estimated that since 2004, what the city now calls its Affordable Requirements Ordinance (ARO) funded construction of approximately 1,500 units for households with low or moderate incomes. Developers building market-rate units pay into the program, while tax credits generate more than a 1,000 units per year on average, the report said. Marisa Novara, the city's housing commissioner, says the Low Income Housing Trust Fund, backed by the same developer fees, provides rent subsidies for more than 2,700 low-income households. Subsidized units built under the ARO must be affordable to households earning no more than 60 percent of the area's median income, currently $54,600 for a family of four. Some members of the task force said the income limit should be lowered so only the neediest people qualify, but the report also noted objections from developers who said doing so could make some residential projects too much of a financial risk. The task force comprises members from private development, academia, and nonprofits.
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Management and Compliance


End-of-Year Tax Planning for LIHTC Properties
Novogradac (08/04/2020) Lurya, Justin Chubb

As 2021 approaches, owners of Low-Income Housing Tax Credit (LIHTC) properties need to consider tax planning strategies. An eligible partnership may file its amended tax return and provide amended K-1s to its partners before Sept. 30, 2020. Returns may be amended to account for changes brought about by the Coronavirus Aid, Relief and Economic Security (CARES) Act, and any other applicable tax attributes. This creates a small window of opportunity for LIHTC partnerships that were unable to claim credits in 2018 or 2019 because Forms 8609 were not issued by the tax return due date. LIHTC partnerships that are unable to file amended returns by Sept. 30, 2020, may need to file an Administrative Adjustment Request (AAR) and provide Form 8986 to its partners. Partners receiving Form 8986 must then account for the adjustment on their tax return filed for the year the Form 8986 is issued. Under the CARES Act, business interest deduction limitation has been temporarily changed, and as a result, LIHTC partnerships that elected to be treated as a real property trade or business (RPTOB) will need to reexamine this decision. For 2020, the amount of business interest expense that partnerships can deduct is increased to 50 percent of adjusted taxable income (ATI). Additionally, taxpayers can elect to use their 2019 ATI to calculate their 2020 limitation.
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Green Building


67 Percent of Low-Income Households Face High Energy Burden: ACEEE
Smart Cities Dive (09/10/20) Pyzyk, Katie

U.S. households spend an average of 3 percent of their income on energy bills. However, about 25 percent of American households put more than 6 percent of their income toward energy bills, according to a new report from The American Council for an Energy-Efficient Economy (ACEEE). Low-income households experience a disproportionately higher energy burden, with 67 percent (25.8 million low-income households) putting a higher percentage of their income toward energy bills. ACEEE found a disproportionate energy burden across racial lines. In comparison to White households, Native American households spend 45 percent more of their income on energy costs, Black households spend 43 percent more and Hispanic households spend 20 percent more. Renters also have about a 13 percent higher energy burden than homeowners. ACEEE's policy recommendations include ramping up investment in weatherization and energy efficiency programs. For the study, ACEEE analyzed data from 25 U.S. metro areas, gathered from the U.S. Census Bureau's most recent American Housing Survey in 2017.
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Association News


NAHMA’s October Meeting Moves Online

Due to the ongoing COVID-19 pandemic, the National Affordable Housing Management Association (NAHMA) will present a virtual meeting during the week of Oct. 26-30, instead of its traditional in-person meeting in Washington, DC. The agenda and list of invited and confirmed speakers are available on the NAHMA Meetings webpage, which can be viewed by clicking on the Web Link below. Registration for the meeting will be available next week.
Additionally, the NAHMA Educational Foundation is hosting a Virtual Gala on Oct. 26 to replace its annual in-person event. Scholarships will be an even greater need this year and your support will help provide residents with the opportunity to continue their education. Please consider donating by visiting NAHMAedu.givesmart.com.
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Pre-order Your Drug-Free Calendar

It may not be pumpkin spice flavored, but it is our favorite fall tradition: the 2021 NAHMA Drug-Free Kids Calendar is available for pre-order. 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. 13 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 My Voice Will Be Heard: Speaking the Language of Love.
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
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Don’t Forget Your COQ Awards Application

Are you a nationally recognized Community of Quality? Then enter the NAHMA 2020 Communities of Quality (COQ) Awards competition? The submission deadline to NAHMA is Nov. 5.
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 deadline for submitting an application to a local AHMA for consideration in the national program is Sept. 3.
The Communities of Quality (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.
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NAHMA Releases 2020 Affordable 100 List

The National Affordable Housing Management Association (NAHMA) announces its 2020 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 issue of NAHMA News. 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.
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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.
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Upcoming Events

NAHMA Biannual Top Issues in Affordable Housing Virtual Fall Conference
October 26-30, 2020
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NAA Apartmentalize
November 4-6, 2020
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September 2020