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Register for the Multifamily Housing Industry Workshop


Owners with active transactions are encouraged to join USDA Rural Development staff for a workshop presentation, Addressing Funding Gaps in Section 515 and FLH (514/516) Transactions, describing how to address cost overruns on Wednesday, April 6, at 1 p.m. Eastern time. Participants should preregister for the session. A meeting confirmation notice will be emailed to all registrants with valid email addresses. To register, click the Web Link provided.
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Industry Trends


"Steady LIHTC Pricing Expected for First Half of 2022"
"Blackstone's U.S. CRE Push Suggests the Sector's Strength Amid Uncertainty"

Congress


"Congress Passes $1.5 Trillion FY 2022 Omnibus Spending Bill, Including $65.7 Billion in Gross Appropriations for HUD"

HUD-Related Activity


"FHA Lifts Temporary COVID-19 Underwriting Mitigants for Multifamily Deals"

State and Local Activities


"Here's One Way States Are Boosting Affordable Housing"
"Tucson Moves to Subsidize Affordable Housing Built by Private Developers"
"State of Nevada Makes Historic Allocation of Tax-Exempt Bond Authority for Affordable Housing"

Association News


Registration Open for NAA’s Apartmentalize Conference
NAAEI Offers Tax Credit Property Management Online Training
Q4 2021 Apartment Jobs Snapshot
Scholarship Application Available
Become a Specialist in Housing Credit Management® (SHCM®) Company!
Upcoming Events


Industry Trends


Steady LIHTC Pricing Expected for First Half of 2022
Affordable Housing Finance (03/07/22) Kimura, Donna

Low-Income Housing Tax Credit (LIHTC) prices will hold steady for the first half of 2022, predict a majority of syndicators. Approximately 79 percent of the syndicators surveyed agree that prices to developers will hold firm in the first half of the year, while 16 percent say prices will decrease. The market should remain pretty stable this year, says Scott Hoekman, president of Enterprise Housing Credit Investments. However, he cites two events that could affect pricing—interest rate increases and the passage of the housing credit provisions in the Build Back Better (BBB) legislation. “Both of these factors would likely reduce price per credit to developers—investor yield requirements tend to rise with interest rates, and a sudden influx of tax credits via BBB would likely result in some supply/demand imbalance in the short run,” Hoekman says. If the legislation included an increase in the corporate tax rate, “that would have helped because investor yields would increase even with no change in price to the deal, helping to drive more capital into the market to take up the increased tax credits,” he adds. “If the BBB bill passes with the current LIHTC components intact, it will lead to a historic increase in production for the industry,” says Tony Bertoldi, co-president of CREA. “As the bill comes into effect, we anticipate LIHTC pricing to fall as the supply of tax credits increases. This should bolster yields, increasing demand from existing economic investors and potentially drawing new investors into the market."
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Blackstone's U.S. CRE Push Suggests the Sector's Strength Amid Uncertainty
WealthManagement.com (03/09/22) Martin, Tom

Private equity firm Blackstone is among the many firms focusing on the United States' commercial real estate sector. The company has made several real estate acquisitions with a nearly $6 billion deal, and also unveiled a new portfolio company specializing in affordable housing. In late February, Blackstone announced a new project called April Housing, focused on supporting affordable housing in the United States by facilitating capital and managing a portfolio of 90,000 housing units from Blackstone Real Estate Income Trust. Blackstone says the new company will invest more than $500 million in its portfolio. Kathleen McCarthy, global co-head of Blackstone Real Estate, emphasized that the initiative seeks to widen the nation's supply of affordable housing, with nearly all of April Housing's initial holdings subject to rent control under the federal government's Low-Income Housing Tax Credit program. Properties currently held by April Housing are in Fort Lauderdale, Fla.; Los Angeles; Miami; Austin; Dallas; Houston; Denver; and San Francisco. Blackstone's new portfolio company will be led by CEO Alice Carr, previously head of community development banking at JPMorgan Chase and a leader with the Diversity, Equity and Inclusion (DEI) Council for the commercial real estate business. Asim Hamid, senior managing director at Blackstone Real Estate, says one of the company's objective is to invest in "top-quality multifamily communities in growth markets across the U.S."
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Congress


Congress Passes $1.5 Trillion FY 2022 Omnibus Spending Bill, Including $65.7 Billion in Gross Appropriations for HUD
Novogradac (03/09/2022)

Congress passed a $1.5 trillion omnibus fiscal year (FY) 2022 spending bill, providing discretionary funding for all federal agencies, including the U.S. Department of Housing and Urban Development (HUD). The FY 2022 omnibus provides $730 billion in non-defense funding, a $46 billion increase from FY 2021. For HUD spending, the FY 2022 omnibus provides gross appropriations of $65.7 billion, a $5.34 billion (8.9 percent) increase from FY 2021. It is $3 billion (4.4 percent) less than the FY 2022 request, $2.74 billion (4.0 percent) less than the FY 2022 House HUD bill and $304 million (0.5 percent) more than the Senate draft FY 2021 HUD bill. In general, the bill’s funding levels represents a compromise between the higher amounts of the administration request and House bill and the lower amounts of the Senate bill, providing most HUD programs with increases from last year. Unlike the FY 2021 omnibus, the FY 2022 bill does not include a tax title, so there are no provisions to extend the 12.5 percent increase in Low-Income Housing Tax Credit allocations, nor to extend the renewable energy production tax credit (PTC), nor the Internal Revenue Code Section 45L new energy-efficient home tax credit, which were among the roughly three dozen tax provisions that expired at the end of 2021.
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HUD-Related Activity


FHA Lifts Temporary COVID-19 Underwriting Mitigants for Multifamily Deals
Affordable Housing Finance (02/15/22)

The Federal Housing Administration (FHA) has removed temporary COVID-19 underwriting mitigants for multifamily transactions insured under Section 223(f) of the National Housing Act. The temporary requirements calling for nine months of debt service reserves, 250 percent repair escrows, and limits on cash-out refinance transactions were originally put in place in April 2020 to counterbalance potential financial effects resulting from the COVID-19 pandemic. In the almost two years following implementation of the policies, the FHA multifamily portfolio has proven to be consistently resilient to significant COVID-19 impacts, remaining at a less than 1 percent default rate. “Through actions taken under the Biden-Harris administration to help the nation recover from the pandemic, including the historic American Rescue Plan, mortgages in FHA’s multifamily insurance portfolio experienced fewer challenges than expected,” said Lopa Kolluri, principal deputy assistant secretary for the Department of Housing and Urban Development’s Office of Housing and FHA. “Because of this, we are in a position to unleash multifamily development capital by lifting these underwriting safeguards.” The change allows lenders to return to using standard Multifamily Accelerated Processing (MAP) Guide policies going forward, which require fewer capital reserves to be held for debt service, a lower percentage of capital to be held in repair escrows, and more flexible requirements for the treatment of cash-out refinance transactions. Officials plan to make updates to the MAP Guide annually rather than every three or four years.
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State and Local Activities


Here's One Way States Are Boosting Affordable Housing
Pew Charitable Trusts (03/02/22) Hernández, Kristian

The lack of affordable housing around the country is prompting several states to consider new legislation that would create tax breaks for low-income housing developers. The state programs are designed to supplement the federal Low-Income Housing Tax Credit program (LIHTC). Nationwide, there is a shortage of approximately seven million rental homes that are affordable to the lowest income households, according to an annual report released in October by the Public and Affordable Housing Research Corporation and the National Low Income Housing Coalition. By 2031 that number could be closer to 8 million, as rent restrictions expire on some 745,000 homes where, because of federal programs, tenants pay less than market rent. Arizona created its own program in the past year, and legislation in Mississippi came up just short. The other 22 states with LIHTC programs are Arkansas, California, Colorado, Connecticut, Georgia, Hawaii, Illinois, Maine, Massachusetts, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, South Carolina, Utah, Vermont, Virginia, and Wisconsin. Among those states, Colorado has been one of the most successful in leveraging tax breaks for low-income housing development.
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Tucson Moves to Subsidize Affordable Housing Built by Private Developers
Tucson.com (03/13/22) Ludden, Nicole

The city of Tucson, Ariz., is proposing to waive the impact fees it charges private companies that construct affordable housing units in the city. Terry Galligan, the deputy director of Tucson’s Housing and Community Development Department, said, "We don’t want to leave any money on the table that could help bring more affordable housing to Tucson." At its March 9 meeting, the mayor and council directed city staff to proceed with the same incentive for private entities and plans to make the change official at its March 22 meeting. Under state law, if a municipality waives impact fees for development, it must reimburse the amount waived. The city uses general fund dollars and its Highway User Revenue Fund to pay for the impact fees it cancels. In essence, instead of developers paying the fee, city taxpayer dollars will. Municipal staff said the impact fee subsidy for private companies will make Tucson more likely to receive projects with funding from the Low-Income Housing Tax Credit (LIHTC) federal program. Projects with waived impact fees earn more points on applications to qualify for the credit. In 2021, Tucson had two housing developments that received the LIHTC grant, and Phoenix had seven projects utilizing the funds, according to data from the Arizona Department of Housing, which issues the credits. City Manager Michael Ortega said expanding the eligibility may come up on the regular agenda for March 22 to make the April deadline for the federal tax-credit program's applications.
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State of Nevada Makes Historic Allocation of Tax-Exempt Bond Authority for Affordable Housing
Nevada Department of Business and Industry (02/16/22)

The Nevada Housing Division (NHD) on Feb. 16 announced that $300.7 million, or 87 percent of Nevada's 2021 tax-exempt bonding authority, has been earmarked for development of affordable housing projects throughout the state. Fourteen affordable housing projects currently under construction will bring 2,898 affordable housing units online by early 2024. These developments located in Reno, Las Vegas, and North Las Vegas contain a mix of senior and family complexes, and new construction and rehabilitated units. Nine of these developments, totaling 2,153 units, are projected for completion in 2022 or early 2023. The 2021 bonding authority allocation is the highest amount earmarked for state-led affordable housing development since the inception of the program. Officials say it will give the division the ability to approve even more qualified projects in order to continue to grow the state's affordable housing stock. Tax-exempt bond authority allocated to NHD is used to incentivize private developers to increase the number of affordable housing units built or existing units renovated by providing a mechanism for financing projects with a lower cost of capital than conventional financing can offer. Along with developer tax credits offered through the Low-Income Housing Tax Credit program, these developments will remain affordable, below-market residential rentals for a minimum of 30 years.
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Association News


Registration Open for NAA’s Apartmentalize Conference

Experience the unstoppable energy of Apartmentalize, where the apartment industry’s thought leaders, trendsetters, and innovators come together to share ideas and solutions. Apartmentalize features a robust program with various educational sessions, an exposition hall, and many opportunities to network. This year’s conference will be held in San Diego, Calif., from June 22-24. To register, click the Web Link provided.
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NAAEI Offers Tax Credit Property Management Online Training

The National Apartment Association Education Institute offers a 12-hour online course to prepare students for the SHCM certification exam. The training topics include program regulations, unit eligibility, applicant eligibility and certification, documentation, recordkeeping, compliance reporting and monitoring. This course satisfies the education requirements to apply for the SHCM credential and includes the exam study guide. For more information, click on the Web Link provided below.
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Q4 2021 Apartment Jobs Snapshot

NAAEI brings you its 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, the time required to fill a position and the top skills found in job postings. For more information, click on the Web Link.
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Scholarship Application Available

The NAHMA Educational Foundation kicked off the scholarship season by releasing the 2021 scholarship application. This will be the 16th consecutive year that the foundation will be making scholarships available to worthy student residents.
In 2021, the foundation awarded 87 scholarships worth a total of $304,500.
Applicants can access the application by going to https://nahma.communityforce.com or visiting www.nahma.org and clicking on Educational Foundation under the About Us tab. The application is digital and must be filed online. The deadline for completed applications is May 12, at 10 p.m. Eastern time.
Eligibility for the program requires that an applicant be a resident in good standing at an AHMA- or NAHMA-affiliated apartment community and be either a high school senior with a minimum GPA of 2.5; or a high school equivalency diploma holder or matriculated college student with a minimum GPA of 2.3 at an accredited community college, college, university, or trade/technical school. Applications from students in graduate-level programs are not accepted.
For more information about the foundation, click on the Web Link provided.
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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 becoming a SHCM Company, click on the Web Link below.
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Upcoming Events

NAA Apartmentalize
June 22-24
https://apartmentalize.naahq.org/

NAHMA Biannual Top Issues in Affordable Housing Fall Conference
October 26-28
https://www.nahma.org/meetings/

NAA Assembly of Delegates
November 15-17
https://www.naahq.org/meetings-events/upcoming-meetings
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March 2022