The Virginia Housing Development Authority (VHDA) identified public housing transformation as one of the its highest priorities and is considering the following options:

  1. For 2020 and forward, suspend, in whole or in part, the Innovation competition, which is a pre-allocation of up to 12.5 percent of the following year’s credits, approximately $3 million in annual credits. While the competition was generally well received in 2019 and some developers may already be planning to submit Innovation applications in 2020, the Board may instead choose to prioritize public housing transformation to serve very low-income tenant populations and fully leverage this unique award of Choice Neighborhoods Initiative (CNI) grant funds. In the absence of the Innovation competition, VHDA staff would continue to look for ways to incentivize innovation, through possible future QAP changes, grants or favorable loan terms for innovative applications. The Board may also elect to maintain the Innovation competition but in a more limited scope, such as limiting the award to a single development or in a reduced aggregate amount of awards.

 

  1. The Board may elect to exercise its discretion to fund local housing authority (LHA) pool deals that are unfunded in the LHA pool. Under the QAP, the Board may exercise reasonable discretion if it determines such funding to be in the best interest of the program and, presumably, the Board would only do so if the LHA application is (i) competitive with other funded deals and not simply meeting required threshold scoring, and (ii) related to a CNI Grant or public housing transformation (RAD or similar program). The net result of funding these additional deals would be a pre-allocation of 2021 calendar year credits, and such pre-allocation would come “off the top” of the 2021 aggregate credit amount. The 2020 LHA Pool is expected to be approximately $2.4 million. When combined with the $3 million referenced in Option 1 above, the total is up to approximately $5.4 million. Staff currently expects this amount to be sufficient to meet expected 2020 demands in the LHA Pool. This would not be expected to materially disadvantage any particular credit pool in 2021.

 

  1. VHDA expects to receive the cancellation and return of a previous reservation of tax credits in the amount of approximately $600,000 of annual credits from the local housing authority pool (the “Returned Credits”). The Authority’s standard practice with respect to cancelled reservations has been to add the credits to the total credits available for the following year prior to determining individual pool sizes, rather than designating the credits for the particular pool from which they were previously awarded. However, given the anticipated shortfall in the LHA Pool in 2020, the Board may choose to designate the Returned Credits directly to the 2020 LHA Pool.

Please send written comments on the three options described above by 5:00 pm ET on December 9 to JD Bondurant at TaxCreditApps@VHDA.com.