Qualified Allocation Plans Category Archives

Minnesota Schedules 2020 Consolidated Request for Proposals (RFP)/2021 Housing Tax Credits Round 1 Kickoff Event Feb. 13

In preparation for the 2020 RFP/2021 HTC Round 1, Minnesota Housing will host an RFP and Technical Assistance kickoff event on Thursday, February 13, 2020 from 10:00 a.m. to 12:00 p.m. at Minnesota Housing. Our kickoff event will include the following information:

  • RFP Introduction: Overview of the RFP process and timeline; Minnesota Housing’s strategic priorities and selection standards; and tips for application submission, including dual application submission.
  • Funding and Requirements: Information on applying for housing tax credits, deferred loans and amortizing loans available through the RFP, including eligible uses for Housing Infrastructure Bonds.
  • Multifamily Requirements and Resources: Learn what helps make an application competitive and key requirements specific to Minnesota Housing’s Underwriting and Design standards.

Small group technical assistance will be available in the afternoon on key topics where you can discuss project concepts and project details, in addition to program guidelines with Minnesota Housing staff.

A go-to webinar option will be available for the RFP and Technical Assistance Kickoff morning presentation. More information and registration will be available in January.

Illinois Schedules Listening Session On Bond Program Changes (December 17)

On December 17, 2019 from 10:00 a.m.- 12:00 p.m., the Illinois Housing Development Authority (Authority) will hold its listening session regarding the proposed guidance on projects with rental assistance contracts requesting tax-exempt bonds and 4% Low-Income Housing Tax Credits in the Authority’s offices located at 111 E. Wacker Drive, Suite 1000. As a reminder, guests will be asked to register in the 111 E. Wacker Drive lobby as part of the building’s standard security protocol. Pre-registration is strongly encouraged.

If you have any questions related to this notice or wish to pre-register for the feedback session, please send an e-mail to Multifamilyfin@ihda.org. The Authority kindly requests that registration requests be sent to Multifamilyfin@ihda.org by or before 5:00 p.m. on December 13, 2019. In addition, written comments may be sent to the Authority by or before 5:00 p.m. on December 13, 2019 via Multifamilyfin@ihda.org

Maryland Posts 2020 Draft QAP

The Maryland Department of Housing and Community Development (DHCD) released the draft of the 2020 Qualified Allocation Plan (QAP) and Multifamily Rental Financing Guide (Guide) for public comment.  Draft comments are due by December 15, 2019 and can be submitted to dhcd.qap@maryland.gov. A summary of proposed revisions is available here. Please note the list only includes the major proposed revisions, not all revisions.

2020 QAP and Guide 1st Draft Document​s

​​​​​Regional meetings were held to solicit comments and discussion.

California Issues New Guidance on Manager Units

On December 5 the California Tax Credit Allocation Committee issued new guidance relating to on site manager units at LIHTC Properties. California law 25 CCR § 42 requires an onsite manager, maintenance, or other responsible person for rental housing of 16 units or more. The Internal Revenue Service (IRS) guidance for manager or exempt units permits the cost of the unit to be included in eligible basis if the unit is reasonably required for the operation of the residential rental housing (IRS Revenue Ruling 92-61); however, the unit is excluded from the applicable fraction calculation. The IRS has further clarified that the person occupying the unit must be employed at the property where they reside. IRS Revenue Ruling 92-61 pertains to a full-time resident manager. Tenant keyholders, service coordinators, regional managers, and any staff that “float” from one project to another are all ineligible to reside in a manager unit.

California Tax Credit Allocation Committee (TCAC) staff receives applications that propose a manager unit to be occupied by an income-restricted tenant. Staff has become aware that in some cases, owners may be evicting these tenants upon employment termination, and that the eviction requirement is written into the employment contract. TCAC has received guidance from the IRS indicating this practice is not in compliance with federal LIHTC program rules. Restricted unit occupancy cannot be contingent upon the tenant’s employment by the project owner. In addition, by designating the unit specifically for occupancy by a manager, the unit no longer meets the general public use rule. If a unit is designated for a manager and is exempt from the applicable fraction, it is not a restricted low-income unit. As a result, a unit cannot be both an exempt manager unit and a restricted low-income unit.

If a TCAC applicant or project owner proposes to utiltize a low-income unit to meet California and TCAC manager unit requirements, the following applies: (1) the unit is considered a low-income restricted unit and must comply with all requirements associated with low-income restricted units; (2) the unit is included in the applicable fraction; and (3) the tenant cannot be evicted upon employment termination. This is applicable to all existing projects as well as current and future applications. If employment is terminated, the project owner is responsible for continuing to meet California and TCAC onsite manager unit requirements. Any application proposing to utiltize a low-income unit to meet California and TCAC manager unit requirements must include a description of how the project will meet those requirements if employment is terminated. An alternative option for an applicant that asserts the need for every unit to be income-restricted is for the project to provide an equivalent number of desk or security staff capable of responding to emergencies for the hours when property management staff is not working (TCAC Regulation § 10325(f)(7)(J)). These desk or security staff cannot be tenants of low-income restricted units.

New Hampshire Schedules Public Hearing on Draft QAP

New Hampshire Housing Finance Authority (NHHFA) will hold a formal public hearing on December 20, 2019 at 10:00 AM. The hearing will be held at our office located at 32 Constitution Drive, Bedford, NH. Upon arrival, please enter at the East Entrance to attend the hearing.

The purpose of the hearing is to receive comments on the draft 2021-2022 Qualified Allocation Plan (QAP) for the Low Income Housing Tax Credit program (LIHTC). The QAP defines the process by which NHHFA will allocate LIHTCs to eligible affordable rental housing developments throughout the state of New Hampshire.

The draft 2021-2022 QAP will be available on NHHFA’s website prior to the hearing. You can also obtain a copy by mail by contacting Jessica McCarthy, New Hampshire Housing, PO Box 5087, Manchester, NH 03108-5087, by phone at 603-310-9272, or via email at jmccarthy@nhhfa.org. Written comments in lieu of participation in the public hearing are welcome and may be submitted by mail to Jessica McCarthy at the address noted above or by email to QAP@nhhfa.org.

Illlinois Proposes Changes to TEB Program; Seeks Comments

Over the past few years, the Illinois Housing Development Authority (Authority) has seen an increase in applications seeking to use tax-exempt bonds (TEBs) and 4% Low-Income Housing Tax Credits (LIHTC) in connection with the acquisition and rehabilitation of developments that are subsidized by Housing Assistance Payment (HAP) contracts. To clarify information in the 2020-2021 Qualified Allocation Plan, the Authority plans to issue guidance specifically related to the review and underwriting of such applications. The Authority intends to publish this guidance on its website on January 1, 2020 and will refer to it in connection with the assessment of any PPA request currently under review at the Authority, regardless of the date the pending PPA request was submitted. Applicants with an approved PPA for a proposed transaction that (i) has not been presented to the IHDA board or (ii) has been presented to the IHDA board, but has not yet closed, may not be subject to each parameter referred to in the guidance. The Authority will assess transactions with approved PPA’s on a case-by-case basis and apply elements of the guidance in its sole, but reasonable discretion.

Public Comment:

Prior to the January 1, 2020 release of the guidance, the Authority is inviting members of the public to provide comments to the pending guidance in writing. Written comments may be sent to the Authority by or before 5:00 p.m. on December 13, 2019 via Multifamilyfin@ihda.org. In addition, a listening session regarding the proposed guidance will be held the week of December 16th in the Authority’s offices located at 111 E Wacker Drive, Suite 1000. The exact date and time will be communicated in a follow-up notification. Guests will be asked to register in the 111 E. Wacker Drive lobby as part of the building’s standard security protocol. Pre-registration is strongly encouraged. If you have any questions related to this notice or wish to pre-register for the feedback session, please send an e-mail to Multifamilyfin@ihda.org. The Authority kindly requests that registration requests be sent to Multifamilyfin@ihda.org by or before 5:00 p.m. on December 11, 2019.

As a reminder:

The 2020 and 2021 Qualified Allocation Plan is now available in the  Developer Resource Center  section of the IHDA website. Preliminary Project Assessments (PPA) and Low-Income Housing Tax Credit (LIHTC) applications must be submitted via the Multifamily Portal at https://mfportal.ihda.org. To better serve our environment, IHDA no longer accepts paper applications. In order to gain access to the Multifamily Portal, please submit a MF Portal Account Request Form from the IHDA website or you may find the form at https://ppa.ihda.org. If you require assistance with the Multifamily Portal, please contact mfportalhelp@ihda.org.

 

GUIDANCE ON PROJECTS WITH RENTAL ASSISTANCE CONTRACTS REQUESTING TAX-EXEMPT BONDS AND 4% LOW-INCOME HOUSING TAX CREDITS

Please note the following with respect to applications seeking to use tax-exempt bonds (TEBs) and 4% Low-Income Housing Tax Credits (LIHTC) in connection with the acquisition and rehabilitation of developments that are subsidized by Housing Assistance Payment (HAP) contracts.

Preliminary Project Assessments (PPA)

The documentation listed below is required as part of the Preliminary Project Assessment (PPA) review. If the documentation below is not provided to the Authority, or a PPA is otherwise incomplete, the Authority reserves the right to forgo completing its review of the application until the information is made available.

1)      Prior three years of audited property financials.

2)      Current year-to-date property financials.

3)      Current HAP contract with information on HAP renewal options and anticipated rents.

4)      Purchase contract.

5)      Current Physical Needs Assessment (PNA) using the Authority’s Standards for Property Needs Assessments.

6)      Projected replacement reserves trended as required in the QAP.

7)      Current appraisal using the Authority’s Appraisal Guidelines.

(a) If an appraisal is unavailable, an estimated valuation will be determined by the Authority using the lesser of current market rents or HAP rents and a cap rate obtained from CoStar. Adjustments will be made later once an appraisal is available.

(b) Deductions to the value will be made for immediate needs and deferred maintenance as identified in the PNA.

(c) LIHTC acquisition basis will be limited to appraised value less any immediate needs and deferred maintenance.

Please Note:

Any plan and cost reviews and draw inspection reports engaged by transaction stakeholders will be required to be shared with the Authority prior to closing and, if funded, throughout construction. In the event the transaction is ultimately presented to the IHDA Board, Authority staff will provide the Members of the Authority (IHDA Board) with a detailed disclosure of all fees, sources and uses, cash-out/equity generated, related party interests, date of last syndication (if applicable), and any identity of interests. The Authority reserves the right to order third-party reports directly and/or to provide the applicant with a qualified list of procured vendors.

 

GUIDANCE ON PROJECTS WITH RENTAL ASSISTANCE CONTRACTS REQUESTING TAX-EXEMPT BONDS AND 4% LOW-INCOME HOUSING TAX CREDITS

Please note the following with respect to the underwriting of applications seeking to use tax-exempt bonds (TEBs) and 4% Low-Income Housing Tax Credits (LIHTC) in connection with the acquisition and rehabilitation of developments that are subsidized by Housing Assistance Payment (HAP) contracts.

UNDERWRITING

In connection with the Authority’s underwriting of these types of application and, if funded, the ongoing management of these projects, the Authority will:

1)      Limit developer fee to the lesser of the amount calculated using the base developer fee calculation in the QAP or the Authority’s discretionary cap (currently $2,000,000). If the new owner is affiliated with the general contractor and/or the property manager, the developer fee will be reduced by the following items: general contractor overhead and/or one year of property management fees.

2)      On a related party transaction, require a seller note sized to 75% of the difference between acquisition cost and the exiting mortgage debt on the property. The seller note would be structured as must-pay debt in a second lien position and carry the same (or lower) interest rate as the first mortgage. The combined first mortgage note and seller note must meet the lender’s (the Authority, HUD/FHA, banks, or others) loan to value (LTV) and debt service coverage (DCR) requirements.

3)      Require projects to conduct a PNA every five (5) years to ensure capital needs are met and reserves are sized appropriately (expense paid by the property). Reserves will be adjusted based on the findings of the PNA. Borrowers will be responsible for notifying the investor and any other stakeholders in the deal of the requirement to potentially re-size (increase) reserves in subsequent years.

Please note:

Absent extraordinary circumstances related to providing decent, safe and sanitary housing, the development will be ineligible for a subsequent resyndication of TEBs and LIHTC for twenty-five (25) years, from the date of closing. Projects should be structured so that the immediate rehabilitation, capitalized reserves, and ongoing deposits are sufficient to maintain the property. The Authority reserves the right to limit subordinate resource requests on future deals for sponsors who receive unrestricted proceeds/cash-out on properties financed with resources administered by the Authority.

North Carolina Posts 2020 QAP & Preliminary Application on Website

The North Carolina Housing Finance Agency has posted its final 2020 Qualified Allocation Plan on its website.  As a continued reminder: while the final QAP contains language for the Workforce Housing Loan Program, there remains no appropriation of funds for 2020.  The 2020 Housing Credit Preliminary Application is also now available.  The deadline for application submission is noon on January 24, 2020.

 

Kentucky Schedules Multifamily Developer Forum

Kentuck Housing Corporation (KHC) will be hosting a developer forum to solicit feedback on current scoring criteria and incentives for the development of the 2021-2022 Qualified Allocation Plan, Multifamily Guidelines, and scoring workbook.

Join KHC for a Multifamily Developer Forum on Monday, December 16, 2019, 1:30-3:30 p.m. ET, at the University of Louisville ShelbyHurst Campus, Burhans Hall Rooms 162/163, 440 N. Whittington Parkway, Louisville, Kentucky, 40222.

All multifamily developers, consultants, investors, or other interested parties are invited to attend this forum. If you would like to attend, please email multifamily@kyhousing.org by Monday, December 9, 2019. Please include the name of each attendee and the organization represented. RSVP is required for attendance to ensure adequate seating. An email of cancellation for registrants who are unable to attend is appreciated.

Minnesota Posts Application for LIHTC Round 2

Minnesota Housing is now accepting applications for Round 2 of the 2020 Housing Tax Credit (HTC) Program. There is approximately $529,618 in tax credits available; $103,540 in the Rural Development/Small Project set-aside (RD set-aside) and $426,078 in the unified pool. The RD set-aside is carried forward to Round 2, and if there are no eligible applications, the tax credits will be available to other projects. Intent to applies are due Friday, January 17, 2020 by 12:00 p.m. and applications are due Friday, January 31, 2020 by 12:00 p.m. View the 2020 HTC Round 2 Housing Tax Credit Application Instructions for more information and submission details.

Note: Round 2 deadlines above have been adjusted from the deadlines initially determined at the beginning of the 2019 RFP. The Multifamily Application Instructions have now been updated to reflect the current Round 2 deadlines.

Questions? Visit www.mnhousing.gov or contact Tamara Wilson at 651.296.4451.