Tennessee Tag Archives

THDA Multifamily Programs Updates

The Multifamily Programs office of the Tennessee Housing Development Agency (THDA) sent an email providing several updates on its activities. THDA has yet to publish its 2019 Multifamily Tax-Exempt Bond Authority (MTBA) and Competitive Low Income Housing Tax Credit applications but wrote that they are under development and should be available soon.  

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TN Housing Announces Additional Application Workshop

THDA will hold one additional application workshop for this funding opportunity. Date, location, and times shown below.

Interested organizations are strongly encouraged to attend the application workshop. If you are interested in attending, please RSVP no later than January 18, 2019 with the name of your organization and the number of attendees to blord@thda.org.

January 22, 2019
9:00 am – 12:00 pm CST
Parkway Towers Building, 14th Floor
Parthenon Room
404 James Robertson PKWY
Nashville, TN 37243

Further information, including the Notice of Funding Availability and application documents, may found on THDA’s web site at: https://thda.org/business-partners/nhtf

Applications for the 2018 National Housing Trust Fund Grant must be received by THDA on or before 4:00 PM CDT on Thursday, March 14, 2019

Tennessee Housing Update from Multifamily Programs-Clarification on 2019-2020 QAP-Section 12

Good afternoon Program Participants and Other Interested Parties,

Stewart Rutledge just made us aware of a typing error in a sentence found in Section 12:  New Construction Regional Pools of the 2019-2020 Qualified Allocation Plan.  Thank you Stewart.

The language in Section 12, Item C was accurate in the September 26, 2018 QAP version which was approved by THDA’s Board of Directors.  The QAP versions published on October 24 and November 2, contained the typing error.  When the 2019-2020 QAP was amended on November 13, this typing error was not noted.  Additionally, Multifamily Programs proposed no change to the language in Section 12, Item C for the Board’s consideration.  I take full responsibility for the typing error.

The language in Section 12, Item C should read  “C.  An Initial Application proposing new construction cannot be located in a QCT unless the Initial Application receives Housing Credits under CNI, the Innovation Round, or the PHA Set-Aside.”

I apologize for the inconvenience this typing error has caused.

Donna Duarte
Multifamily Programs Director

Tennessee Housing Publishes Updated Compliance Forms

Good afternoon Program Participants and other Interested Parties,

New and/or Updated Compliance Forms:

Multifamily Programs has made changes to our required compliance forms. These modified forms can be found at  https://thda.org/business-partners/housing-credit-compliance.

Household Income Certification (HIC HO-0420)

  • This is the former Tenant Income Certification (TIC)
  • A disclosure added to the Household Certification and Signatures section notifying residents of THDA’s obligation to submit household data to HUD annually.
  • Updated income restriction options in Part V determination of income eligibility and Part VI rent for the Average Income set-aside option beginning in 2019.
  • Update to instructions of Part II – Household Composition to align with HCMS and HUD reporting options.

Continuing Residency Certification (CRC HO-0489)

  • A disclosure added to the Household Certification and Signatures section notifying residents of THDA’s obligation to submit household data to HUD annually.
  • Updated income restriction options in Part V determination of income eligibility and Part VI rent for the Average Income set-aside option beginning in 2019.
  • Update to instructions of Part II – Household Composition to align with HCMS and HUD reporting options.

Exhibit B was expanded to Exhibits B-1 & B-2

Exhibit B-1: Transfer or Sale of Ownership Interest (HO-0419)

  • Exhibit B-1 is used for ownership changes
  • Exhibit B-1 has a version for multiple ownership entities
  • Ownership contact information has been expanded
  • Management company changes have been added
  • The THOMAS authorization request has been added

Exhibit B-2: Managing General Partner Change or Transfer of General Partner Interest ( HO-0419)

  • Exhibit B-2 is used to document and update managing/general partner changes
  • Exhibit B-2 was also expanded to include the managing partner contact information.
  • Management company changes have been added
  • The THOMAS authorization request has been added

Employment Verification Form and Process

THDA has been made aware that property management companies are not using the THDA Employment Verification form (HO-0422) as the primary method to determine employment and employment income when qualifying households. Ownership entities and property management companies are strongly encouraged to use this form as the primary method of verification. The THDA Employment Verification form has been modified and eliminates the collection of Year to Date Earnings. When properly used as a verification form, Year to Date Earnings should not be disclosed by the applicant’s employer. This allows ownership entities and property management companies to anticipate the applicant’s income over the next 12 months including disclosures of salary increases, bonuses, overtime wages, commissions, etc.

If the applicant’s employer will not complete the THDA Employment Verification form, ownership entities and property management companies should document the applicant’s file with a note explaining why the THDA Employment Verification form was not used. When ownership entities and property management companies use paystubs and third party work verification lines to confirm employment and wages; the situation changes. Information contained on paystubs and third party work verification forms cannot be ignored. If the Year to Date Earnings are disclosed, that information must be investigated should it indicate the earnings would be higher than the income limits. Also, ownership entities and property management companies should question applicants as to future salary increases, bonuses, overtime wages, commissions, etc.

Guidance on the THDA Employment Verification form can be found on the THDA website at https://thda.org/business-partners/housing-credit-compliance.

Customer Complaint Posters

THDA’s Program Compliance required the use and posting of Customer Complaint Posters at Low Income Housing Credit properties. The information was memorialized in Qualified Allocation Plans however, there was no enforcement ability in IRC Section 42. In late 2016, that practice was discontinued. In late 2018, THDA’s Call Center was also discontinued. Please remove the Customer Complaint Posters from your properties. Should a resident have a complaint, they should discuss the situation with the property management company and the ownership entity.

From the entire team at THDA, we wish all of you, and your families, a very Happy Thanksgiving!

Thank you,

Chuck O’Donnell
Compliance Manager – Multifamily Programs
Tennessee Housing Development Agency
502 Deaderick Street, Third Floor
Nashville, Tennessee 37243
(615) 815-2215
www.thda.org

 

Tennessee Housing Update from Multifamily Programs; Recaps Changes to Bond Program

Good morning Program Participants and other Interested Parties,

If you missed THDA’s Tax Credit Committee and Board Meeting on Tuesday, you missed productive and positive outcomes for THDA’s multifamily housing programs. You also missed some “fast footwork” on my part, but that is another story.

Amendments to the 2019-2020 Low Income Housing Credit Qualified Allocation Plan and the proposed 2019 Multifamily Tax-Exempt Bond Authority Program Description were approved by THDA’s Board of Directors on Tuesday. The 2019-2020 QAP is on its way to Governor Haslam for his signature.

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To recap, the changes to the 2019 MTBA Program Description after release of the TCC materials:

Section 2: Definitions:

Development Team – Includes any individual or member of the development team including Governors/Directors, Members and Managers/Officers of the Ownership Entity; Officers, Directors, and Stockholders of the Development Entity and Officers, Directors, and Stockholders of the Property Management Company.

 Section 3: Program Eligibility:

B.  Eligible Developments

4.b.All developments proposing single family units, duplexes, triplexes, and (REMOVING TOWNHOMES) must meet Visitability design requirements.

E.  Identity of Interests

If an application for MTBA and Noncompetitive Housing Credits involves acquisition of land or buildings, the requirements specified in Section 42(d)(2) of the Code shall apply.

To recap the changes to the 2019-2020 QAP after release of the TCC materials:

Section 2: Definitions

Development Team – Includes any individual or member of the development team including Governors/Directors, Members and Managers/Officers of the Ownership Entity; Officers, Directors, and Stockholders of the Development Entity and Officers, Directors, and Stockholders of the Property Management Company.

Section 13: Threshold and Minimum Construction and Rehabilitation Requirements

B. 3. All newly constructed single family units, duplexes, triplexes, and (REMOVING TOWNHOMES) must meet the following Visitability requirements.

C. Existing Multifamily Housing Minimum Rehabilitation Requirements Initial Applications that propose rehabilitation must present a scope of work that meets the following:

1. Compliance with all Threshold Requirements.

2. Minimum rehabilitation costs equal to the greater of the per door costs in the Physical Needs Assessment or $25,000.

3. The replacement of any component of the building or site with a Remaining Useful Life, as specified in the Fannie Mae Expected Useful Life Table, which is incorporated in this QAP by reference.

4. Corrective actions for all deficiencies noted in the Physical Needs Assessment.

5. Substantially the same scope of work in all units including painting of the entire unit (all rooms and ceilings), flooring consistent throughout development, and matching cabinetry within each unit.

6. If roofs are to be replaced, roofing materials must be anti-fungal with a minimum 25-year warranty.

7. Replace and install new water supply fixtures and valves.

8. Replace all window blinds and exterior window screens.

9. Replace all damaged and worn interior doors, jams, frames, and hardware.

10. Existing exterior wooden stair systems may not be repaired. Instead they must be replaced in their entirety with new steel or concrete stair systems.

11. Replace all exteriors that are 90% vinyl with an estimated useful life of 15 years or less, it must be replaced with brick/stone veneer, stucco or fiber cement and/or hardiplank.

D. For Multifamily Tax-Exempt Bond Authority and Noncompetitive Housing Credit Initial Applications proposing rehabilitation of Existing Multifamily Housing must present a scope of work that meets the following:

1. Compliance with all Threshold Requirements.

2. The replacement of any component of the building or site with a Remaining Useful Life of less than 15 years, as specified in the Fannie Mae Expected Useful Life Table, which is incorporated in this QAP by reference.

3. Substantially the same scope of work in all units including painting of the entire unit (all rooms and ceilings), flooring consistent throughout development, and matching cabinetry within each unit.

4. If roofs are to be replaced, roofing materials must be anti-fungal with a minimum 25-year warranty.

5. Existing exterior wooden stair systems may not be repaired. Instead they must be replaced in their entirety with new steel or concrete stair systems.

6. Replace all exteriors that are 90% vinyl with an estimated useful life of 15 years or less, it must be replaced with brick/stone veneer, stucco or fiber cement and/or hardiplank.

Section 20: Noncompetitive Housing Credits Allocated to Developments Financed with Tax-Exempt Bonds

C. Total Development Cost Limits

Total Development Cost limits will be applied to all proposed developments requesting Noncompetitive Housing Credits at the time of Initial Application. The cost of issuance and any deferred portion of the developer fee over 15% will be excluded from these costs.

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Updated THOMAS coding from the QAP and MTBA Program Description changes is being tested now however, we anticipate opening the 2019 Initial Application window by January 1, 2019.   Also, updates are being made to the THOMAS Documents page which will incorporate the QAP and Program Description changes too. We are working towards an early December release of updates to the THOMAS Documents page. As we finalize our updates to THOMAS and the THOMAS Documents page, we will send out a notification BLAST.

In addition, we presented amended language for Enterprise Green Communities Certification in the 2016, 2017, and 2018 QAPs as included in the release of the TCC materials. However, we asked the Board to allow staff the ability to grant extensions for the receipt of the Post-Build Certification or Post-Build Application submission receipt without imposing fees and/or Minor SAE penalties in situations where the development team is working with Enterprise Green but does not have the supporting documentation necessary for Final Application submission.  We want our developers to submit their final applications timely. We also want our developers to complete the Post-Build Certification process without harming them with fees and/or penalties. If you submit your Final Application without the Post-Build Application submission receipt, please let your Allocation Coordinator know the status of your application submission. That will ensure we are all on the same page. And if you are experiencing delays with Enterprise Green Communities, please let us know too. We are in regular contact with the Enterprise Green Communities team and may be able to help.

THDA received 9 fantastic Innovation Round Proposals for 2019. I read every proposal because I am not on an Evaluation team and honestly, I wish we could allocate all of them. The first round Evaluation will take place once we ship the QAP off to the Governor’s Office for his signature. We still anticipate meeting our December 3 notification deadline.

THDA maintains an open cycle for the submission of Final Applications. However, we have a cut-off date for the receipt of Final Applications which must be issued IRS Form 8609s by February 28, 2019.   Please check with your Allocation Coordinator clarify whether you must submit your Final Application by December 3rd.   Remember, THDA maintains an open cycle for the submission of Final Applications. We can receive your Final Application on December 4th and it will not be subject to penalties or fees if the development’s IRS Forms 8609s do not have to be submitted to the Internal Revenue Service by February 28, 2019 and the credit period for the development does not start in 2018, instructions were sent out on the process for deferring the credit period in a Placed In Service survey sent by your allocation coordinator earlier this month.

Multifamily Programs Compliance Team is finalizing our triannual onsite inspections for 2018. We have had a busy year.   As we move back into the office and release final reports, remember the 2018 Owners’ Annual Certification of Compliance and Tenant Reporting will be due on February 15, 2019. We anticipate several OAC training sessions in December and will release that information by the end of this month.

As we enter into the Thanksgiving season, I am truly grateful for your contributions for safe, sound, and affordable housing for low and moderate income Tennesseans.

Donna Duarte
Multifamily Programs Director

 

 

Tennessee Issues LIHTC Innovation Round RFP

Good morning Owners and Management Companies of Low Income Housing Credit Properties,

As the Initial Proposal Deadline for the Innovation Round is vastly approaching, the Multifamily Programs staff would like to offer a template for external applicants that will be submitting a 2019 Innovation Proposal. Please ensure that your proposal is in line with the 2019 -2020 QAP as approved by THDA Board of Directors Section 9-A regarding Innovation Round. As an assistance tool, the Multifamily Programs has developed a 5 Page template that applicants are encouraged, but not required  to use the 2018 Innovation Proposal template here. This template will also be posted to the THOMAS documents page shortly.

All proposals should be sent to innovation@thda.org by November 1, 2018 .

Felita (Givens) Hamilton, MPS
Multifamily Programs Division
Allocation Manager
502 Deaderick Street-3rd Floor
Nashville, TN 37243-0900
www.thda.org

TN Housing Approves Qualified Allocation Plan

THDA’s Board of Directors approved Tennessee’s 2019-2020 Low Income Housing Credit Qualified Allocation Plan (“2019-2020 QAP”) yesterday afternoon.  The 2019-2020 QAP includes the amended/updated Total Development Cost table as approved by the Tax Credit Committee.  Further changes as housekeeping items have been discussed with developers and owners and will be added in red-line format possibly as early as Friday but no later than next Thursday.  Previously identified housekeeping items discussed with developers include:

  1. Section 3. State Allocation Limits:  Housing Credit Limits for New Construction contains a table which provides per county caps for developments.  The corrected language should identify the per county cap numbers:
  • Urban-2 developments
  • Suburban-1 development
  • Rural-1 development”

Section 12.  New Construction Regional Pool identifies requirements of New Construction Allocations.  The corrected language should read as:

  • A New Construction Initial Application receiving Housing Credits from a Regional Pool is limited to a maximum of one Allocation per county.
  • A New Construction Allocation from the general pool is limited to the per development caps found in Section 3 of this QAP.
  • An Initial Application proposing new construction cannot be located in a QCT unless the Initial Application receives Housing Credits under CNI, the Innovation Round or the PHA Set-Aside.
  • An Initial Application proposing new construction located in a rural urbanicity may be eligible for a Basis Boost.”

Section 14. Initial Application Scoring:  Rehabilitation of Existing Multifamily Housing Only, Project Location and Needs contains the term three year average occupancy rate.  The corrected language should read as “three year average physical occupancy rate”.

  1. Section 14. Initial Application Scoring:  New Construction and Rehabilitation of Existing Multifamily Housing, Recapitalization Waiver contains a table which provides points for deferring the year of recapitalization.  The corrected language will identify the years for recapitalization as:

At least 17 years from Original Allocation                             1 point

At least 18 years from Original Allocation                               4 points

At least 19 years from Original Allocation                              7 points

At least 20 years from Original Allocation                              10 points

Section 14.  Initial Application Scoring:  New Construction and Rehabilitation of Existing Multifamily Housing, Development Characteristics and Populations Served contains a description and table for applicants selecting minimum set-aside federal elections of 20%-50% and 40%-60%.  The corrected language will clarify the income limits of the households being served as:

Applications proposing the minimum set-aside federal election of 40%-60% will serve a percentage of households with incomes no higher than fifty percent (50%) of the area median income with rents maintained at or below the 50% area median income maximums or applications proposing the minimum set-aside federal election of 20%-50% will serve a percentage of households with incomes no higher than forty percent (40%) of the area median income with rents maintained at or below the 40% of area median income maximums (Units occupied by households with Section 8 Housing Choice Vouchers count towards this requirement).  PHA applications and applications proposing the minimum set-aside federal election of 60% Income Averaging are ineligible for these points.

  • Section 14. Initial Application Scoring:  New Construction and Rehabilitation of Existing Multifamily Housing, Development Characteristics and Populations Served will add the following language under Project Location and Need.  The corrected language will identify units fixed by income limits for households being served under the minimum set-aside federal election of 60% Income Averaging as:
  • For applications proposing the minimum set-aside federal election of 60%  Income Averaging up to 10 points
  • A statement from permanent lenders and the equity provider (at Final Application) acknowledging 60% Income Averaging for the proposed unit sizes and percent income limits.  5 points
  • A market study (at Initial Application and updated at Final Application, if necessary) showing current adequate demand for all proposed combinations of unit sizes and percent income limits.  5 points”

These items will appear as red-lined changes along with any additional housekeeping changes which we identify or receive via email to TNAllocation@thda.org using the comments form found on THDA website.  Please provide us with your comments and improvements, including housekeeping clarifications by October 15, 2018.

TN Housing Issues Qualified Contract Process Update

THDA’s Board of Directors met yesterday and agreed to suspend new requests to participate in the Qualified Contract Process until early 2019.  Submitted Qualified Contract requests will progress under the current Qualified Contract Guide.

Multifamily Programs has removed the Qualified Contract Guide from our website and will begin drafting clarification language to the Guide.  We anticipate presenting the revised Qualified Contract Guide to the Tax Credit Committee of THDA’s Board of Directors in November and seek their approval to the revised Qualified Contract Guide at the January 2019 Board of Directors Meeting.  As we revise the Qualified Contract Guide, we will offer a comment period to owners and other interested parties.  More information will be made available via BLAST as we move forward.

Should you have any questions or concerns, please contact Nekishia Potter at  npotter@thda.org.

Thanks,

Donna Duarte
Director of Multifamily Programs
Tennessee Housing Development Agency
502 Deaderick Street, Third Floor
Nashville, Tennessee 37243
(615) 815-2210